Alvin Hilaire: Aspects of Trinidad and Tobago's global economic interactions

Address by Dr Alvin Hilaire, Governor of the Central Bank of Trinidad and Tobago, at the Launch of the Monetary Policy Report, Port of Spain, 11 November 2016.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
06 February 2017

1. Trinidad and Tobago is deeply embedded in world economic affairs. Trading in goods has always been significant, with exports of food crops (sugar, cocoa) giving way to energy and energy-based commodities (oil, natural gas, methanol, urea etc.) in exchange for a wide range of imports. Over time, with advances in transportation, communication and technology more services began to be traded, either directly (for example tourism or insurance) or via the movement of seasoned professionals or less skilled workers. Nowadays, with an open external capital account, financial flows also feature prominently. Foreign direct investment is attracted by comparative long term prospects, while portfolio flows often move rapidly in response to perceived short term changes in risk and profit opportunities. Against this backdrop it is evident that changes in international energy prices or a recession in the United States would directly affect the local economy. But seemingly remote developments-such as migration patterns in Europe, the integration of the renminbi as a reserve asset, or the loss of correspondent banking relationships by Belizean banks-can likewise have deep repercussions for Trinidad and Tobago. Moreover domestic economic policies and performance can have extensive consequences for neighboring territories, with feedback effects on Trinidad and Tobago itself.