Prime Minister Keith Rowley yesterday revealed that between 2014 and this year, TT suffered a massive 90% drop in oil revenue plummeting from a high of 19.4 billion in 2014 to a meagre $2.1 billion this year.
Rowley gave a sobering overview of the state of TT’s economy, less than a week before the Budget, at the “Spotlight on Trinidad and Tobago’s Financial Circumstance: The Road Ahead” forum at the Hyatt Regency in Port of Spain.
Despite the massive revenue shortfall, which has placed the nation in an economically precarious position, Rowley said the country will not return to the days of foreign exchange controls but will also not maintain exchange rate at levels which will further encourage imports.
The PM said his government will not use the limited forex reserves to support the exchange rate. “This would be paving our way into the arms of the IMF (International Monetary Fund) and that is something this government is not prepared to do.”
Rowley said the first priority for foreign exchange will be given to firms or industries which generate reasonable amounts of foreign exchange. He said, “If the demand for foreign exchange is not curtailed we will eventually be forced to live with the rate determined by the market. This is where holding strain and varying our taste come in.”
He said the government’s strategy for restoring growth is to get the private sector to invest in selected sectors or industries: export manufacturing; tourism; housing; maritime services; agriculture; financial services and creative industries. “Over the coming three years the government intends to pick a number of sectors to lead the revival and will work with the private sector to ramp up activity in these areas.”
He said the aim will be to generate foreign exchange and increase output. “The fiscal regime will be configured to support the development of new businesses and getting existing businesses to adopt new modes and new lines of activity. The expectation is that the phenomenal investment we have made in education and human capital over the years will get opportunities to bear fruit for the country.”
He said the government expects to achieve growth of six percent for each of these sectors over the three year period and will set up an implementation team to ensure that this growth target is met.
According to Rowley, government is also looking toward “infrastructure investments” and “the expected revival in the energy sector” for contributions to growth although he said “the truth is the government is not depending on these activities since the aim is to energize the diversification of the economy.”