The elec­tion year has dawned and Prime Min­is­ter Dr Kei­th Row­ley is re­sign­ing.

The coun­try will have a new prime min­is­ter short­ly with Stu­art Young, cur­rent Min­is­ter of En­er­gy and En­er­gy In­dus­tries as well as Min­is­ter in the Of­fice of the Prime Min­is­ter.

The is­sue of who will be the po­lit­i­cal leader of the rul­ing Peo­ple’s Na­tion­al Move­ment, go­ing in­to the gen­er­al elec­tion, re­mains to be de­cid­ed by the par­ty.

Fol­low­ing the par­ty’s gen­er­al coun­cil meet­ing last Sat­ur­day, all 21 PNM Mem­bers of Par­lia­ment signed a doc­u­ment pledg­ing sup­port for Young as prime min­is­ter when Row­ley steps down.

What will Young in­her­it should he be­come the coun­try’s next prime min­is­ter? What is the coun­try’s out­look for 2025 and be­yond?

Econ­o­mist Dr Vanus James told the Busi­ness Guardian that on the eco­nom­ic front, the re­cent out­cry of the busi­ness com­mu­ni­ty about for­eign ex­change short­age and low sales in the Christ­mas sea­son is a sig­nal that coun­try’s econ­o­my is in some­thing of a mess.

Fur­ther, he said, T&T’s of­fi­cial for­eign re­serves are un­der ex­treme pres­sure.

James not­ed that the econ­o­my is dan­ger­ous­ly close to be­ing un­able to af­ford the im­ports need­ed for in­vest­ment, con­sump­tion and gov­ern­ment ac­tiv­i­ty.

“Im­port prices are stub­born­ly high. Ex­port prices are high­ly volatile and promise lit­tle re­lief in 2025. En­er­gy ex­ports have been un­der con­stant down­ward pres­sure. For sev­er­al years now, the av­er­age prices of oil and gas have been drift­ing down­wards. On No­vem­ber 25, 2024, the price of oil was US$69 per bar­rel, be­low the cur­rent bud­get tar­get of US$78. To­day, its Feb­ru­ary 2025 fu­tures is at US$73.28, still well be­low tar­get,” he ex­plained.

Ear­li­er in Jan­u­ary, James said the US nat­ur­al gas fu­tures price for Feb­ru­ary is at US$3.65 above tar­get, but head­ing back down to US$3.14 by April.

The fu­ture is not bright, he cau­tioned adding that “Trump’s Amer­i­ca” is plan­ning to flood the mar­kets with both oil and gas, with the spe­cif­ic in­tent of sup­press­ing prices and that plan might well work.

James said T&T’s prob­lem is struc­tur­al.

“Over the decades, we have done pre­cious lit­tle to di­ver­si­fy our econ­o­my and ex­ports. Pre­cious lit­tle, be­cause the strat­e­gy of re­ly­ing on man­u­fac­tur­ing, es­pe­cial­ly of food and bev­er­ages, has de­liv­ered and like­ly will de­liv­er lit­tle fruit. The failed Point Lisas ex­per­i­ment with man­u­fac­tur­ing of iron and steel is still fresh in our col­lec­tive mem­o­ry,” James cit­ed.

Some of the mess, he added, ap­pears to be psy­cho­log­i­cal too.

“It seems that the PNM has drunk deeply from a con­coc­tion called ‘de­pen­dence on oil and gas plus au­thor­i­tar­i­an gov­ern­ment,’ so much so that some in the me­dia are now rais­ing con­cerns that Row­ley should re­think his tim­ing.

“With na­tion­al elec­tions im­mi­nent, Stu­art Young’s tenure is like­ly to be short – a lame duck with no hon­ey­moon. A new prime min­is­ter KPB (Kam­la Per­sad-Bisses­sar) and a new UNC gov­ern­ment af­ter the next elec­tions might not recog­nise Maduro’s gov­ern­ment and end up scut­tling the cross-bor­der and near-bor­der nat­ur­al gas deals with Venezuela. KPB has been sharply crit­i­cal of Maduro. The re­sult­ing en­er­gy un­cer­tain­ty would put the coun­try in­to even deep­er for­eign ex­change mess and eco­nom­ic stag­na­tion than are caused by en­er­gy price volatil­i­ty,” James said.

Not­ing that the con­di­tion of un­cer­tain for­eign ex­change sup­plies has been around since the days of sug­ar, James said T&T stum­bled from de­pen­dence on sug­ar to de­pen­dence on oil and gas, but the volatil­i­ty of for­eign ex­change sup­plies has con­tin­ued.

“Na­tion­al lead­er­ship, in­clud­ing Young, has stub­born­ly fix­at­ed on the myth of man­u­fac­tur­ing as the on­ly en­gine of di­ver­si­fi­ca­tion, pay­ing on­ly lip ser­vice to the prospects of the cap­i­tal ser­vices,” James said.

So, what dif­fer­ence can Young make to the coun­try’s eco­nom­ic for­tunes?

Ac­cord­ing to James, “al­most none.”

“Row­ley’s past and en­er­gy price volatil­i­ty are pro­logues. The in­tox­i­cat­ing elixir of de­pen­dence on oil and gas plus au­thor­i­tar­i­an gov­ern­ment is not rec­om­mend­ed for the na­tion­al pock­et­book or its for­eign ex­change sup­plies.

“So, rather than rue­ing Row­ley’s tim­ing or Young’s ad­vent, this is as good a time as any for the coun­try to think care­ful­ly about why mean­ing­ful con­sti­tu­tion re­form is need­ed to de­vel­op our ex­port ca­pac­i­ty and econ­o­my. In­deed, it is like­ly to be our biggest sin­gle di­ver­si­fi­ca­tion project,” James said.

Em­pha­sis­ing that the coun­try has long known that, for a brighter fu­ture, it must di­ver­si­fy its for­eign ex­change earn­ings, he said that to de­vel­op in the mod­ern world sys­tem, T&T must counter its his­tor­i­cal­ly high brain drain with rapid growth of the av­er­age lev­el of knowl­edge and skills used in all forms of eco­nom­ic ac­tiv­i­ty.

Much of the knowl­edge and skills de­vel­op­ment must be achieved through rapid learn­ing from work ex­pe­ri­ence while grow­ing cap­i­tal per work­er and sharply im­prov­ing in­sti­tu­tion­al qual­i­ty.

The cru­cial fea­ture of in­sti­tu­tion­al qual­i­ty is in­clu­sive­ness - the ca­pac­i­ty for each work­er to share in the knowl­edge cre­ation, shar­ing and ap­pli­ca­tion process, James said, sug­gest­ing that com­mu­ni­ties are ide­al to help with this ef­fort.

He de­scribed com­mu­ni­ties as small and close-knit so­cial­ly, typ­i­cal­ly high­ly di­verse rel­a­tive to size, and fos­ter­ing a high de­gree of trust and loy­al­ty while elim­i­nat­ing the kinds of fear-based par­tic­i­pa­tion cre­at­ed by au­thor­i­tar­i­an ex­ec­u­tive gov­ern­ment.

“With pro­fes­sion­al man­age­ment and joint de­ci­sion-mak­ing, they can fos­ter rapid col­lec­tive learn­ing along with en­tre­pre­neur­ship and in­no­va­tion. And, they can be read­i­ly trans­formed in­to safe, healthy, hap­py mag­nets for both lo­cal and for­eign en­tre­pre­neur­ship,” James ex­plained, cit­ing all of this is ev­i­dent from a care­ful study of the Cas­tara mod­el.

James ex­plained this mod­el evolved over a long pe­ri­od as part of the ef­forts by com­mu­ni­ties in To­ba­go to sur­vive af­ter the eco­nom­ic col­lapse of sug­ar in 1884, not­ing that vil­lagers across the econ­o­my seized op­por­tu­ni­ties as they came along.

He al­so stat­ed that Cas­tara is de­vel­op­ing in­to what can be brand­ed as a ‘safe and healthy com­mu­ni­ty’ mod­el in which the com­mu­ni­ty pro­vides a cosy and pro­tect­ed healthy space for its guests and in­te­grates tourism in­to the com­mu­ni­ty’s out­put val­ue chains.

More so, he em­pha­sised that it is in the com­mu­ni­ties that the beau­ty of small size comes in­to its own in pen­e­trat­ing the bound­aries of hu­man knowl­edge to sup­port in­no­va­tion, the in­tro­duc­tion of new prod­ucts and meth­ods, and cost-re­duc­tion – the keys to di­ver­si­fi­ca­tion.

“How­ev­er, over the past 62 years, dic­ta­to­r­i­al ex­ec­u­tive gov­ern­ment has locked away this rich un­tapped po­ten­tial for learn­ing and di­ver­si­fi­ca­tion. There is no bet­ter way than con­sti­tu­tion re­form to em­pow­er our peo­ple to un­der­take the eco­nom­ic de­vel­op­ment that will ul­ti­mate­ly de­liv­er abun­dant sup­plies of for­eign ex­change and cre­ate a brighter fu­ture,” James main­tained.