Professor Compton Bourne, President of the Caribbean Development Bank, said households must be careful not to over-extend themselves during economic booms and to ensure their payments stream does not exceed their income stream.

Speaking on the topic “Making The Best of An Economic Boom,” at the Industrial Engineering and Management Conference held recently at the Faculty of Engineering, Professor Bourne stated that Trinidad and Tobago is now experiencing its second economic boom in a little more than 30 years and that similar to the boom of the 1970s, the current one is based on a period of extraordinarily high petroleum prices in world markets.

“Unlike the preceding period in which the price trend reflected the exercise of power by a producer’s cartel, i.e. the OPEC oil-producing nations, the price surge now seems to reflect market fundamentals of higher and growing demand in the face of war-induced shortfalls in global production,” said Professor Bourne.

Bourne also noted that unlike the resource wastage which followed the boom of the ’70s, the country now had to make the best of the current boom.

“Economic progress achieved during the 1970s boom was significantly reversed during the 1980s according to many of the conventional economic indicators…unemployment rose, profits and labour incomes fell precipitately; businesses closed. Mortgaged residential properties were repossessed and sold. The economy entered into a long recession. The reversals and the associated deterioration of personal economic well-being were damaging to confidence and the national psyche.

“Economic progress achieved during the 1970s boom was significantly reversed during the 1980s according to many of the conventional economic indicators…unemployment rose, profits and labour incomes fell precipitately; businesses closed. Mortgaged residential properties were repossessed and sold. The economy entered into a long recession. The reversals and the associated deterioration of personal economic well-being were damaging to confidence and the national psyche.

“In hindsight, one could claim that the best use was not made of the opportunities presented by the first boom. Resource wastage was enormous. The challenge now is to do better; to make the best of the current boom. The outcome will turn upon the quality of management in government, in enterprises and in households,” said Professor Bourne.