Trinidad And Tobago Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Trinidad and Tobago is a twin-island republic located in the southern Caribbean approximately seven miles off the coast of Venezuela. Trinidad, the larger of the two islands, is situated at Latitude 10 1/2 degrees N, Longitude 61 1/2 degrees W and occupies a total area of 3,000 sq. mi. Tobago, the smaller of the two islands, is located at Latitude 11 degrees N, Longitude 60 degrees W and occupies a total area of 186 sq. mi.

The islands of Trinidad and Tobago were discovered by Christopher Columbus in 1498. Trinidad became a British colony in 1802 and was enjoined administratively to Tobago in 1889. Trinidad and Tobago achieved independence from Britain in 1962 and became a republic in 1976. Trinidad and Tobago follows the Westminster system of government and has two major political parties—the People’s National Movement (PNM) and the United National Congress (UNC). With the exception of the 1986–91 and 1995–2001 periods, the country has been ruled by the PNM. English is the official language of Trinidad and Tobago and the country has a population of 1.3 million. The population is comprised of 40 percent people of African descent and 40 percent of Indian descent. The remaining 20 percent of the population is made up of people of European, Chinese, or Middle Eastern ancestry.

In 2006, the per capita gross domestic product (GDP) of Trinidad and Tobago stood at approximately $17,000. This was up from roughly $10,000 in 2001. The economy grew at a rate of 12 percent in 2006, up from just over 4 percent in 2001. Over the period 2002–06, the economy has averaged growth in the region of 9.7 percent. Growth of the Trinidad and Tobago economy is driven largely by the energy sector. In 2006, the petroleum industry accounted for some 47 percent of the country’s total GDP with the exploration and production subsector being the major contributor. The energy sector is focused on the production of natural gas and related downstream activities.

The country is a major exporter of ammonia, methanol, and direct reduced iron, and is the number one exporter of liquidized natural gas (LNG) in the Western Hemisphere. This export composition represents a fundamental shift in the energy sector, which has traditionally focused on oil production. The government of Trinidad and Tobago (GOTT) collected revenues in excess of $69 billion from the energy sector over the six-year period ending fiscal 2007. It should be noted, however, that the Ryder Scott Hydrocarbon audit report indicates that Trinidad and Tobago’s proven natural gas reserves are at 17.05 trillion cubic feet (tcf ); probable reserves are at 6.23 tcf; and possible reserves are at 7.76 tcf. This report suggests that the country’s natural gas reserves would be depleted in 12 years, assuming no further successful exploration and current levels of utilization.

GOTT’s energy policy calls for continued diversification of the energy sector and the promotion of downstream industries that strengthen linkages with the rest of the economy. In this regard, GOTT’s budget for fiscal 2007 prioritized a number of major gas based projects which included the following:

The Alutrint Smelter. This aluminum smelter has a planned capacity of 125,000 tons per annum and is a joint venture of GOTT (60 percent) and Sural of Venezuela (40 percent). The plant will produce rods, wires, and cable, with plans to establish production facilities for the manufacture of wheel alloys, car wheels, and rims.

The Essar Steel Complex. This integrated steel complex is designed to produce flat hot rolled coil, as well as hot briquette iron and slabs. A unit of Indian conglomerate Essar Global will own and operate the facility in Trinidad, and has signed an agreement to purchase 140 million cubic feet of natural gas per day for the plant.

The Methanol Holdings AUM Complex. Methanol Holdings (Trinidad) Ltd. (MHTL) owns and operates five methanol plants in Trinidad with a combined capacity to produce over 4 million metric tons of methanol per year. MHTL is the second-largest producer of methanol in the world. MHTL is establishing a new petrochemical complex for the production of 1.5 million tons of urea ammonia nitrate and 60,000 tons of melamine per annum.

The Gas-to-Liquids Plant. This plant is a joint venture between World GTL, Inc., and the Petroleum Company of Trinidad and Tobago (Petrotrin), GOTT’s wholly-owned integrated petroleum company. World GTL is a New York–based company established in 2000, while Petrotrin was established in 1993 and is involved in a range of activities from exploration and development to the manufacture and sale of products including gasoline, liquefied petroleum gas (LPG), and kerosene. Gas-to-liquid (GTL) technology involves the chemical conversion of natural gas to liquid fuels. The Trinidad plant will produce 2,250 b/p/d GTL and will require 21 million cubic feet per day of natural gas feedstock for its operations.

The Methanol/Propylene/Polypropylene Project (MPPP). This plant is expected to have a capacity of 160,000 tons per annum and will provide the necessary building blocks for the development of a plastics industry.

Bibliography:

Gorg Holger and Eric Strobl, “The Incidence of Visible Underemployment: Evidence for Trinidad and Tobago,” Journal of Development Studies (v.39/3, 2003);
Akhil Malaki, The Role of Informal Institutions in Microfinance in Jamaica and Trinidad & Tobago (VDM Verlag, 2008);
Kirk Meighoo and Peter Jamadar, Democracy and Constitution Reform in Trinidad and Tobago (Randle, 2008);
Moody’s Investor Services, “Trinidad and Tobago Credit Analysis,” www.finance.gov.tt (cited March 2009);
Anthony Murphy and Eric Strobl, “Employer and Employee Ignorance in Developing Countries: The Case of Trinidad and Tobago,” Review of Development Economics (v.12/2, 2008);
Ralph R. Premdas, Trinidad and Tobago: Ethnic Conflict, Inequality, and Public Sector Governance (Palgrave Macmillan, 2007);
J. Storey, “Racial and Gender Discrimination in the Micro Firms Credit Market? Evidence From Trinidad and Tobago,” Small Business Economics (v.23/5, 2004);
Eric Strobl and Frank Walsh, “Minimum Wages and Compliance: The Case of Trinidad and Tobago,” Economic Development and Cultural Change (v.51/2, 2003).

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