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Trinidad and Tobago

Economy

Point Lisas, yachting community, island of Tobago, world oil prices, cacao beans

Trinidad and Tobago’s gross domestic product (GDP) in 2006 was $18.1 billion, providing the country with a per capita income of $7,380. This relatively high per capita income reflects the fact that the country is a petroleum producer. The petroleum industry provides about one quarter of the GDP, one third of government revenue, and nearly two-thirds of foreign exchange earnings. The industry, however, employs relatively few workers. To combat unemployment, the government has encouraged the development of a variety of industrial enterprises. Most of the country’s industry is concentrated on the island of Trinidad. The island of Tobago, apart from the development of tourist facilities, remains dominantly agricultural.

Although Trinidad and Tobago’s petroleum-based economy provides its citizens with a per capita income well above the Latin American average, living standards fell significantly after the petroleum boom years of 1973 to 1982. Widespread unemployment, large foreign debt payments, and fluctuations in world oil prices all served to destabilize the economy of Trinidad and Tobago in the late 1980s and early 1990s. In 1994 the republic had its first year of sustained economic growth since the early 1980s. An economic recovery followed. Unemployment fell from a high of 22 percent in the late 1980s and early 1990s to about 10 percent at the end of 2003.

In 2004 the crude petroleum production of Trinidad and Tobago totaled 49.3 million barrels. Two petroleum refineries are located at Point-a-Pierre and Point Fortin on the island of Trinidad. In the early 2000s proven reserves were expected to last only another ten years, and the government was encouraging further exploration and diversification, notably into the development of natural gas, of which there are huge reserves.

Agriculture

Agriculture accounts for less than 2 percent of GDP and employs about 7 percent of the labor force. However, the soil is rich and farmers grow a wide variety of crops, both for domestic consumption and for export. The most important commercial crop is sugarcane. Other crops grown on Trinidad include rice, cacao, coconuts, citrus and tropical fruits, flowers, and vegetables. Livestock are also raised. The chief products of Tobago are cacao, copra, coconuts, livestock, poultry, and limes. In 2003 the state-owned sugar company closed, eliminating an estimated 8,000 jobs on Trinidad. The company later reopened a single sugar plant with a much-reduced workforce.

Manufacturing

Industry, excluding mining and quarrying, accounts for about 42 percent of GDP and about 28 percent of employment. This sector expanded in the early 1990s mainly because of the development of joint-venture projects with foreign firms based on the utilization of oil and natural gas either as energy sources or raw materials. These ventures, sited at an industrial estate set up at Point Lisas, produced petrochemicals; steel; ammonia, urea, and other nitrogen-based fertilizers; and the synthetic fuel methanol. By 2000 Trinidad and Tobago had become the world’s leading producer of methanol. Other manufactured goods include cement, clothing, processed food, tobacco products, beer and rum, and sugar. Plants on Trinidad also assemble motor vehicles and durable consumer goods such as refrigerators.

Tourism

Service industries, including the government, financial, and tourism sectors of the economy, are by far the most important in terms of employment, accounting for 64 percent of jobs. Since the 1980s the government has placed increasing emphasis on tourism, including constructing a terminal for cruise ships in Port-of-Spain. The government also promotes the islands heavily abroad, particularly Tobago, where it hopes to spur hotel construction to take advantage of the sheltered beaches and pristine underwater environment. Tourism in Trinidad, traditionally based on birdwatching and nature tourism, has been boosted by the construction of marinas and boat-repair yards in the Chaguaramas area, which have attracted the yachting community.

Currency and Trade

Crude and refined petroleum constitute 67 percent of Trinidad and Tobago’s yearly exports. Other exports are natural gas, chemicals, iron and steel, sugar, cacao beans, and rum. In 2003 exports were valued at $5.2 billion and imports at $3.9 billion.

The unit of currency is the Trinidad and Tobago (T.T.) dollar, consisting of 100 cents (6.30 T.T. dollars equal U.S.$1; 2006 average). The T.T. dollar was pegged to the U.S. dollar at T.T.$4.25 equaled U.S.$1 until 1993, when it was floated. It has since fallen in value.



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