Over the last few months, we have witnessed major job cuts, the collapse of financial institutions, substantial reduction in the price of oil. What does it really mean for Trinidad and Tobago and is the man in the street really properly informed? Last week I facilitated a workshop in which the participants anticipated major layoffs in the public sector.
My interpretation of the data before us is that:
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There are some regional and international economies that are experiencing NEGATIVE growth, but Trinidad is not one of them. In fact the economy of Trinidad is expected to continue to grow, albeit at a slower rate than originally projected.
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The significant growth witnessed in places like China in previous years, was actually "artificial", fuelled by the scheduled Olympics, so that the current layoffs should have been anticipated.
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The local escalation of prices of construction materials were in part influenced by the demand for construction material in China (due to construction of the Olympic stadium and ancillaries) and in part by our own government's construction activity. Again this activity cannot and will not go on infinitely.
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The artificial high prices paid for real estate in Trinidad were fuelled by the liquidity in the system, which in part was/is facilitated by illegal activity, the real estate market being an ideal means of money laundering, but how many houses would someone want to buy. Between government and private sectors' construction of residential properties, we are now witnessing a slow down in the real estate market = I am tempted to say a glut of residential properties.
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The government has committed, that while reducing its expenditure, it will not tamper with its commitment to public service salaries and benefits, so why this talk of impending public sector layoffs. Government departments all admit that they are currently short staffed, a situation also influenced by the growth in construction activity.
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Oil is a commodity and commodities are purchased on the futures market, so that the oil and natural gas we sell now is based on prices agreed prior to the decline in oil prices. What volume are we really selling at the reduced prices and how does it average off?
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The prediction is that the US market will begin recovery in early 2010. For those local companies that incur the cost of laying off employees now, is it financially prudent, given that within the next year or two, they will need to once more recruit? Or are employers taking advantage of the current international crisis to free themselves of undesirables? Is this time better spent enhancing the skills of existing staff in preparation for the future return to "normalcy"?
What are people's views??
By Judy Joseph McSween
AFETT member