In 1930, Trinidad and Tobago produced more than 40% of the British empire’s oil. By the 1970s, the newly independent republic was producing 278,000 barrels of crude oil a day. For a country of just 1 million people, after the collapse of its sugar and cocoa industries, oil proved to be transformative.
Today, with a population of 1.5 million and oil production down to less than 54,000 barrels a day, Trinidad and Tobago is at a crossroads.
“We have fallen victim to ‘Dutch disease’ – a dependence on one single sector – which has defined who we are from an economic and social perspective,” says Indera Sagewan, an economist and director of the Caribbean Centre for Competitiveness.
“Non-energy economic diversification is imperative as the way forward for Trinidad and Tobago. We are living a defining moment.”
Unlike other oil-dependent states, such as Norway, the UAE and Qatar, Trinidad and Tobago has failed to maximise the benefits of the Heritage and Stabilisation Fund, which was established in 2007 to invest surplus revenues as a means of consolidating the legacy of oil wealth.
Now, the country faces the prospect of chronic low growth, according to an OECD report published in December. Last year, GDP grew by an estimated 1.7%, up from 1.4% in 2023. The government also faces rising unemployment rates and fiscal pressures, with public debt reaching 64.5% of GDP in 2024 – higher than the average of 51.9% in Central America and the Caribbean, according to the OECD.
To escape the low-growth trap, experts such as Sagewan have long argued that Trinidad and Tobago should diversify its economy, a challenge for a commodity-exporting country reliant on oil and gas.