(Trinidad Guardian) T&T has been given high marks for the management of its resources by Nobel Prize-winning economist Joseph Stiglitz. Stiglitz, who was speaking Friday on the global challenges and opportunities stemming from the United States (US) crisis, said: “T&T has done pretty well in managing its resources…one of the countries that has done so well in this regard.”
Delivering the feature address on the second day of the Unit Trust Corporation’s two-day Investor Conference at Hyatt Regency hotel in Port-of-Spain, Stiglitz was quick to warn the Government that it must be mindful of how success is measured with regards to economic growth and policies.
He pointed out that countries make the mistake in using the gross domestic product (GDP) as the only measurement of success. “GDP is not a good measure of success. The objective of economic policies should be sustainable, equitable and should encourage democratic development,” Stiglitz said.
Stiglitz said T&T should design policies that would promote growth and allow it to buffer against global volatility.
This should include measures such as fiscal, industrial and educational policies, which are targeted at the entire structure of the country and should be viewed as investments in the country’s future.
He stated that even though T&T’s GDP may look high, according to Finance Minister Winston Dookeran, it is not enough to determine sustainability and stability in the economy.
While T&T received kudos for sound management of its resources, Stiglitz warned that if the, “wealth below the ground is not invested above the ground,” the country would be in danger of becoming poorer. Stiglitz, who outlined the implications for the Caribbean regarding the economic crisis in the US, said there would be adverse effects for T&T’s economic growth because of its close ties to the US economy. He said that one sector likely to remain weak is mass-market tourism. Stiglitz said the ability of middle-class Americans to afford Caribbean vacations would be impacted by the worsening income inequity and the nine per unemployment in the US.
However, he said, all is not lost as T&T could focus on the high-end tourists, since most of the wealth remains concentrated on the upper echelon of American society. The energy sector is another area that T&T could use to help it out of this slow economic time, he said. “The price of oil is likely to remain high and T&T could benefit from this.” He said T&T could look to emerging markets to offset what is happening in the US, namely China, where there is a strong demand for oil.