A TALE OF TWO ECONOMIES

THERE was a time, mere decades ago,\ when the economies of Trinidad and Tobago and Guyana were diametrically different from what currently exists.

In the 1970s, Guyana’s economy fell by more than a third, there was mass nationalisation of several enterprises, steep poverty and high unemployment, coupled with repression of the authoritarian Forbes Burnham regime.

Thousands of people fled the economic hardship and political tyranny.

There are now second and third-generation Guyanese expatriates in various cities in North America and the Caribbean, virtually all prospering even as they reflect on the land of their parents and grandparents.

In the mid-1970s, T&T’s economy was bolstered by an international spike in petroleum prices, with much of the extra earnings spent on non-essential projects or devoured in corruption.

Then-Jamaican Prime Minister Michael Manley famously chided that money was gushing through the country “like a dose of salts.”

T&T’s economy collapsed in the next decade, as a result of the absence of savings and precipitous decline in oil prices.

The country rode several waves of high energy prices, until today, with historically low production of oil and natural gas, the bottom has fallen of the economy.

In just over a year, the government has borrowed more than US $2 billion, to add to its previous heavy debt burden, and is scraping the tax barrel to balance an economy with annual huge deficits.

The cost of living is at an all-time high, wages are virtually frozen, and there is growing joblessness.

 In contrast, Guyana’s economy has grown by just under 50 per cent since the mass discovery of oil and gas, and is projected to develop by 100 per cent in the next four years.

The quality of life has markedly improved, and there are major investments in infrastructure, healthcare, education, housing and other prime sectors.

International agencies tell of the transformation of the long-suffering plantation economy into a modern energy-driven market.

T&T never diversified its economy away from sole dependence on the returns of the energy sector, a concept termed the Dutch Disease.

The country’s savings were depleted in quick time, and nationals are now enduring the social and economic fallout of a declining economy.

There are poignant lessons for Guyana.

“It is urgent to prevent the economy from gravitating toward the negative tendencies associated with the disease,” the Inter-American Development Bank (IDB) has cautioned.

The bank, like several other reputable agencies, has pointed to T&T’s unfortunate experience.

“Guyana can learn from (T&T’s) experience,” IDB said forthrightly.

Indeed, T&T’s affected background should be a benchmark, the experts acknowledge.

To be fair, the Guyanese authorities have promised to save for a rainy day.

They should continue to reflect on the harsh lessons of the T&T experience.