DEVELOPMENT AGENDA PRIORITY A: Targeted GDP growth through capital investment in key economies.
About priority A
- Establishing sustainable economic development pathways is a vital component of Tobago’s progress. These pathways need to be carefully planned, considering the historical factors that have shaped Tobago’s economic landscape, the urgent demands of current local, regional, and global economic conditions, and the values that support and promote the survival and growth of a model Tobago society and economy.
- Priority A will be guided by a Capital Development Growth Strategy that focuses on tourism, agriculture, housing, urban, suburban, and village infrastructure, the growth of small, medium, and large businesses, and social protection.
- The Capital Development Growth Strategy will be based on eight core capital investment categories: social, financial, cultural, human/institutional, physical, agricultural, environmental, and technological/innovation capital.
- Aligning Tobago's economic growth to these categories ensures that targeted capital investment aligns with sustainable GDP growth.
Funding Strategy
- Funding related to DAP A will be sourced using a hybrid investment strategy, including foreign and local direct investment, public-private partnerships and a new revenue-sharing agreement between Tobago and Trinidad.
Revenue Sharing Agreement
- A revenue-sharing formula will ensure a fair allocation of revenue generated from taxes on oil and gas, as well as all natural resources within the proposed Exclusive Economic Zone for Tobago.
- The formula will take into account several key factors in addressing the disparities in budgetary allocations and overall development between Tobago and Trinidad, ensuring that both islands can deliver comparable levels of public goods and services.
Primary performance benchmark: Priority A
- Benchmark: Increase Tobago’s GDP per capita to at least US $10,000 by 2035 and at least US$20,000 by 2045.
- Indicator of progress/success: GDP per capita year-over-year.
- Benchmark country: Seychelles
Major concerns: Priority A.
| Concerns | Problem Statements |
| Ad Hoc Economic Development approach | a. Persistent, unscientific and ad hoc approach to economic development planning. |
| Fluctuations in GDP growth | b. Inadequate investment in key economic drivers, leading to inherent fluctuations in GDP growth. |
| Public debt | c. Unsustainable levels of public debt. |
| Off-budget funding | d. Inability to fund critical capital investment projects off-budget. |
| Fiscal and monetary policy | e. Lack of institutional capacity to influence fiscal and monetary policy. |
| Large-scale investments | f. Inadequate institutional authority to incentivize large-scale investments in key sectors. |
| Poor budgetary planning | g. Alignment of budgetary planning with multiple small project-based budget line items, instead of development priorities, development program budgets, large, aggregated capital investment categories, and GDP growth targets. |
1.0 Selected Focus Areas Priority A?
The Tobago House of Assembly, led by the Division of Finance, Trade, and the Economy, will focus on the following areas.
- Generational Wealth and Economic Stabilization Fund, GWESF:
- Generational Wealth and Economic Stabilization Fund: Establish a GWESF to manage 3% to 5% of the Tobago budget. This fund will help to stabilize the economy and provide funding for sustainable capital investments.
- Investment Strategies: Develop clear investment strategies for the GWESF fund to ensure it contributes to economic growth and welfare. This would include investments in infrastructure, education, healthcare, and other key economies that support sustainable development.
- Transparency and Governance: Ensure transparency and good governance in the management of the GWESF to build public trust and attract international investors and donors.
- Scaling Capital Investment:
- Investment Categorization: Aggregate capital investment into several discrete categories, including human capital, social capital, cultural capital, physical capital, agricultural capital, environmental capital, and technological and innovation capital. This categorization provides the opportunity to align and analyze the impacts of capital spending in relation to development agenda priorities (DAPs).
- Multiple Tiers of Investment: Organize capital investment into several tiers based on the value of the investment opportunity. This tier-based system will support the scaling and streamlining of capital investment opportunities to market and attract private sector funding.
- Value-Added, Growth-Oriented Capital Investment: Promote value-added, growth-oriented capital investment that supports long-term economic growth, considering Tobago’s social, economic, and environmental realities in key economies, such as tourism, housing, agriculture, clean energy and small and medium-sized and large enterprises (SMELs).
- Investment Management:
- Invest Tobago: Establish Invest Tobago as a one-stop shop for marketing and managing all large-scale capital investment opportunities in Tobago, particularly investments in the tourism economy. This approach to investment management will help to streamline and enhance decision-making related to major capital investment projects.
- Off-budget Financing, in Key Economies:
- Tobago Economic Development Corporation (TEDCO): Establish TEDCO as a private investment, government-sponsored corporation to pursue off-budget financing opportunities for capital development in areas such as tertiary education, healthcare, tourism, agriculture, and digital infrastructure without contributing to the fiscal deficit of the THA.
- Tobago Development Fund: Establish the Tobago Development Fund, TDF, to identify and access international grant funding to finance key development priority projects and business development. During its initial stages of establishment, the fund will be capitalized using public funding through the budgetary process.
- Business Growth and Expansion:
- Digital Business Hubs: Utilize the existing digital business hubs to facilitate Trade and Business expansion.
- Interoperability: Integrate existing digital business hubs with THA’s online business platforms and private sector systems in Tobago. This will allow for a more comprehensive and efficient service delivery.
- Financial Services Integration: Integrate financial services, including access to loan financing, venture capital financing, insurance, and other banking services. This can help small and medium-sized enterprises (SMEs) overcome financial barriers and enhance operational efficiency.
MAIN REFERENCE INFORMATION
- Investing For The Future In Latin America And The Caribbean
- Building a Rules-Based Fiscal Framework for Trinidad and Tobago
- What does it mean for a government program to be off-budget?
- Trade Single Windows Would Help the Region’s SMEs to Expand Internationally
- Helping SMEs internationalize through trade facilitation
- Investing Back Home: The Potential Economic Role of the Caribbean Diaspora
- National e-Commerce Strategy: Trinidad and Tobago
- Adding Value Through Venture Capital in Latin America and the Caribbean
- Trinidad and Tobago: WDI, Macro Poverty Outlook, and official data. a/ Most recent WDI value (2022)
- Trinidad and Tobago’s 2025 Budget Commentary
- OECD Investment Policy Reviews Caribbean Rim: ANTIGUA AND BARBUDA, GRENADA AND ST. LUCIA
- Resilience and capital flows in the Caribbean: Economic Commission for Latin America and the Caribbean
- Canada - Nova Scotia Offshore Petroleum Resources Accord
OTHER INFORMATION
- Caribbean Development Dynamics 2025
- The Impact of Capital Account Liberalisation in the Caribbean
- Coordination of Monetary and Fiscal Policies in Trinidad and Tobago
- Trade Minister: Gov’t initiatives laying the foundation for a stronger, more dynamic economy
- Whole of Government approach to small business development.' Government Sticking to Road Map to SME Recovery Plan
- The Global Competitiveness Index 2017–2018 Rankings
- An Assessment of Trinidad and Tobago’s Progressive and Non-Progressive Cultural Factors of Development
- Comprehensive Wealth Report Trinidad And Tobago Moving Beyond GDP To Promote Sustainability, Resilience, And Well-Being
- The Role of Private Capital in Shaping a Sustainable Future in Latin America and the Caribbean
- Investment opportunities in the Caribbean 2024
Targets and Indicators of Progress/Success
Target-A-1
Invest the equivalent of at least 30% of GDP in physical capital by 2035 and at least 40% by 2045.
Indicator-A-1
Physical capital investment as a percentage of GDP year-over-year.
Target-A-2
Invest the equivalent of at least 3% of GDP in human/institutional capital by 2035 and at least 5% of GDP by 2045.
Indicator-A-2
Human/institutional capital investment as a percentage of GDP year-over-year.
Target-A-3
Invest the equivalent of at least 15% of GDP in social capital by 2035 and at least 20% by 2045.
Indicator-A-3
Social capital investment as a percentage of GDP year-over-year.
Target-A-4
Invest an appropriate % equivalent of GDP in cultural capital by 2035 and an appropriate % equivalent of GDP by 2045.
Indicator-A-4
Cultural capital investment as a percentage of GDP year-over-year.
Target-A-5
Invest an appropriate % equivalent of GDP in environmental capital by 2035 and an appropriate % equivalent of GDP by 2045.
Indicator-A-5
Environmental capital investment as a percentage of GDP year-over-year.
Target-A-6
Invest the equivalent of at least 5% of GDP in agriculture capital by 2035 and at least 10% of GDP by 2045.
Indicator-A-6
Agriculture capital investment as a percentage of GDP year-over-year.
Target-A-7
Invest the equivalent of at least 3% of GDP in financial capital by 2035 and at least 5% of GDP by 2045.
Indicator-A-7
Financial capital investment as a percentage of GDP year-over-year.
Target-A-8
Invest the equivalent of at least 2% of GDP in technology/innovation capital by 2035 and at least 3% of GDP by 2045.
Indicator-A-8
Technology/Innovation capital investment as a percentage of GDP year-over-year.
Target-A-9
Beginning in fiscal 2027, increase the total annual capital development expenditure to the equivalent of at least 2 times GDP by 2030 and at least 2.5 times GDP by 2035.
Indicator-A-9
GDP equivalent of total annual capital development expenditure year-over-year.
Target-A-10
Increase the annual revenue from taxes and other sources to at least 45% of total expenditure by 2030, at least 75% of total expenditure by 2035 and at least 100% of total expenditure by 2045.
Indicator-A-10
Annual revenue from taxes and other sources year-over-year.
