Wednesday 11th October, 2006

 

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Selling T&T to Europe

Trade Minister Ken Valley addresses participants at Frankfurt business seminar.

By David Jessop

Soccer was the unlikely starting point for a just completed Trinidadian investment mission to Ireland, Spain, Germany, France and the United Kingdom.

While the outcome is of interest, more thought-provoking are the implications for the region of the republic’s strategic vision.

The footballing connection came, of course, from the international profile provided by the Soca Warriors during the recent football World Cup in Germany. It seems that the interest the team aroused, led to a decision in Port-of-Spain to capitalise by promoting the republic as a destination for investments in the planned high technology and the downstream industries that flow from Trinidad’s role as a major energy producer and financial centre.

The emphasis during the visit was on diversification. Presentations focused on opportunities in petrochemicals, food and beverages, film, music and entertainment, printing and packaging, yachting and the merchant marine as well as on fish and fish processing, pharmaceuticals and biotechnology, hotel development and information technology.

While it is always difficult to measure the success of such visits, Ken Valley, T&T’s Minister of Trade and Industry, who led the trade team, was by the end of the delegation’s European tour able to point to significant progress.

There was a bilateral investment treaty with Germany and the establishment of relationships in Spain that will lead to a more substantive Spanish diplomatic and business presence in Port-of-Spain. This is in line with Madrid’s decision to deepen its relations with the Anglophone Caribbean.

The minister was also able to point to the possible creation of a bilateral investment treaty with Ireland and a commitment for an Irish trade mission to visit in early 2007 to discuss investment opportunities.

The minister was also able to address the many hundreds of leading businessmen and women who attended events across Europe.

But in the longer term what may prove to be more important were the inferred messages the delegation as a whole were able to convey and the strategic implications these carry for much of the rest of the region.

The first was that Trinidad is unlike any other Caribbean nation. Even though it has just 1.3 million people, it is a major global player because of its gas and oil reserves and the stable investment relationships it has developed with some of the world’s major energy companies. As such it is taken very seriously indeed by governments and investors in Europe and elsewhere.

The second message is that Trinidad has a strategic vision. It is seeking economic integration with Latin America as an energy-based manufacturing and high technology hub. This future embraces its neighbours in the OECS states and Guyana and envisages the republic playing an ever greater role in their economic development, in part because of Trinidad’s limited human resource.

The third is that while its relationship with the US as its major supplier of liquefied natural gas remains, the relationship with Venezuela is set to develop if Caracas is able to reach an agreement with Port-of-Spain on the commercialisation of Venezuelan gas reserves.

Trinidad as an energy producer sees value in the decision by Venezuela’s President, Hugo Chavez, to create new global alliances with nations such as Iran if this rekindles US engagement with the hemisphere in a realistic and practical way that respects the diversity of markets and the national sovereignty of all.

Fourthly, Trinidad faces an acute human resources problem. While it will continue to place emphasis on encouraging nationals to return to participate in the vast array of new industries that it is promoting and will continue to focus on expanding its universities and tertiary education system, it simply does not have enough people.

The implication here is that a decision has to be made about how new industries can be developed. The challenge for the Government and the Trinidadian capital market is to finance production sharing operations in the Eastern Caribbean and Guyana in a manner that causes governments in the nations concerned, and perhaps more importantly their electorates, to feel comfortable.

The fifth is that in the area of trade policy. Trinidad continues to regard a free trade agreement with the US in the context of the moribund Free Trade Area of the Americas as essential but in the interim sees an asymmetrical Caricom-US free trade arrangement as desirable. This is not the way that others in the region see their priorities nor for that matter is it how a largely Caribbean-disinterested Washington sees future US relations with the region.

Sixthly, Trinidad’s well-capitalised and under-leveraged financial sector, through its commercial and merchant banks, has moved out across the Caribbean and into the international capital markets and is set to expand investment portfolios across the hemisphere. This suggests that the republic will not only continue to prosper but that Trinidad’s companies are set to become hemispheric and possibly even global players with a broad portfolio of assets.

And the seventh inferred message is that energy will continue to underwrite development and Trinidad’s government. The major energy companies have ongoing plans to drill for gas at ever greater depths in concessions they hold or are intending to acquire. They see themselves as long-term partners in the Trinidad economy and are confident of finding significantly more in the way of recoverable reserves.

They are doing so against a background of high energy prices that they see continuing into the foreseeable future.

Trinidad’s desire to be a developed economy, become the financial centre of the Greater Caribbean, enter into free trade agreements across the hemisphere and for its companies to acquire an ever increasing variety of assets suggest opportunities no other Caribbean nation has.

It implies that as the republic moves forward with its plans, great sensitivity will be required if the regional integration process is not to become unbalanced or seen to favour one nation’s development and interests over those of many others.

It also suggests the vital importance of trying to approximate levels of development between the region’s less developed and more developed economies through a properly applied regional development fund if the Caribbean Single Market and Economy (CSME) is not to be rent apart by economic imbalance.

Trinidad will soon be taking a similar mission to China, India and Japan. In Europe its confidence about its future, despite unspoken concerns about its internal security, was infectious.

This may not be an entirely comforting message in those parts of Caricom where inter-regional historic and cultural enmities endure.

David Jessop is the Director of the Caribbean Council and can be contacted at [email protected]

 

 

 

 

 

 

 

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