By Dana Sookdeo & Robin A. Montano
The ongoing humanitarian crisis in Venezuela has ravaged both their society and their economy, leaving the nation and their people among the most destitute in the world. As a result, a migration crisis has struck neighbouring Latin American and Caribbean nations, in addition to the United States, Canada, and Spain. Due to Trinidad and Tobago’s proximity to the crisis-stricken nation, we have experienced a significant amount of legal and illegal immigration of Venezuelans that are fleeing the exponentially deteriorating way of life in their native land. The mass migration of Venezuelans has now shown that they are one of the single largest population groups displaced from their home.
The following statistics aids in depicting the ongoing crisis:
- 9.3 million Venezuelan nationals are severely food insecure
- 96% of the Venezuelan population are living in poverty (below USD$1.90/day, and 70% live in extreme poverty (below USD$1.25/day)
- 59% of Venezuelan households are unable to buy food due to insufficient income
- In the year 2017, Venezuelans lost twenty seven pounds (or about twelve kilograms) on average
Venezuelan immigration into Trinidad and Tobago has been an extremely sensitive subject. As more migrants find their way onto our tropical shores, xenophobic discourse and behaviour become more noticeable. This xenophobic discourse and behaviour largely comes from the argument that our country cannot economically afford to accept the great amount of refugees that are arriving. Accompanying this argument is the fear that Venezuelans are arriving in Trinidad and Tobago and ‘stealing’ Trinbagonian jobs, therefore posing a threat to the national economy.
Economists, on the other hand, believe that the influx of Venezuelan migrants is actually a good phenomenon that could bring significant benefits to the Trinbagonian national economy. They argue that in an economic climate where oil prices are plummeting and the decline of the country’s main revenue stream is now exacerbated, Trinidad and Tobago can utilize this influx of migrants to invest labour into other sectors of our national economy, thus diversifying our revenue streams, which is crucial given the ongoing political, social and economic events that the world is facing. Diversification is therefore critical for our twin-island Republic as we feel the effects of plummeting revenues in oil and gas.
However, using the Venezuelan migration to benefit the Trinidad and Tobago economy may be tricky, but once managed well, it can result in economic growth and development. Business owners throughout our national economy have spoken highly of Venezuelan migrant competency, productivity, and work ethic- through informal interviews. Moreover, in 2019, Trinidad and Tobago ranked fifth globally for having a high worker absenteeism rate (George 2019). Hence, these productive characteristics of migrant labour being added to our national job market provides the platform to raise overall worker productivity, and consequently economic production. Furthermore, according to a statement
by the minister of National Security, there is a lot of work to be done in this small island developing state that domestic labourers are not interested in. Thus, these ‘undesirable’ jobs may serve as a starting point for integrating Venezuelan migrants into the labour force, as they are more willing to accept employment in unattractive sectors.
Additionally, policy makers can allude to the Heckscher-Ohlin economic theory in their attempt to ensure that the influx of migrants can effectively be of benefit. In essence, the Heckscher-Ohlin theory states that nations should export those goods which utilize their most abundant resources and import those which utilize the scarce/expensive resources. In this case, Trinidad and Tobago, much like all other small island developing states, is labour abundant, (the country possesses more labour than capital) and therefore should produce those goods which utilize more labour than capital. Therefore, according to the theory, they should engage in labour intensive sectors for increased export earnings. Consequently, already possessing a comparative advantage in labour intensive goods, the economy can benefit greatly from an addition to the factor of production endowment.
Furthermore, on the argument on the need for diversification, the additional labour supplied by Venezuelan nationals can be effectively utilized through sectoral work permits in the country’s non-booming tradable sectors (such as manufacturing and agriculture) that hold excess capacity. For instance, the additional labour can be absorbed by the country’s manufacturing sector which holds a 32% excess capacity. The increase in the overall population can have beneficial effects in the food, beverage and tobacco industry, which are the country’s leading manufacturing subsectors. Noting that these goods are labour intensive, using the gift of a labour endowment to fill that excess capacity could reap many trading benefits.
Alternatively, Venezuelan migrant labour can assist in development of the agricultural sector which may further diversify the national economy. In 2018, agriculture accounted for 0.5% of Trinidad and Tobago’s GDP, 2.6% of exports and a vast figure of 85% of imports (Shik, Boyce, Savlo et. al., 2018). The knowledge and skills of able-bodied Venezuelan migrants, can now be shared and utilized in our agriculture industry and even help in producing a wider range of agricultural products than the amount that is currently produced. Some agricultural products may include tropical fruits, tilapia, pumpkin and tobacco. In theory, if this plan were to be successful, the economy has the potential to not only address food security concerns by increasing the amount of food available and, consequently, lowering the price of food on the market, but also decrease the amount of agricultural imports, increase the amount that is exported, and therefore increase the net exports of the economy and increase the GDP.
However, it must be noted that evidence has shown that the immigration of Venezuelans has been handled poorly thus far by the country. Instead of utilizing sectoral work permits and forming policies that would allow the country to benefit from the migration, skilled Venezuelans have found themselves working in the non-tradable sector i.e., the sector that is unable to bring in foreign exchange and aid in diversification (for example, bars and restaurants).
In addition to increasing international trade in the non-booming tradable sectors, these highly productive workers can also be beneficial in building Latin American connections by building stronger trade relations with the rest of Latin America. According to Dirk Prudent, commercial manager of GISCAD Ltd., Trinidad and Tobago can position itself as a launch pad for other markets in the region, which would provide more scope for international trade. Especially seeing as there are a number of local companies that aim to expand into the Latin American markets. Thus, hiring efficient Venezuelan migrant workers can aid in navigating language barriers, amongst other things.
With all this being said, we must understand that in order for migration to benefit an economy, the migrants must be treated appropriately. They should not be taken advantage of by being paid below the minimum wage and/or have their human rights violated, and they should be able to afford the basic human needs. In fact, it has been noted that the way immigrants contribute to the economies of their host countries depends heavily on their working and living environments. In this regard, Trinidad and Tobago should make it a priority to protect the rights of the Venezuelans coming in, and place policies against discriminatory acts against them. These are basic fundamental requirements for there to be economic development in any economy.
If it was to be assumed that Venezuelans were to reside in Trinidad and Tobago permanently, policies can also be implemented that steers the formal education system into the non-booming tradable sectors and educates Venezuelan migrants in those specific areas to encourage employment. They can bring that change in the social aspect of our institutional framework that is needed for sustainable growth and development.
However, it must be noted that while in theory the Venezuelan migration can benefit the Trinidad and Tobago economy, there are several limitations in effectively doing so, such as time lags in policy implementation along with a range of cultural and social factors. Until these limitations can be effectively addressed, the economy will not be efficiently utilizing this endowment of labour.
In conclusion, migration in the past has been proven to be of great benefit to countries over time. Therefore, Trinidad and Tobago, a country that has been facing an ongoing recession, can reap many economic benefits from the influx of Venezuelan migrants, and contrary to the popular belief that the country is unable to absorb the excess labour into the labour market, data shows that there is excess capacity in the sectors most needed for diversification where extra employment can be efficiently utilized. It has been shown in numerous ways that the highly skilled and productive Venezuelan workers can contribute significantly to the economy, bringing back on a path to growth and development. However, in order for this to work, the government and policy makers must work together to ensure that immigrants are treated fairly and humanely. The nation has been dealt a good hand of cards through the blessing of the Venezuelan migrants. How well we play the hand of cards, is what determines the economic outcome for the nation.
References
“Applications of International Trade Theory.” University of the West Indies Press. Accessed October 19, 2019. https://www.uwipress.com/9789766403478/applications-of-international-trade-theory/.
“Economic benefits of Venezuelans working in T&T.” Trinidad Guardian, June 1, 2019. http://www.guardian.co.tt/news/economic-benefits-of-venezuelans-working-in-tthinds-6.2.858662.658a31496a.
“Economic Research & Foreign Direct Investment Analysis.” Oxford Business Group. Accessed October 19, 2019. https://oxfordbusinessgroup.com/.
OECD, “Immigrants’ contribution to developing countries’ economies: Overview and policy recommendation”, 2018.
Reis, Micheal. “Vision 2020: The Role of Migration In Trinidad and …” Accessed October 18, 2019. https://sta.uwi.edu/conferences/salises/documents/Reis M.pdf.
“What Are the Impacts of Population Ageing in Trinidad and Tobago?: HelpAge International.” Helping older people live full and secure lives. Accessed October 19, 2019. https://www.helpage.org/blogs/rachel-taylor-30308/what-are-the-impacts-of-population-ageing-in-trinidad-and-tobago-1048/.
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