You have been invited by the government of Trinidad and Tobago (West Essay

You have been invited by the government of Trinidad and Tobago (West -Indies) to advise the political leader on economic development initiatives that can help - Essay Example Windfalls from surging prices of energy, exploitation activities of new gas fields and moves towards industrial capacity expansion have contributed in no small measure to vibrant economic activity, strengthening of foreign reserves and excess liquidity witnessed in the financial system. Certain indicators like capacity strains in the construction and other sectors, tightening of the labor market and an accelerated inflation point towards the operation at full or near potential of the economy. To ensure that Trinidad and Tobago’s economy is improved upon and achieves a high performing economy status, the need for certain economic development initiatives cannot be overemphasized. According to a 1999 estimate, the GDP of the country stood at about $9.41 billion dollars at growth rate of about 5%.the purchasing power parity or GDP per capita also stood at about $8500 in 1999.A further breakdown of composition by sector of the GDP reveals that services has the highest input of 54% followed by industries with 44% and by agriculture with 2%-according to a 1998 estimate. Exports from the country in 1998 had a value of $2.4bn (f.o.b).In order to raise the standard of living for current and future generations, there is an important need to strike a delicate balance of efficient investment of energy windfalls in promoting social objectives and economic diversification while avoiding an overheating of the economy and inflationary trends by the strategic pacing of energy reven ues. It is important to note that, the gulf between the non-energy sector and its energy counterpart has widened with the non-energy sector witnessing a fiscal deficit alongside an accelerated public spending increase. Urgent steps need to be taken so as to reverse overdependence on revenues from the oil sector. Human development and infrastructure should be allocated high-quality spending. Given the upward trend in inflation and the real