Trinidad and Tobago is the Caribbean’s largest economy, having a Gross Domestic Product of $30.12 billion. The country’s small population translates to a high GDP per capita of $32,637, the third-highest in North and South America, and only surpassed by Canada and the United States. The country has an industrial economy, something that is uncharacteristic to Caribbean countries. Some of the major industries in the country are its energy, agriculture, manufacturing, and tourism industries, whose products form bulk of the country’s annual exports. The economy is mainly reliant on its natural resources, as the country sits on the Caribbean’s largest reserves of petroleum and natural gas. The country has a low unemployment rate, relative to the region, of 4.4%. While heavy industry and mining are the biggest industries in the country, it is the service industry that is the most important employer in the country, representing about 63% of the nation’s labor force. Excellent business policies from the government, plus good infrastructure in the country have made Trinidad and Tobago popular in attracting foreign investments.
The energy industry is the island nation’s biggest industry and the primary driver of its economy. The abundance of oil and gas in Trinidad and Tobago is pointed out as the reason behind the consistent economic dominance of the country in the Caribbean region. The country’s proven oil reserves are estimated to be 0.716 billion barrels. Trinidad and Tobago sits on enormous natural gas reserves estimated to be about 664 billion cubic meters. Petroleum and its products are the country’s leading export items and represent about 22% of the annual government revenue. Most of the country’s oil, or three-quarters of its annual oil production, is sourced from its offshore oil wells. Oil production in the country experienced its peak in the 1970s when it stood at 0.245 million barrels each day, but later fell to the 0.141 million barrels produced each day in the early 21st century. The annual production of natural gas in the country is about 14 billion cubic meters, one of the highest in the world. The natural gas is used in the manufacture of ammonia and methanol, and in the generation of electricity. Ammonia and methanol are essential export items of Trinidad and Tobago, with the country being the world’s number-one exporter of the two petrochemicals. However, the industry is a minor employer and is attributed to only 5% of all employed people. As much as 99% of the nation’s electricity is produced using fossil fuels. The domestic electricity production in the country amounted to 5.2 billion kWh in 2000, against an annual demand of 4.8 billion kWh in the same year. The Trinidad and Tobago Electricity Commission is the body tasked with the generation and supply of electricity in the country, catering for about 95% of the country’s electricity generation. Most of the electricity is generated in the island of Trinidad and connected to Tobago through a submarine cable.
Agriculture is an essential industry in Trinidad and Tobago’s economy, accounting for 0.3% of the country’s Gross Domestic Product. The country is a major producer of cocoa, sugar, citrus fruits, and coffee, which are also the top agricultural export commodities from the nation. Traditionally, the industry was the primary employer in the country, but exponential growth in the energy industry witnessed in the late 20th century saw most of the workforce shifting from agricultural production and moving to the energy industry. The prominence of the energy industry has led to the decline of the country’s agricultural production in recent years. For instance, Trinidad and Tobago’s production of coffee in 1985 amounted to 2,360 tons, but by 1999 the production had shrunk to 1,000 tons. The country’s sugar production in 1999 stood at 95,000 tons, a massive decline from the 0.25 million tons produced in 1961.
The manufacturing industry is an essential economic pillar in Trinidad and Tobago. Heavy industry is at the core of manufacturing, as the country is a famous producer of steel and iron. The United States is one of the leading markets of the metals. There also exists a significant demand for steel in the domestic market, as construction activity in the country has recorded tremendous growth in recent years. Despite its small size, the country is the world’s top producer of many petrochemicals including methanol, ammonia, and urea. The prominence of the Trinidad and Tobago in the production of these petrochemicals is attributed to the abundance of the raw material required in their production, the natural gas. Most of the petrochemicals produced are exported, earning the country millions of dollars in foreign exchange. Trinidad and Tobago also produce significant amounts of cement, most of which is locally consumed in the country’s real estate sector. The government established the country’s first methanol producing plant in 1985, whose annual methanol production amounts to 0.36 million tons. There have been an additional six methanol plants since then, which have increased the petrochemical’s production. In the 1980s, as much as 18% of the urea imported by the United States was sourced from Trinidad and Tobago. The small country is also recognized as a leading producer of fertilizer in the world, with annual production in the 1980s reaching 1.6 million tons. The country is also considering the production of dimethyl ether and calcium chloride, to boost further its manufacturing industry.
The country has a favorable balance of payments, where the value of its annual exports exceeds that of its annual imports. In 2015, exports from Trinidad and Tobago were valued at $11 billion, with petroleum and oil products, LNG, urea, ammonia, methanol, and steel being the primary export commodities. The biggest markets for the country’s exports are the United States, Brazil, and Argentina accounting for 37%, 8.2%, and 8% of Trinidad and Tobago’s total annual exports. The country’s annual imports in 2015 were valued at $5.9 billion. Machinery, lubricants, fuels, and manufactured goods are Trinidad and Tobago’s significant import items. Most of these imports are sourced from the United States, China, and Singapore, the country’s leading import partners and sources of 38%, 8.2%, and 4.6% of Trinidad and Tobago’s total imports, respectively.