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2021–anticipating some rain clouds and silver linings

By Dr Marlene Attzs, Economist

The year 2020 came and went in a blur, almost like the year that never was. 2021 has been ushered in with glimmers of hope on both the national and international fronts.  Options are available for COVID-19 vaccines (even though there now are at least four variants of the original virus) and a new administration in the USA suggests different and welcomed geopolitical perspectives from the North. In T&T, we have our own rain clouds and potential silver linings.

A story carried in one of the daily newspapers spoke of children missing school, even the online teaching, to join the labour force. While this is not unique to Trinidad and Tobago—similar stories are being reported worldwide.

Education is an investment in future livelihoods and missing school now will likely translate into a less-than-sustainable livelihood in the future. Job prospects are likely to be limited with reduced income-earning possibilities.

‘DO NOT expect an ease in the foreign exchange (forex) market in 2021’ was the headline. A reminder, as if we needed one, that for several years we have been experiencing a decline in foreign exchange earnings, hence less foreign exchange available.

The fact is that we continue to consume what we do not produce and this, among other things, causes an imbalance in the foreign exchange accounts. From a theoretical standpoint, one aspect of the solution to the foreign exchange crisis would be a devaluation of the TT$ so that more TT$ would be paid for one US$—a disincentive to consume foreign currency.

The pain point with that solution, however, is that since we import practically all that we consume, the cost of imports and generally the cost of living would increase – and disadvantage many persons in our society, including persons on fixed incomes such as pensioners.

The country’s international debt servicing also will be costlier since foreign debt is in US dollars. Add the foreign exchange dilemma to the multidimensional challenges we face in the wake of the pandemic and the rain clouds are evident.

But all is not lost.

As mentioned earlier, the change in the US Administration presents opportunities for a different relationship between the northern superpower and the Caribbean.  The Biden-Harris Administration has signalled, for example, a softer position on migration and they also are keen to stimulate the US economy and restore employment.

This potentially could benefit us since the Caribbean diaspora in the US might find themselves in a better position to remit funds to their families who may have become unemployed.

Remittances always have been a significant source of income for many Caribbean households and now, given COVID-induced unemployment.

Then there’s Carnival 2021—no masquerading, no Carnival fetes, no Panorama—but it still is Carnival season, a Carnival of the mind!

As usual our artistes have not disappointed. And while it is not a lucrative season financially for these artistes, I appreciate that many of them are still giving us sweet Soca music and keeping spirits high.

Bunji Garlin has penned ‘Heart of the People’, one of my favourites for Carnival 2021, in which he skillfully captures what I call the ‘Economics of Carnival’.

He lyrically reminds us that Carnival is not simply about ‘wine and jam’ but it also is about livelihoods:

“…Think about the people who was hired to run pipe,

The man to build tent, man who hired to run light…

The little youth upon deh one bike with the bag ice,

Security weh monitor car till sunrise,

The vendor with the water juice, the hot chicken and fries,

I know you see it and you never take stock,

Cuh Carnival in yuh mind is only bout woman and wuk,

You so caught up with enjoyment, That you don’t see the level of employment

That coulda’ save life when yuh think this thing woulda’ destroy them

Carnival is a sea that deep

Ah you doh know nottin’ bout depth

Becau’ yuh follow old talk like sheep

Ah you doh know nottin’ bout depth, depth, depth, depth

It start from the people,

Deep down within the heart of the people…”

So even as the rain clouds hover and uncertainty looms from various sources, let us remember that we survived 2020 and behind every dark cloud there usually is a silver lining.

That’s just my point of view!