The end of WWII marked the be­gin­ning of the end of colo­nial­ism and the emer­gence of new in­de­pen­dent states. The Unit­ed Na­tions was formed in 1945 with 51 in­de­pen­dent states. Its main pur­pose is to act as a glob­al fo­rum for solv­ing in­ter­na­tion­al chal­lenges through a pletho­ra of agen­cies. Trinidad and To­ba­go was the 110th. To­day, there are 193 mem­ber states, with South Su­dan as the lat­est mem­ber state, join­ing in 2011.

Oth­er mul­ti­lat­er­al in­sti­tu­tions like the In­ter­na­tion­al Mon­e­tary Fund and the World Bank (ini­tial­ly the World Bank for Re­con­struc­tion and De­vel­op­ment) were formed to de­vel­op a frame­work for in­ter­na­tion­al eco­nom­ic co­op­er­a­tion and to aid in the re­con­struc­tion and de­vel­op­ment of post­war Eu­rope. But the chal­lenges fac­ing the new in­de­pen­dent coun­tries were dif­fer­ent from the task of re­build­ing a war-rav­aged Eu­rope.

Build­ing in­de­pen­dent na­tions from a colo­nial past im­plied eco­nom­ic as well as so­cio-po­lit­i­cal ob­sta­cles. The eco­nom­ic chal­lenges can be iden­ti­fied as five core ar­eas. The first is pover­ty and the sig­nif­i­cant in­come dis­par­i­ties be­tween dif­fer­ent groups in the so­ci­ety, which lead to in­equal­i­ty in ac­cess­ing op­por­tu­ni­ties for many.

Sec­ond is un­em­ploy­ment and un­der­em­ploy­ment, which con­tribute to pover­ty and eco­nom­ic in­sta­bil­i­ty. Pover­ty and un­em­ploy­ment flow from the third chal­lenge, struc­tur­al fac­tors such as over-de­pen­dence on a sin­gle pri­ma­ry pro­duc­ing sec­tor, such as agri­cul­ture or nat­ur­al re­source ex­trac­tion.

The fourth chal­lenge is the hu­man re­source is­sue, or a skills gap. This refers to the gap be­tween cur­rent work­force skills and those re­quired for a mod­ern econ­o­my based on in­no­va­tion and pro­duc­tiv­i­ty en­hance­ments. The fifth chal­lenge is ac­cess to fi­nan­cial re­sources, which can con­strain both the pri­vate and pub­lic sec­tors in un­der­tak­ing de­vel­op­men­tal projects. This of­ten leads to in­ad­e­quate phys­i­cal in­fra­struc­ture, such as roads, bridges, or dig­i­tal con­nec­tiv­i­ty, which can af­fect busi­ness op­er­a­tions, and lim­it mar­ket ac­cess.

Ad­dress­ing these chal­lenges re­quires a mix of poli­cies to be im­ple­ment­ed by the State and pre­sup­pos­es the ex­is­tence of strong gov­ern­men­tal in­sti­tu­tions. The new­ly in­de­pen­dent coun­tries had to ad­dress so­ciopo­lit­i­cal chal­lenges as well. These new states of­ten had large sec­tar­i­an pop­u­la­tions di­vid­ed by eth­nic­i­ty, re­li­gion, and oth­er fac­tors, which led to in­equal­i­ty, weak gov­er­nance, cor­rup­tion, and po­lit­i­cal in­sta­bil­i­ty. Po­lit­i­cal in­sta­bil­i­ty af­fects many of the emerg­ing states, dis­rupt­ing economies, dis­plac­ing pop­u­la­tions, and cre­at­ing hu­man­i­tar­i­an crises.

In­dia, for ex­am­ple, broke up in­to In­dia and Pak­istan on in­de­pen­dence in 1947 and has been in bit­ter dis­pute over Kash­mir, which per­sists to this day. In 1971, fol­low­ing a pe­ri­od of po­lit­i­cal and so­cial un­rest and a war be­tween In­dia and Pak­istan, East Pak­istan se­ced­ed to be­come the in­de­pen­dent na­tion of Bangladesh. Many coun­tries in Africa had sim­i­lar ex­pe­ri­ences and out­comes, which have slowed the pace of de­vel­op­ment. South Su­dan is a con­tin­u­ing ex­am­ple of these dif­fi­cul­ties.

The adop­tion of im­port sub­sti­tu­tion strate­gies was the first pol­i­cy mea­sure used by many new na­tions to achieve eco­nom­ic de­vel­op­ment. Many mis­takes were made along the im­port sub­sti­tu­tion path­way. Econ­o­mists did not ful­ly un­der­stand trade pro­tec­tion mech­a­nisms, which were of­ten poor­ly de­signed, had a weak un­der­stand­ing of plan­ning tech­niques, or used in­com­plete da­ta.

Im­por­tant­ly, many had a weak un­der­stand­ing of the im­pact of over­val­ued ex­change rates, which com­ple­ment­ed the im­port sub­sti­tu­tion mech­a­nism. It al­so be­came in­creas­ing­ly clear that one set of poli­cies could not be used for all states, nor would do­ing so achieve the de­sired re­sult. A key learn­ing was that hu­man learn­ing process­es and the ca­pac­i­ty to ac­cu­mu­late knowl­edge re­quired much more than al­ter­ing the struc­ture of an econ­o­my.

The shift of de­vel­op­ment think­ing to­wards an ex­port-ori­en­tat­ed ap­proach was in­flu­enced by the suc­cess of the Asian tigers and the growth of Chi­na and In­dia and their ex­port-ori­en­tat­ed poli­cies. This led to the de­vel­op­ment of what has be­come known as the “Wash­ing­ton Con­sen­sus” or ex­port-led growth. Trade rather than aid was seen as the key in­gre­di­ent for as­sist­ing de­vel­op­ing coun­tries to es­cape the dy­nam­ic of per­sis­tent pover­ty and un­der­de­vel­op­ment.

Trinidad and To­ba­go, like many oth­er coun­tries, ac­cept­ed the prin­ci­ple of ex­port-led growth and has been on this path­way since the 80s. Con­se­quent­ly, T&T joined the WTO on its for­ma­tion in 1995, re­duced tar­iffs, and adopt­ed a pos­i­tive stance to for­eign di­rect in­vest­ment, and un­til 2016, adopt­ed a “lib­er­alised” for­eign ex­change sys­tem (1993). Yet de­vel­op­ment chal­lenges re­main re­al, and Trump’s em­pha­sis on tar­iffs amounts to the de­struc­tion of the glob­al trade sys­tem.

Glob­al growth is ex­pect­ed to slow to 2.3 per cent in 2025, be­low the thresh­old of­ten as­so­ci­at­ed with a glob­al re­ces­sion­ary phase, with stalling progress on pover­ty re­duc­tion and Sus­tain­able De­vel­op­ment Goals. Trade pol­i­cy un­cer­tain­ty has reached his­toric highs, dis­rupt­ing busi­ness con­fi­dence and sup­ply chains. New tar­iffs and geoe­co­nom­ic frag­men­ta­tion threat­en to re­verse gains in glob­al trade. Am­mo­nia, methanol, and urea are now sub­ject to US tar­iffs, whilst melamine has been ef­fec­tive­ly banned from the US mar­ket.

What is the new trade pol­i­cy to ad­dress these new chal­lenges and de­liv­er trade growth of USD 5 bil­lion by 2030?

Mar­i­ano Browne is the Chief Ex­ec­u­tive Of­fi­cer of the UWI Arthur Lok Jack Glob­al School of Busi­ness.