Economist Marlene Attzs: T&T stands at a crossroads

Five years after the Covid-19 outbreak, businesses in Trinidad and Tobago are still grappling with its lasting effects.

The pandemic led to global shutdowns, forcing businesses, schools, and public services to close. Many employees transitioned to remote work, while others faced job losses as companies struggled to stay afloat. The economic downturn resulted in widespread closures, with small and medium-sized enterprises (SMEs) being particularly vulnerable.

The Confederation of Regional Business Chambers (CRBC) highlighted the severe economic impact of the pandemic, stating that business closures led to rising unemployment, widespread business failures, and a decline in gross domestic product (GDP).

In an emailed response to Express Business, the CRBC explained, “Many businesses, particularly in sectors such as tourism, hospitality, and retail, had to close or reduce their workforce, leading to significant job losses. This created a rise in unemployment rates and loss of income for many families.”

The CRBC added that SMEs, which make up a significant portion of the economy, were particularly hard-hit, experiencing prolonged inactivity, cash flow shortages, and mounting debt. It noted that GDP contracted during and after the lockdown periods, further exacerbating existing economic challenges.

Sector-specific challenges were also evident, with the energy industry—crucial to T&T’s economy—experiencing lower demand and declining prices. Meanwhile, the tourism sector, already small, came to a standstill, resulting in significant revenue and foreign exchange losses.

The CRBC further highlighted supply chain disruptions, stating, “Many businesses faced difficulties in sourcing raw materials and products due to global supply chain disruptions. This led to delays, increased costs, and challenges in maintaining inventory, impacting production and service delivery.”

Despite the struggles, some businesses found relief through digital transformation. The CRBC noted that many companies shifted to e-commerce as physical locations faced challenges.

“E-commerce gained momentum as companies sought to reach customers through digital platforms. This shift required investment in technology and new skills for many business owners,” it stated.

Additionally, the CRBC stated that changes in consumer behaviour prompted businesses to adapt. The demand for health-related products, local goods, and online shopping increased, forcing businesses to adjust their offerings and marketing strategies.

Despite the difficulties, business leaders remain hopeful. The shift to digital operations, the upskilling of workforces, and an emphasis on customer experience have helped businesses adapt and continue to thrive in a post-pandemic world.

The CRBC added, “The long-term effects of the pandemic-related business closures in T&T will likely shape the economy and society for years. Factors such as the pace of recovery, changes in consumer behaviour, and the resilience of businesses in adapting to new realities will be critical areas to monitor.”

Business closures not

clearly quantified

Leaders of various chambers of commerce across T&T shared their perspectives on how businesses fared during and after the pandemic. Deoraj Mahase, president of the Couva/Point Lisas Chamber of Commerce, highlighted the challenges businesses faced with logistics and the availability of goods during this period.

“Logistics and availability of goods have become much more challenging and have negatively affected businesses’ ability to access goods timely and, in the quantity, required, which has hampered their ability to continue to operate prior to Covid,” he said.

Mahase also noted a decline in chamber membership as financial struggles forced some businesses to close. SMEs, in particular, were disproportionately affected by the economic downturn.

President of the Greater San Fernando Area Chamber of Commerce, Kiran Singh, focused on the growth of e-commerce during the pandemic, highlighting how businesses adapted to the digital shift to maintain operations and reach customers.

“The country was forced to become more digitally savvy, causing e-commerce to increase exponentially. The increase in online shopping by consumers was further propelled by the pandemic, thereby creating a very competitive environment for the brick-and-mortar stores,” he said.

Singh stated that online shopping presented opportunities, especially for small traders, as it required less capital and fewer human resources, making it more accessible for businesses to thrive in a challenging environment.

“Warehouse and office space would only be required when the business becomes more established,” Singh said.

He also acknowledged that while many businesses closed, the exact number of closures has not been clearly quantified.

“A sectoral analysis did reveal, however, that the MSME (micro, small, and medium enterprises) sector suffered the most casualties,” said Singh.

To assist businesses, Singh said the chamber provided webinars and networking opportunities.

“The pandemic has taught us to be more efficient in resource utilisation. Long-distance meetings and seminars are conducted more and more through virtual platforms.”

Singh noted that his chamber’s membership had grown since its formation six years ago, indicating business resilience.

Businesses adapted

Baldath Maharaj, President of the Chaguanas Chamber of Commerce, acknowledged the initial economic struggles but noted that many businesses adapted and emerged stronger.

“The retail, hospitality, and entertainment sectors were among the hardest hit, but today, we are seeing a resurgence in economic activity,” he said.

While the chamber’s membership declined during and immediately after lockdowns, Maharaj said it has since rebounded.

“We are almost back to pre-Covid

levels. This reflects renewed business confidence and a commitment to networking, advocacy, and business development,” Maharaj said.

He commended the resilience of the business community, and said, “Many entrepreneurs have re-entered the market, and there is a growing focus on innovation, sustainability, and digital transformation.”

Chairman of the T&T Chamber of Industry and Commerce’s Tobago Division, Curtis Williams, stated that the pandemic’s effects are still evident across various sectors.

“The pandemic forced businesses to adapt rapidly, and while some changes have led to innovation and efficiency, others have resulted in lasting challenges,” Williams said.

He stressed that the accommodation and retail sectors were hit hardest, with some businesses downsizing or shutting down completely. Williams also noted a decline in chamber membership, estimating that around 15 businesses had closed, primarily SMEs.

“The sectors hardest hit included accommodation and hospitality, retail, and entertainment and event services,” he highlighted.

Business closures had far-reaching consequences, including job losses, economic slowdown, and financial struggles. Williams added.

“Seeking funding to rebuild has been a challenge, as the financial sector has not been particularly encouraging in supporting struggling businesses,” he said.

Economy yet to fully recover

Economist Dr Vaalmikki Arjoon warned that the economy has yet to recover fully.

“While the economy has shown modest growth in this post-pandemic period, averaging 1.41% annually since 2022, we have yet to catch up with pre-pandemic performance – using International Monetary Fund data, our 2024 GDP still lags 6.14% behind 2019,” he said in an e-mailed response to Express Business.

He said this is a result of the declining energy production, project delays, and obstacles to business competitiveness, such as port clearance delays, regulatory red tape, and crime.

Several non-energy sectors saw contractions between 2019 and 2023, including agriculture (-10%), construction (-8%), and trade and repairs (-5%). However, non-energy manufacturing grew by 18%, driven by a 36% increase in food processing.

Arjoon also pointed to forex shortages as a major challenge.

“The post-COVID era has aggravated forex demand, as businesses face higher supplier prices and recurring shipping cost increases,” he said.

He added that the limited availability of foreign exchange forced SMEs to resort to black-market rates, which increased operational costs. Some businesses turned to alternative solutions like credit cards and money transfer services, further inflating their expenses.

“The black-market rates and restricted supply from banks compelled numerous SMEs to scale back product offerings or downsize their workforce,” he said.

He added that several SMEs continue to face liquidity challenges due to tight margins as several operational costs increased since the pandemic, including rent, prices from suppliers, transport costs and black-market forex rates. This caused some to exhaust their limited savings and slowed their ability to rebound from the pandemic.

“The pandemic has also shown how critical e-business platforms can be to facilitate commercial activities and ensure business continuity and growth, but much of our private sector still adheres to the traditional brick-and-mortar model, relying heavily on in-person transactions. This reluctance to fully embrace digital transformation has left many businesses vulnerable to disruptions, high rental and utility costs, and restricts their ability to compete in an increasingly digital global marketplace, where they can otherwise access customers from other parts of the country and globally to increase their profit margins and forex earnings,” he said.

Signs of recovery

Economist Dr Marlene Attzs said although the Covid-19 pandemic triggered an unprecedented economic contraction in Trinidad and Tobago, with GDP declining by an estimated 7.4% in 2020 (CSO, 2021), economic activity has shown some signs of recovery, with GDP growth estimated at 2.5% in 2023 (Central Bank of T&T, 2023).

She gave some examples of these indicators and said, “Oil and gas production, which declined during the pandemic due to falling global demand, has limited recovery. Revenues increased in 2022-23 owing to the Russia-Ukraine conflict that led to higher energy prices in 2022-2023. However, overall domestic production remains below pre-pandemic levels.”

Attzs added that increased consumer spending and the shift toward digital transformation also indicate signs of recovery.

“There are several economic indicators that signal improvement in T&T’s business sector post-pandemic such as GDP growth: After the sharp contraction in 2020, GDP growth returned to positive figures, averaging 1.5% - 2.5% between 2022-2024 (CBTT); unemployment rate: While unemployment spiked in 2020-2021, the labour market has shown some recovery,” Attzs said.

“However, informal employment and underemployment remain concerns; forex availability: Forex access remains a challenge on account of unabated demand for imports alongside contracted supply of forex based on lower revenues from the energy sector; inflation and consumer spending: Inflation, which surged due to supply chain disruptions, has moderated to 4.5% in 2024 from a peak of 6.8% in 2022 and business registration – A slow but steady increase in new business registrations, particularly in the tech, food, and services industries, signals some entrepreneurial activity but sustainability remains uncertain given less than buoyant economic conditions and other factors such as crime and forex availability that continue to challenge SMEs,” she said.

As for the impacts of SME closures, she stated that it could lead to increased unemployment, weakened supply chains, and reduced tax revenue.

She added that this sector was among the hardest hit during the pandemic. Many SMEs, especially in tourism, retail, and hospitality, shut down permanently due to prolonged restrictions and financial strain.

“The road to recovery has been slow and uneven for SMEs. Some businesses that survived or pivoted during the pandemic (e.g., moving online, shifting business models) have rebounded, but many have not returned,” she said.

Attzs said the challenges that plague SMEs and continue to do so are limited access to credit, high operating costs, competition from large firms and imports and labour market shifts.

She added that the labour market in 2025 is significantly different from pre-pandemic times given the job losses and migration and a rise in migrant workforce.

“Many professionals left for opportunities abroad creating labour shortages in certain fields like healthcare, IT, and finance. The influx of Venezuelan and other migrants has partially offset job losses in low-wage sectors like construction, security, food and beverage and domestic work. Approximately 44,800 Venezuelan migrants, refugees, and asylum seekers were residing in T&T as of November 2023; Over 50,000 Venezuelan citizens were estimated to be residing in T&T, with 16,523 having officially regularized their immigration status,” she highlighted.

However, if there is no improvement from this state in the next five years, Attzs believes that there could be worsening economic stagnation, continued brain drains, persistent SME struggles, higher inflation and cost of living and increased social unrest.

“T&T stands at a crossroads. The choices made now will determine whether the next five years bring further economic decline or sustainable growth. A survey conducted by the T&T Coalition of Services Industries (TTCSI) and the T&T Manufacturers Association (TTMA) revealed that 36% of businesses terminated full-time employees, and 55% terminated part-time or contractual employees due to Covid-19 lockdown restrictions. While exact figures on the total number of job losses are not provided, the survey indicates a substantial reduction in employment across various sectors during the pandemic,” said Attzs.