GEISHA KOWLESSAR ALONZO
Eight months into the term of a new administration and on the cusp of a new calendar year, T&T’s economic narrative is defined by three converging themes: limp growth, foreign exchange constraints and a wavering energy outlook.
From the perspectives of leading economists Dr Indera Sagewan, Dr Marlene Attzs, and Dr Vanus James, 2026 is not just another calendar turn—it is an inflection point that demands structural change, disciplined execution, and a reorientation toward export competitiveness and productivity.
All three economists framed the foreign exchange challenge as the central economic risk—and opportunity.
Sagewan argued that the forex gap could no longer be papered over with periodic interventions or allocations; it must be transformed into an export imperative.
The country’s yardstick should change: ministries and state agencies must be measured not by their expenditure, but by net foreign exchange generated through policies and programmes.
“The national focus must move toward deliberately growing non-energy sectors that earn foreign exchange directly: education, tourism, health and wellness tourism, culinary tourism, yachting, creative industries, agro-processing, business outsourcing, financial and professional services, and maritime and logistics operations. It is not how much money they spend, but how much foreign exchange their policies, programmes and sectors actually generate that must be the new measurement metrices for ministries and State agencies,” she explained.
Attzs concured, warning that managing shortages is a dead-end strategy in a stagnant economic structure.
Her prescription: strengthen industrial clusters, incentivise manufacturing and agro-processing, and accelerate investment into export-capable industries.
“We need a long-term solution to foreign-exchange scarcity based on structural transformation in the context of an industrial policy, not periodic interventions,” she said.
James sharpened the point by noting that import dependence is high, while exports plus net foreign direct investment (FDI) hover only marginally above the import bill, leaving the external accounts vulnerable.
“Import dependence was high and exports plus net FDI were hovering precariously at only 13 per cent above the import bill,” he said.
Without sustained current-account surpluses and higher import cover, diversification would be perpetually derailed.
Energy: A narrowing cushion and a budget risk
The energy-manufacturing complex—long the country’s anchor—is now fragile.
James notes oil prices hovering in depressed territory and warns that optimism around geopolitical improvements (including a possible end to the Russia-Ukraine war) could further pressure prices, undermining revenue assumptions, adding, “Oil markets are hovering near glut conditions and oil prices remain sustainedly depressed below US$60 per barrel.”
He added that gas prices are now above the targeted US$4.25 per mmbtu, but the shortage of gas to the industrial plants is growing, what with the collapse of Dragon and the possible war threat to exploitation of the two cross-border fields with Venezuela.
“That too does not look good for industrial viability or budget expectations and initiatives in 25/26. They also do not look good for general economic viability because the country lives on imports and the import cover is now quite low and trending downwards,” James said.
If conditions persist, James sees two unpalatable options: bailout or foreign borrowing at higher rates.
Efficiency and digitisation
In a low-growth environment, inefficiency is the most dangerous enemy.
Sagewan called for a sweeping digitisation of Government services, simplification of business processes and an embrace of automation and AI-assisted systems across both public and private sectors.
T&T, she warned, cannot operate with 20th-century systems in a 21st-century competitive landscape.
Attzs added that digital transformation must be real—not just “front doors” over manual back-end processing.
She advocates online payments, real-time tracking of applications, and end-to-end system reform that raises productivity and improves the ease of doing business. This creates investor confidence, unlocks innovation for start-ups, and transforms the public sector into an enabler rather than an obstacle – to economic growth and development.
Governance and Trust
For Attzs, institutional performance is not a compliance box—it’s a macroeconomic variable. When public institutions underperform, investments are delayed, transaction costs rise and citizens lose confidence.
She prioritises the strengthening of institutions, procurement transparency, consistent data publication and performance standards for State entities, noting that rebuilding trust lowers risk perceptions and enhances national cohesion.
James goes further, diagnosing a “policy disease” in which government control over key service industries (education, healthcare, finance, creative sectors) shapes their economic orientation and stifles export potential.
He argued that authoritarian decision-making—based on insufficient information—has blocked the development of professional services as major exports, emphasising that without institutional reforms to eliminate heavy-handedness and enable full information sharing, policy would remain misaligned with development needs.
The limits of an undereducated workforce
Structural reform cannot succeed without human capital.
James presented stark data.
“When Rowley left office, he also left an economy whose development process had stalled over a decade. In 2024, there were still 58 per cent of workers with inadequate education, and Tobago was 19 years behind at 68 per cent. Moreover, despite the special and favourable provisions of the THA Act, Tobago’s development challenges worsened sharply in the Farley years, from 62 per cent in 2021 to 68 per cent in 2024. That is, Tobago moved from a development condition that was better than the borough of Point Fortin, much of St Georges, and St Andrew/St David, to one that is the worst in the country in just three short years. This might also be evidence of an accelerating brain drain in the face of poor policies.
“Only 16 per cent of national workers had university degrees, 13 per cent in Tobago. By way of comparison, relevant estimates were 43.3 per cent with university degrees in Singapore in 2024, 44.5 per cent in the USA, and 49.7 per cent in the UK, all indicative of a high degree of capitalisation and related substantial capacity for rapid learning and innovation,” James explained.
Crime and security
Sagewan points to crime’s corrosive impact on tourism, investor sentiment and the migration of skilled professionals.
“Crime and insecurity continues to negatively impact growth and weaken foreign exchange earnings. They drive away tourists, scare off investors, increase the cost of doing business and accelerate the migration of skilled professionals. In 2026, crime fighting must move beyond traditional law enforcement,” she said.
She stressed that greater attention must be placed on dismantling illegal financial networks, seizing criminal assets, strengthening border controls, reforming the judicial system to reduce backlogs and creating immediate economic alternatives for at-risk youth in high-crime communities, stating “safety and stability are not luxuries; they are pre-conditions for growth.”
Attzs also framed safety as a public good essential for growth, advocating data-driven policing, strengthened intelligence coordination, violence-interruption programmes, and immediate economic alternatives for at-risk youth.
“We need a national security strategy based on, inter alia, data-driven policing, improved intelligence coordination, violence-interruption programmes, and youth and community interventions. The country cannot diversify, grow, or prosper without a marked reduction in violence and insecurity,” she recommended.
Forex strategy in disguise
T&T’s heavy food import bill compounds inflation and FX pressures.
This dependence, Attzs stated, exposes households to global price shocks and weakens the country’s external accounts, adding that at a time when inflationary pressure continues to stretch family budgets, food and nutrition security must be treated as a national priority.
She added that a focus on revitalising local agriculture with farmer-sensitive operations and incentives are essential steps, noting that improving domestic production is about more than agriculture - it is a macroeconomic stabilisation strategy that helps cushion consumers from price hikes while reducing the demand for scarce foreign exchange.
The most promising sectors for export-led resilience, according to James, are those intensive in university-level skills: education and healthcare services, finance and insurance, and creative, recreational, and cultural industries.
These professional services offer stable, high-value income streams and could be scaled with the right industrial policy.
Sagewan also championed youth entrepreneurship, digital skills, renewable energy, agro-technology, and maritime and logistics—building a new export base that reduces vulnerability to commodity cycles.
From “doer” to “enabler”
Sagewan envisions a government that is leaner and smarter—merging overlapping agencies, expanding public-private partnerships, and instituting performance-based management. The State’s role: design the environment for growth, not act as the primary engine of employment. Attzs stresses transparent, honest macroeconomic communication—on inflation, debt limits, and fiscal trade-offs—to build public support for reform.
Moreso, she said citizens may be more willing to support necessary reforms when they understand the constraints and the rationale behind policy decisions.
Attzs emphasised that 2026 presents T&T with a pivotal opportunity to reset its trajectory—moving away from reactive “firefighting” toward proactive future-building.
