It should come as no surprise that Trinidad and Tobago's economy growth rate has been predicted at a healthy 6.3 percent by the end of 2005. A report from the United Nations Economic Commission of Latin America and the Caribbean (ECLAC) notes that this growth has been "mainly thanks for the performance of the energy and tourism sectors." Figures from the Central Statistical Office (CSO) show exports remaining slightly higher than imports, with Gross Domestic Product, the Gross National Income (GNI) and Direct Foreign Investment rising steadily. According to the Central Bank's May 2004 Economic Bulletin, foreign reserves stood at US $2,728 million in the first quarter of 2004.

But these statistics raise a mystery. How is it that, in a country with such per capita wealth, there is a 21 percent poverty rate? How is it, in a country with such a booming economy, there is an average rate of one murder every 25 hours? Why is it that, even as the economy grows, the unemployment rate holds steady at ten percent?

The short answer is that the management of the country's economy is divorced from the handling of the country's politics. That is, the economic policies being pursued by the private sector are maintaining the country's overall economic health. But it appears that the financial benefits which accrue to the Government are not being utilised in a manner which creates the social stability expected from a robust economy.

The 21 percent poverty rate in a country with a GNI per capita of $45,000 suggests that wealth distribution in Trinidad and Tobago is highly skewed. But what is to be done to redress this balance?

History and economics prove beyond reasonable doubt that State interference with market forces increases poverty and also leads to political oppression. The long history of welfare schemes, especially the Special Works which 40 years later is now known as the URP, shows that such programmes only make the poverty cycle spin faster.

This cycle connects directly to the crime rate. The rationale for these make-work programmes has always been to maintain social stability, first by providing a basic income to those who cannot get employment elsewhere and, secondly, by so doing preventing those persons from turning — or returning — to crime.

However, it appears that the programme has failed spectacularly in achieving these ends. It might be argued that things might be much worse without the URP or CEPEP, but such a position is not very persuasive.

It is especially unconvincing because it underestimates the initiative and hardiness of the very persons these programmes were set up to help and who, historically, have survived and even prospered under far more trying conditions.

The Government's challenge is to find a way to strengthen social responsibilities without undermining market policies. However, this is no easy task. Minimum wage policies reveal the difficulty. Economists know that a minimum wage raises unemployment and does not improve the status of the poor. CSO statistics reveal that young males now have an unemployment rate twice that of the national average. Since it is young males who commit most violent crimes, it can be argued that the minimum wage, despite its good intentions, has contributed to the rising crime rate.

So how will the Government use the country's economic health to create societal well-being? Whatever strategies are adopted, one thing is certain — they will have to be different from the present approach.

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