In the light of how economies really function, I do share the sentiment of the BMI risk report of our country. The review had little hope for us in the short to mid-term. At the time of this post, the oil price continues to fluctuate below the $50.00 USD a barrel mark the finance minister has set for Trinidad and Tobago.
Their views are:
- Low oil prices = less revenue for us
- Non-oil industries will make little sense investing in thus further reducing our capacity to produce overall
- The government will make minor cutbacks on how they spend revenue. This does not significantly decrease our debt (we, the people, still have to pay it off so expect either new taxes, tax increases or less in our social programs…”GATE” anyone?)
- As less foreign exchange enters our country the central bank will use capital controls to prevent a significant depreciation of our dollar, however, they will gradually allow it to happen (as they have done earlier this year)
This is what may happen to us if our oil price remains low for a long period:
If there were ever a time for the people of Trinidad & Tobago to change course, it would be now. We cannot depend always on the government to “take care of us.” Do you really want the revenues from oil and carnival to determine whether you and your family eat fine food or not? When and where you should go? How many things/services you can buy online? Financial education (sadly not taught in schools) will give us wisdom to protect us from inflation and financial manipulation that has been going even before your grandfather was a thought.
If you want a copy of the summary report you can download it here.