By DAVID McFADDEN
The Associated Press
PORT-OF-SPAIN, Trinidad (AP) — During the good times, earnings from natural gas and oil exports made the tiny Caribbean nation of Trinidad and Tobago one of the richest countries in the Western Hemisphere. The collapse in world oil prices now has it facing the threat of a punishing and prolonged downturn.
After two decades of nearly uninterrupted prosperity, the government is being forced to scale back spending by 7 percent, siphon some $1.5 billion from a stabilization fund over the next couple of years and warn its 1.3 million people that they will have to make do with less.
“We must all appreciate that the circumstances we now face as a nation require sacrifice and managed adjustment in our living standards,” Prime Minister Keith Rowley warned in a recent speech.
Those standards include American-style shopping malls, cheap electricity, subsidized gasoline and so many families with multiple cars that highways weaving past abandoned cane fields are often clogged with traffic jams in both directions.
Things have been going so well for so many years that locals repeat the mantra “God is a Trini,” meaning the twin-island republic, known for high spirits and rollicking Carnival celebrations, is so blessed that things will always turn out well. But the specter of tough economic times is starting to prompt a glum self-examination.
“You can see it coming: Times will be getting hard. Previous governments have spent too lavishly and now it’s time we have to pay the piper,” said Adrian Lashley, a father of five who runs a small clothing shop in downtown Port-of-Spain, the capital.
Trinidad gets roughly 45 percent of its gross domestic product and 80 percent of export revenue from the energy industry. In June 2014, the price of Trinidad’s benchmark crude was $106 per barrel and the government had drawn its 2015 budget anticipating $80 a barrel, but the price has plummeted to near $30. Prices for liquid natural gas, Trinidad’s main export, have declined by some 45 percent.
The global price collapse has already inflicted serious economic damage in oil-producing nations such as Venezuela and Nigeria. With forecasts suggesting that world prices won’t recover anytime soon, economists say this downturn will have a serious bite here. Last month, the Central Bank of Trinidad and Tobago announced the country was officially in recession, with no economic growth in 2015.
Terrence Farrell still boasting about how much money we have even as Rowley gets ready to knock on the IMF's door. I love the part about blaming past governments. Is only ONE GOVENMENT to blame!!!
A bit of economy perspective :
1) The ultra-hardline regime in Saudi Arabia launched an austerity budget late last year to help combat a ballooning deficit. It is even considering listing shares in its ginormous state-owned oil company, Saudi Aramco, in a bid to raise funds.
2)Alaska is considering income taxes for the first time in 40 years.
3)Brazil is curtailing it carnival.
4) And on, and on for states that were oil based.
As more and more stories of profligacy, waste, and corruption emerge, it would seem that T&T dodged an IMF bullet when Rowley was elected. In some respects, it reminds me of Americans handing over the keys to Obama in 2008 and saying: You fix it. And fix it, Rowley will.
Allyuh , ah jest see a nice commercial on CNN with a reggae soundtrack inviting tourists to de Virgin Islands.
As someone who use to live in St. Croix , ah like dat.
But Trinis , allyuh economy in trouble , what allyuh waiting for ?
Some nice beaches!!!
For those willing to wait...