The last three articles, “No easy way to fix strategic errors”, “Finding the right Policy mix” and “Transforming a society” provided a brief comparison between Singapore’s development experience and that of Trinidad and Tobago. In response, a former government minister argued that the comparisons provided valuable insight into Singapore but did not directly address T&T’s failings. In rephrasing his comment, he asked, “Does Trinidad and Tobago have an economic policy? And if yes, what is it?”
The short answer is that since 1974, every T&T government has relied on the energy sector to drive economic growth and has redistributed the energy rents derived to the rest of the economy. This policy explains why the economy has oscillated between boom and bust. The diversification effort has never been given the consistent emphasis it deserved. The promotion of manufacturing was not based on a coherent policy mix that enabled positive reinforcement. The result has been individual successes that are too weak to dethrone the energy sector as the economy’s dynamo. Further, even though we boast of the skill sets developed in the energy sector, we have not applied those learnings to other industries.
The lessons learnt in developing the petrochemical industry, the key role played by nationals in developing this sector, or the mistakes made, are largely undocumented. Abundant natural gas does not adequately explain why Trinidad and Tobago became the world’s second-largest exporter of ammonia. That story is entwined with foreign direct investment and a cadre of homegrown engineers who cut their teeth in solving the process issues at WR Grace, who went on to develop the backbone of the petrochemical sector. Political short-sightedness led to the loss of what should have been a flagship of T&T’s industrial capacity: CLICO Energy, now part of the Proman Group.
The key takeaway is that all the economic tools and policies used by Singapore were also used in Trinidad and Tobago, but with different results. Directed fiscal incentives, duty-free importation of manufacturing inputs, taxation policies, state enterprises, a focus on education and the training of nationals to operate at world-class levels, foreign direct investment, and anti-corruption legislation were employed as driving forces for national development. Long-term and medium-term planning were used as tools, setting broad goals rather than specific outputs.
To implement these plans, Singapore developed institutions such as the Economic Development Board (T&T’s equivalent of the Industrial Development Corporation) to attract targeted sectors for foreign direct investment through one-stop investment facilitation. It focused on developing an open economy that was aligned with international markets. This forced firms to actively embrace exports as a means of growth, anchoring growth and productivity to international standards. Foreign investors were treated as investment partners to ensure that returns were aligned across all production factors.
Why did Trinidad and Tobago, using the same tools, get such different results? Conditions are never identical, and there will always be differences in the political economy; generalisations are often too broad to capture the specifics. There are discernible differences in strategy and approach. First, economic development in Trinidad and Tobago has been approached from a macroeconomic management perspective rather than a national development perspective. The consequence is that alignment and policy coordination in T&T, and perhaps in the wider Caribbean, as well, are much weaker than they need to be. Second, Singapore has had the same political party in power since independence, and it has successfully adapted its policies as circumstances changed, allowing for a consistent approach. Third, its policy framework has never been compromised by any external intervention. Fourth, it successfully changed societal behaviours to a policy-reinforcing dynamic. Fifth, organisational discipline was a key feature of government and state enterprises, ensuring policy connectivity and alignment, thereby creating an enabling environment for achieving development goals.
Meritocracy remains a key foundational principle in Singapore, ensuring that the best performers are rewarded in both the public and private sectors, leading to a mutually reinforcing dynamic: efficient public and private sectors. Its approach to the labour market bargaining process is instructive. Singapore embeds labour into its development process, linking rewards to productivity improvements. In contrast, Trinidad and Tobago’s labour negotiations are centred on rent distribution without productivity coordination. The current GORTT bargaining position is emblematic of this failure, “negotiating” 12 years in arrears. What about the 2025-27 bargaining period?
Similarly, the Singapore education system is based on performance, relative to the type of individual it is geared to develop. Skills and technical training are emphasised and measured across different social groups, whether by socioeconomic grouping or race, to ensure continuous improvement. The emphasis is on skills, not credentials. What are the performance improvements at SEA, CSEC or CAPE relative to last year or the previous five years? What changes are in progress and the resulting impact? Which education minister has taken responsibility for measuring the failures and ensuring improvement?
Dependence on energy rents reduces the sense of urgency to drive change. The key factor in every budget is the impact of the next drilling campaign, whether by BPTT, Exxon or whoever. This focus on rent redistribution undermines any coordinated approach to national development. No institution focuses on this perspective, resulting in no permanent link between wages and productivity, and a weak link between labour policy and diversification. Hence, the dynamic for market-driven change is lost. The years 1970 and 1990 reinforced the trend to rent redistribution.
(To be continued.)
Mariano Browne is the Chief Executive Officer of the UWI Arthur Lok Jack Global School of Business.
