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Caribbean Islands
Index
In the 1980s, Trinidad and Tobago was an upper-middle-income,
oil-exporting country that was highly dependent on the world price
of oil for its economic growth. The nation displayed the largest
gross domestic product (GDP--see Glossary) of the Commonwealth
Caribbean, one of the highest per capita GDPs among the nations of
the Western Hemisphere, and one of the highest standards of living
in the developing world. The country's GDP in 1985 stood at roughly
US$7.7 billion at current prices, or about US$6,000 per capita.
The major sectors of the economy were petroleum and
petrochemicals, construction, services, and agriculture. Petroleum
had fueled the economy since the early twentieth century and in
1985 still represented roughly 24 percent of GDP and 80 percent of
exports. Oil reserves at the current rate of extraction were
expected to last approximately ten years, but the islands enjoyed
large reserves of natural gas. New petrochemical plants, utilizing
the country's natural gas resources, came on-stream in the early
1980s and included ammonia, urea, and methanol. These large
industrial projects were located at the newly built Point Lisas
industrial park, which, along with the park's new iron and steel
plant, provided Trinidad and Tobago with an industrial base that
was unmatched throughout the Caribbean. Construction, the major
employer in the economy and often considered the bellwether of
general economic activity, expanded rapidly during the oil boom of
the 1970s but contracted greatly in the 1980s. Services, such as
financial services and utilities, also had expanded rapidly since
the 1970s and played a major role in the economy; by contrast,
tourism was rather undeveloped when compared with other Caribbean
islands. The agricultural sector was suffering from a long-run
decline, but growth in domestic agriculture in the 1980s helped to
revive that shrinking sector, albeit only partially.
In the postwar era, the economy experienced two great boom
decades, both of which were followed by decades of slow or negative
growth. Real GDP growth averaged 8 percent in the 1950s as the
economy diversified into manufacturing and construction through the
use of import substitution industrialization (see Glossary)
strategies. Growth in import substitution manufacturing and the
economy as a whole waned in the late 1960s, exacerbating the social
unrest at the end of the decade. The quadrupling of oil prices in
1973 revived the economy and created a 9.6-percent real annual
growth rate from 1974 to 1979. Trinidadians and Tobagonians,
nicknamed the "Arabs of the Caribbean," were known throughout the
region in the 1970s for the carnival of consumption that they
participated in with their instant oil wealth. The downturn in oil
prices in 1982, however, plummeted the economy into a deep
depression in 1983 from which the country had not emerged by 1987.
Negative growth peaked in 1984, when the economy contracted by
nearly 11 percent.
Even with cyclical growth, the citizens benefited from a
quality of life that surpassed that of not only most other
Caribbean islands but of other Western Hemisphere oil exporters
such as Mexico and Venezuela as well. The country also enjoyed a
literacy rate higher than Italy's, a per capita energy consumption
rate that exceeded Britain's, a per capita newspaper circulation
above that in several Western European countries, an income
distribution comparable to that of the United States, and an access
to electricity and potable water that was better than most
developing countries. Nevertheless, the country also suffered
problems associated with more developed societies, including
pollution, obsessive consumption, entrenched labor disputes, and
growing drug abuse. As in other Caribbean countries, chronic
unemployment, which had climbed to 17 percent by 1987, was the
major social problem. In addition, East Indians and women lacked
the same economic opportunities as white or black males; these
disparities were narrowing, however.
Unlike other Caribbean nations, Trinidad and Tobago benefited
immensely from the energy crisis of the 1970s. The oil boom of the
1970s flooded the national treasury, cut the unemployment rate in
half, created large balance of payments surpluses, and stimulated
the economy at large. Nonetheless, it also devastated the
agriculture sector, which declined 25 percent because of the
resulting shortages of laborers, who migrated to west coast cities
for higher wages. Although the boom was reversed in the early
1980s, Trinidad and Tobago's accumulated wealth permitted it to
weather the impact of the international recession better than most
developing countries and avoid the debt crisis that confronted its
neighbors. Although some charges of government waste and corruption
were voiced during the 1970s and 1980s, sufficient discipline in
public finance prevailed to allow the country to elude the fiscal
crisis that confronted other oil-exporting, developing nations such
as Mexico, Venezuela, and Nigeria.
In the late 1980s, Trinidad and Tobago displayed a mixed
economy that allowed for a level of government involvement second
only to that in Cuba among the countries of the Western Hemisphere.
The large role in the economy of subsidies, transfers, and joint
ventures between the government and the private sector created an
intertwining of the public and private sectors that often blurred
distinctions between them. During the 1970s, the government
purchased a share in over fifty major companies in banking,
insurance, agriculture, utilities, and manufacturing. As a
consequence, the government also became the largest single employer
in the country. Although Trinidad and Tobago was a country where
capitalism generally flourished, free enterprise, especially the
foreign sector, was highly regulated by the government.
Trinidad and Tobago was a very open economy, dependent on the
export of oil to purchase large amounts of imported food, consumer
goods, and capital goods. Oil represented approximately 80 percent
of exports, whereas food accounted for as much as 20 percent of
imports in the late 1980s. Trinidad and Tobago was the most
important exporter of oil to the United States from the Caribbean
Basin. The country supplied nearly 50 percent of that region's oil
exports to the United States, as well as 18 percent of the region's
total exports to that same market. Unlike virtually every other
Caribbean country, Trinidad and Tobago generally enjoyed yearly
trade and balance of payments surpluses. The country depended on
the United States for roughly 50 percent of its trade, but the
islands also maintained important trade relations with the European
Economic Community (EEC) and the Caribbean Community and Common
Market (Caricom--see Appendix C). Once a donor nation that aided
its poorer Caribbean neighbors, Trinidad and Tobago in the late
1980s was increasingly in need of external financing to weather its
economic adjustment period.
Data as of November 1987
- Caribbean Islands-Historical Background
- Caribbean Islands-Prosperity and Government Centralization, 1974-81
- Caribbean Islands-Economy
- Caribbean Islands-Agriculture
- Caribbean Islands-Government and Politics
- Caribbean Islands-Tourism
- Caribbean Islands-Political Dynamics
- Caribbean Islands-COUNTRY PROFILE: Turks and Caicos Islands
- Caribbean Islands-Chapter 7 - Strategic and Regional Security Perspectives
- Caribbean Islands-Role of Government
- Caribbean Islands-Labor Force and Industrial Relations
- Caribbean Islands-Role of Government
- Caribbean Islands-Growth and Structure of the Economy
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Economy
- Caribbean Islands-Political Dynamics
- Caribbean Islands-A Regional Security System
- Caribbean Islands-Tourism
- Caribbean Islands-Other Third World Relations
- Caribbean Islands-SOCIAL AND CULTURAL CHARACTERISTICS
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Balance of Payments and Debt
- Caribbean Islands-HEALTH AND WELFARE
- Caribbean Islands-ACKNOWLEDGMENTS
- Caribbean Islands-Role of Government
- Caribbean Islands-FOREIGN RELATIONS
- Caribbean Islands-Education
- Caribbean Islands-Manufacturing
- Caribbean Islands-Relations with the Commonwealth and Others
- Caribbean Islands-Foreign Relations
- Caribbean Islands-COUNTRY PROFILE: St - Christopher and Nevis ST - CHRISTOPHER AND NEVIS
- Caribbean Islands-The Penal System
- Caribbean Islands-The Soviet Presence
- Caribbean Islands-Colonial Heritage HISTORICAL SETTING
- Caribbean Islands-National Security
- Caribbean Islands-COUNTRY PROFILE: Antigua and Barbuda ANTIGUA AND BARBUDA
- Caribbean Islands-The Public Security Forces
- Caribbean Islands-Political Systems
- Caribbean Islands-EDUCATION
- Caribbean Islands-Relations with Latin American and Caribbean Countries
- Caribbean Islands-Changes in the Social Base of Political Power POLITICAL INDEPENDENCE
- Caribbean Islands-POPULATION
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Relations with the United States
- Caribbean Islands-Livestock, Fishing, and Forestry
- Caribbean Islands-National Security
- Caribbean Islands-Population
- Caribbean Islands-Education
- Caribbean Islands-ECONOMY
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Geography
- Caribbean Islands-Population
- Caribbean Islands-NATIONAL SECURITY
- Caribbean Islands-Agricultural Sector
- Caribbean Islands-The Barbados Defence Force
- Caribbean Islands-Government and Politics
- Caribbean Islands-Geography
- Caribbean Islands-Economy
- Caribbean Islands-The Police
- Caribbean Islands-The Robinson Government
- Caribbean Islands-United States Preeminence
- Caribbean Islands-External Sector
- Caribbean Islands-Energy
- Caribbean Islands-Education
- Caribbean Islands-POLITICAL TRADITIONS
- Caribbean Islands-THE STRATEGIC SETTING
- Caribbean Islands-Education
- Caribbean Islands-Role of Government
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-Geography
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-Government and Politics
- Caribbean Islands-Livestock, Fishing, and Forestry
- Caribbean Islands-Industrial Sector
- Caribbean Islands-Relations with the Commonwealth and Others
- Caribbean Islands-THE COLONIAL PERIOD
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Relations with Communist Countries
- Caribbean Islands-Role of Government
- Caribbean Islands-GEOGRAPHIC SETTING
- Caribbean Islands-Government and Politics
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-National Security
- Caribbean Islands-Natural Gas
- Caribbean Islands-Geography
- Caribbean Islands-Incidence of Crime
- Caribbean Islands-Economy
- Caribbean Islands-COUNTRY PROFILE: Barbados BARBADOS
- Caribbean Islands-The Road to Independence
- Caribbean Islands-PREFACE
- Caribbean Islands -CHAPTER 3 - TRINIDAD AND TOBAGO
- Caribbean Islands-Services
- Caribbean Islands-National Security
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-World War II
- Caribbean Islands-External Sector
- Caribbean Islands-EDUCATION
- Caribbean Islands-Foreword
- Caribbean Islands-Health and Welfare
- Caribbean Islands-The Postwar Strategic Vacuum
- Caribbean Islands-Education
- Caribbean Islands-Regional Security Threats, 1970-81
- Caribbean Islands-Controversial Security Issues
- Caribbean Islands-HEALTH AND WELFARE
- Caribbean Islands-Foreign Assistance
- Caribbean Islands-Chapter 4 - The Windward Islands and Barbados
- Caribbean Islands-ECONOMY
- Caribbean Islands-Population
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Banking, Financial Services, and Currency
- Caribbean Islands-HISTORICAL SETTING
- Caribbean Islands-Education SOCIAL AND ECONOMIC DEVELOPMENTS, 1800-1960
- Caribbean Islands-The Post-Williams Era, 1981-86
- Caribbean Islands-The Armed Forces
- Caribbean Islands-Chapter 6 - The Northern Islands
- Caribbean Islands-Relations with the United States
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-Population
- Caribbean Islands-Finance and Banking
- Caribbean Islands-COUNTRY PROFILE: CAYMAN ISLANDS BRITISH DEPENDENCIES: THE CAYMAN ISLANDS AND THE TURKS AND CAICOS ISLANDS
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Services
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Education
- Caribbean Islands-Land Tenure and Use
- Caribbean Islands-COUNTRY PROFILE: MONTSERRAT
- Caribbean Islands-Growth and Structure of the Economy
- Caribbean Islands-Population
- Caribbean Islands-Transportation, Communications, and Electricity
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Government and Politics
- Caribbean Islands-Petroleum and Asphalt
- Caribbean Islands-Economy
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-The Pre-European Population HISTORICAL AND CULTURAL SETTING
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-National Security
- Caribbean Islands-COUNTRY PROFILE: The Bahamas THE BAHAMAS
- Caribbean Islands-Health and Welfare
- Caribbean Islands
- Caribbean Islands-Crops
- Caribbean Islands-National Income and Public Finance
- Caribbean Islands-COUNTRY PROFILE: Dominica DOMINICA
- Caribbean Islands-National Security
- Caribbean Islands-Population
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Trade and Finance
- Caribbean Islands-Chapter 1 - Regional Overview
- Caribbean Islands-Economy
- Caribbean Islands-Labor Organizations
- Caribbean Islands-Revenues
- Caribbean Islands-THE REGIONAL SECURITY SETTING
- Caribbean Islands-Construction
- Caribbean Islands-Manufacturing
- Caribbean Islands-Agriculture
- Caribbean Islands
- Caribbean Islands-ISLANDS OF THE COMMONWEALTH CARIBBEAN
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Geography
- Caribbean Islands-Political Dynamics
- Caribbean Islands
- Caribbean Islands-Relations with Latin American and Caribbean Countries
- Caribbean Islands-National Security
- Caribbean Islands
- Caribbean Islands-COUNTRY PROFILE: ANGUILLA
- Caribbean Islands-NATIONAL SECURITY
- Caribbean Islands-Economy
- Caribbean Islands-THE EUROPEAN SETTLEMENTS
- Caribbean Islands-Balance of Payments and Debt
- Caribbean Islands-INTRODUCTION
- Caribbean Islands-Foreign Relations
- Caribbean Islands
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Current Strategic Considerations
- Caribbean Islands
- Caribbean Islands-Narcotics Crime
- Caribbean Islands-Economy
- Caribbean Islands-Petrochemicals
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-POPULATION
- Caribbean Islands
- Caribbean Islands-The Post-Emancipation Societies
- Caribbean Islands-The West Indies Federation, 1957-62
- Caribbean Islands-Relations with the United States, Britain, and Canada FOREIGN RELATIONS
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Geography
- Caribbean Islands-Crops
- Caribbean Islands-National Income and Public Finance
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-Precursors of Independence
- Caribbean Islands
- Caribbean Islands-Education
- Caribbean Islands-The Criminal Justice System
- Caribbean Islands-GEOGRAPHY
- Caribbean Islands-Role of Government
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Economic Policy and Management
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-Political Unrest and Economic Troubles, 1970-73
- Caribbean Islands-Education
- Caribbean Islands-Labor Force and Industrial Relations
- Caribbean Islands-Chapter 5 - The Leeward Islands
- Caribbean Islands -Chapter 2 - Jamaica
- Caribbean Islands-Health and Welfare
- Caribbean Islands-The Governmental System GOVERNMENT AND POLITICS
- Caribbean Islands-The Sugar Revolutions and Slavery
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-The Cuban Presence
- Caribbean Islands-Geography
- Caribbean Islands-Population
- Caribbean Islands-Land Tenure and Use
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-Role of Government
- Caribbean Islands
- Caribbean Islands-Government and Politics
- Caribbean Islands-The Governmental System GOVERNMENT AND POLITICS
- Caribbean Islands-Economy
- Caribbean Islands-Industry
- Caribbean Islands
- Caribbean Islands-The Increased Role of the United States
- Caribbean Islands-Population
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Transportation and Communications
- Caribbean Islands-Country profile: Grenada GRENADA
- Caribbean Islands-Iron and Steel
- Caribbean Islands-Geography
- Caribbean Islands
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Postwar Federation Efforts
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Government and Politics
- Caribbean Islands
- Caribbean Islands-Population
- Caribbean Islands-GEOGRAPHY
- Caribbean Islands-Industry
- Caribbean Islands-Consolidation and Economic Hardship, 1962-69
- Caribbean Islands-Patterns of Development
- Caribbean Islands-Geography
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