(By Wesley Gibbings) Director-General of the International Labour Organisation (ILO), Guy Ryder, is advising against Caribbean countries placing their hopes in too narrow a variety of economic options.
Ryder spoke with Insight while on a visit to Trinidad and Tobago where he met with Prime Minister Dr Keith Rowley, other members of government and representatives of business groups and the labour movement.
Referring to the current decline in national revenues from the oil and gas sector in T&T, Ryder noted the differences in impact throughout the Caribbean. This includes the recent decline in electricity rates and the price of gasoline in Guyana and in a number of other countries of the region.
The contrasting impacts of the situation are displayed by that fact that while in T&T the decline in oil prices has led to higher prices at the pump due to the partial withdrawal of a longstanding fuel subsidy, some of the country’s regional neighbours are enjoying reductions in the rates for gasoline and other fuels.
In February, both Saint Lucia and Guyana reduced fuel prices and, in Barbados, the price of gasoline fell in March.
Correspondingly, T&T was reasonably insulated against the worst impacts of the 2007/2008 global economic crisis, while the tourism-based economies of the region suffered losses largely as a result of reduced arrivals from major source countries that were under pressure.
Guyana has also experienced the ups and downs of the extractive industries including the market for gold which some analysts predict will eventually enter an era of consistent upward movement.
The difference in impacts, Ryder says, should not be of comfort to those currently enjoying the upside of low energy prices since was what important was “the fundamental question about the capacity of national economies to demonstrate resilience and adaptability to external shocks.”
“Any economy that remains overly dependent on a single product, a single commodity, a single activity is always going to find itself vulnerable to external and its resilience and its capacity to absorb those shocks will be correspondingly debilitated,” he said.
T&T is currently reeling from the impact of low world prices for oil and natural gas and the effects of a global glut in steel markets.
More than 1,000 workers have been displaced in these sectors within recent months, leading to concerns about social support mechanisms in place for them.
Ryder said there should be a concern about social protection for workers in the event of the kind of collapse being witnessed in the twin island state and said the wide region should take careful note.
He however advised that talk of diversification should come with concerted efforts to ensure it comes to fruition.