Wednesday 16th November, 2005

 

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T&T: Tiger of the Caribbean

T&T has often been described in the international business media as the “Tiger of the Caribbean,” and with good reason. Foreign direct investment more than doubled from an average of US$209 million over the period 1990-1993 to US$757 million between 2000 and 2003, an increase of roughly 262 per cent.

The bulk of this investment has been in the energy sector and downstream industries. Government fully recognises that energy is a non-renewable asset, hence the aggressive targeting of investments in the non-energy sector, in order to build a sustainable and diversified economy.

After Government, the non-energy sector is the second largest employer. Encouraging development and investment in the sector is not only good economic sense, it is also part of the holistic policy to achieve developed country status by 2020.

A concentric circle approach to development

By early 2006, the T&T economy will be fully integrated within the Caricom Single Market. Simultaneously, this country will be pursuing integration into the Latin American economy, through membership in the Association of Caribbean States (ACS). That market could then be used as a platform to enter the wider global economy, through membership in the Free Trade Area of the Americas and the ACP Group.

Concurrently, our free trade agreements with Costa Rica, Cuba, the Dominican Republic and Colombia allow prospective investors direct access to these markets.

At the heart of the hemisphere

Today, while T&T is a gateway to the Carib-bean and Latin America, Government’s vision is that, in time, we will become the hub of the Americas. Hence the focus on certain key initiatives over the past couple of years, namely:

Positioning T&T as the major manufacturing, transshipment, business and commercial platform in the region.

Integrating this country into the wider Latin American economy.

Creating expanded market access opportunities through strategic trade agreements.

Refocusing the Eximbank to support manufacturing sales to the region.

Facilitating the process for citizens to increase their ability to communicate in the Spanish language.

The intention is to maximise our ideal geographic position between North, Central and South America, along the middle Atlantic stretch, to become the nexus for investment, finance, manufacturing and transshipment.

T&T is a convenient midway point to everywhere in this hemisphere. Well-served by major airlines, with two large, secure deep-water harbours, the country is poised to enhance its role in international shipping, building on the experiences gained in handling specialised cargo.

Through managing the requirements of transporting products such as LNG, T&T has developed a cadre of personnel well versed in applying the most exacting standards of the shipping industry, and is now creating the appropriate infrastructure to complement these developments—for example, through the programmes offered at the University of T&T’s Maritime Institute.

The world is our marketplace

“Make the world our marketplace” is the philosophical underpinning of all recent trade and economic policies. Government is developing new industrial complexes through the north-south corridor that stretches along the west coast of the country, while at the same time pursuing critical air transport links with the South/ South Route Development initiative.

The flagship industrial development is the Wallerfield Business and Technology Park, envisioned as a nexus for technology-driven business, research and development, and academic achievement. It will also serve as the campus for the UTT.

Putting the right legislation in place and upgrading existing trade and business laws will also be crucial to this country’s continued economic success. In this regard, Government is seeking to improve the operations of the Customs and Excise Division, the Bureau of Standards and other critical regulatory agencies to sustain the proper environment for trade to flourish.

Meanwhile, the Prime Minister’s Standing Committee on Business Development is co-ordinating the development of strategic plans for targeted sectors, where a level of competitive advantage already exists, along with a strong human and capital resource base.

And while all of this is underway, the initiative to make Spanish the first foreign language of T&T will have as its ultimate goal designated sectors of the community capable of communicating effectively in both English and Spanish by 2020, providing investors with a human resource base capable of transacting business in the two major languages of the region.

Becoming more investment-friendly

In the final analysis, being a hub for business and commercial activity is not just about physical location. It also involves a particular frame of mind, sensitivity to clients in different locations, and a commitment to meeting and exceeding their needs.

Government is working to create the kind of environment that is good for business—whether it be a local firm, a foreign-based Trinidadian firm or a foreign investor. Investment is a crucial mechanism which can help us maximise our potential and achieve our developmental goals.

Therefore, in order to be successful, our investment initiatives must focus on creating an investment-friendly environment and effective promotion strategies. This is the basis for the draft investment policy currently being prepared by the Ministry of Trade and Industry for submission to Cabinet.

The specific initiatives in this policy include:

Upgrading investment incentives.

Removing disincentives to investment.

Reforming the investment approval process taking into consideration the need for increased transparency, simplicity and efficiency.

This country has also signed a number of double taxation treaties with other countries, including the US, Canada, the UK and Germany, as well as investment protection and promotion agreements with the UK, the US, Canada, Spain, the People’s Republic of China and the Republic of Korea.

The big pay-off

By year-end 2004, T&T’s economy had expanded by over six per cent, a creditable achievement, given the difficulties that were being experienced in some major markets such as the US and Caricom.

It seems that T&T has gotten the formula for economic success right:

Relatively low inflation.

A stable exchange rate.

An educated and competent workforce.

A strong and relatively diversified manufacturing base.

A stable government and transparent governance policies.

It is quite an achievement for a tiny twin-island state. As Trade and Industry Minister Ken Valley puts it: “This is an exciting time in the history of Trinidad and Tobago. We are on a growth trajectory, and can truly say that we have the ability, drive, understanding and resources to plan and design our nation’s economic future.”

 

 

 

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