First colonized by the Spanish, the islands came under British control in the early 19th century. The islands’ sugar industry was hurt by the emancipation of the slaves in 1834. Manpower was replaced with the importation of contract laborers from India between 1845 and 1917, which boosted sugar production as well as the cocoa industry. The discovery of oil on Trinidad in 1910 added another important export. Independence was attained in 1962. The country is one of the most prosperous in the Caribbean thanks largely to petroleum and natural gas production and processing. Tourism, mostly in Tobago, is targeted for expansion and is growing. The government is coping with a rise in violent crime.
Trinidad and Tobago has earned a reputation as an excellent investment site for international businesses and has one of the highest growth rates and per capita incomes in Latin America. Economic growth for the past seven years has averaged slightly over 8%, significantly above the regional average of about 3.7% for that same period; however, it has slowed down this year to about 5% and is expected to slow further with the global downturn. Growth has been fueled by investments in liquefied natural gas (LNG), petrochemicals, and steel. Additional petrochemical, aluminum, and plastics projects are in various stages of planning.
Trinidad and Tobago is the leading Caribbean producer of oil and gas, and its economy is heavily dependent upon these resources but it also supplies manufactured goods, notably food and beverages, as well as cement to the Caribbean region. Oil and gas account for about 40% of GDP and 80% of exports, but only 5% of employment.
The country is also a regional financial center, and tourism is a growing sector, although it is not proportionately as important as in many other Caribbean islands. The economy benefits from a growing trade surplus. The Manning administration has benefited from fiscal surpluses fueled by the dynamic export sector; however, declines in oil and gas prices have reduced government revenues which will challenge his government’s commitment to maintaining high levels of public investment.