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Vol.19 No.1 – March 2019<br />

The Voice of Business in Trinidad & ToBago<br />

Aldwyn wAyne of wiPAy<br />

BOLD<br />

RoAnnA MARAJ of SHUPHUB<br />

NEW<br />

JeAn-MARC AiMey of SUn TiXX<br />

ECONOMY<br />

Future of oil & gas | Business environment for growth<br />

Resilient manufacturing | Attracting investment


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Vol.19 No.1 – March 2019<br />

Contents<br />

Editor’s note 7<br />

Natalie Dookie introduces this issue of CONTACT<br />

The future of fossil fuels 8<br />

Energy strategist Anthony Paul explores the future of oil<br />

<strong>and</strong> gas, taking us from challenges to opportunities<br />

The economic outlook 44<br />

Prospects for Trinidad <strong>and</strong> Tobago, the Caribbean,<br />

<strong>and</strong> the global economy in the year ahead<br />

Energy update 46<br />

The state of the energy sector in figures<br />

Special CONTACT Survey:<br />

Blueprint for a bold new economy<br />

Welcome to new members 48<br />

The Chamber extends a warm greeting to members<br />

who have recently joined<br />

An inconvenient truth 14<br />

In an economy lacking growth, Hayden Blades suggests<br />

how we can create an enabling business environment for<br />

long-term sustainable development <strong>and</strong> prosperity<br />

Selling our services 18<br />

The Trinidad <strong>and</strong> Tobago Coalition of Services Industries<br />

has a road map for going global. Learn about their new<br />

national exporters’ services registry <strong>and</strong> internationalisation<br />

initiatives<br />

Where are all the tourists? 23<br />

The T&T tourism success story is still waiting to happen.<br />

John Bell looks at the S<strong>and</strong>als saga <strong>and</strong> lessons to be learnt.<br />

How can we save the sector?<br />

Manufacturing the future 26<br />

According to the Trinidad & Tobago Manufacturers’<br />

Association, there is still much to be done in order<br />

to create a more resilient sector geared for success<br />

Empowering our artists 28<br />

Keith Nurse <strong>and</strong> Alicia Shepherd make the case for greater<br />

investment in the creative/cultural sector<br />

Towards a renaissance of agriculture 32<br />

How prepared is our agriculture sector for climate change?<br />

Steve Maximay guides us on how to re-align the sector<br />

The challenge of renewable energy 36<br />

Dr Zaffar Khan <strong>and</strong> Atiyyah A. Khan discuss the challenge<br />

of maximising renewable energy <strong>and</strong> increasing energy<br />

efficiency in T&T<br />

Attracting the investor 40<br />

InvesTT tells Joel Henry about its success stories <strong>and</strong> how<br />

it is engaging with the diaspora<br />

On the cover:<br />

Aldwyn Wayne, Chief Executive<br />

Officer, WiPay (Trinidad <strong>and</strong> Tobago)<br />

Limited; Roanna Maraj, Managing<br />

Director, Keystone Designs Limited/<br />

ShupHub; <strong>and</strong> Jean-Marc Aimey,<br />

Chief Executive Officer, Sun Tixx<br />

Caribbean Limited<br />

(Photos by: Dos Imagery)<br />

4 MARCH 2019 CHAMBER.ORG.TT


The voice of business in Trinidad & Tobago<br />

Published by<br />

The Trinidad <strong>and</strong> Tobago Chamber<br />

of Industry <strong>and</strong> Commerce<br />

Columbus Circle, Westmoorings, Port of Spain, Trinidad <strong>and</strong> Tobago<br />

PO Box 499, Port of Spain • Tel: (868) 637-6966 • Fax: (868) 622-4475<br />

Email: chamber@chamber.org.tt • Website: www.chamber.org.tt<br />

Tobago Division:<br />

ANSA McAL Building, Milford Road, Scarborough, Tobago<br />

Tel: (868) 639-2669 • Fax: (868) 639-2669<br />

Email: tobagochamber@chamber.org.tt<br />

Produced for the Chamber by<br />

MEP Publishers (Media & Editorial Projects Ltd)<br />

6 Prospect Avenue, Maraval, Port of Spain, Trinidad <strong>and</strong> Tobago<br />

Tel: 622-3821 • Fax: 628-0639<br />

Email: info@meppublishers.com • Website: www.meppublishers.com<br />

Editor<br />

Online editor<br />

General manager<br />

Page layout & design<br />

Advertising<br />

Production<br />

Editorial assistant<br />

Natalie Dookie<br />

Caroline Taylor<br />

Halcyon Salazar<br />

Kriston Chen<br />

Evelyn Chung, Tracy Farrag,<br />

Mark-Jason Ramesar<br />

Jacqueline Smith<br />

Shelly-Ann Inniss<br />

DISCLAIMER<br />

Opinions expressed in <strong>Contact</strong> are those of the authors, <strong>and</strong><br />

not necessarily of the Trinidad <strong>and</strong> Tobago Chamber of Industry<br />

<strong>and</strong> Commerce or its partners or associates.<br />

COURTESY CHRISTINA MORELLO / PEXELS.COM<br />

CONTACT is published quarterly by the Trinidad <strong>and</strong> Tobago Chamber of<br />

Industry <strong>and</strong> Commerce (TTCIC). It is available online at www.chamber.org.tt/<br />

media/the-contact-business-magazine. ©2019 TTCIC. All rights reserved. No part<br />

of this magazine may be reproduced in any form without the written permission<br />

of the publisher.<br />

CHAMBER.ORG.TT


COURTESY INVESTT<br />

6 MARCH 2019 CHAMBER.ORG.TT


Editor’s Note<br />

Editor’s note<br />

In this issue of CONTACT, we have<br />

assembled a team of experts to build<br />

a Blueprint for a Bold New Economy<br />

Trinidad <strong>and</strong> Tobago’s energy sector is expected to have contributed 36.1%<br />

to GDP in 2018, in stark contrast to the highs of 50% <strong>and</strong> more in past<br />

decades. Economic growth in 2018 is projected to reach 1.9%. In the face of<br />

these sobering statistics, coupled with volatile global oil prices <strong>and</strong> depleting<br />

resources, there is a lot of uncertainty regarding our future.<br />

Economic diversification of the energy <strong>and</strong> non-energy sectors must<br />

therefore become a priority, especially as the process can take decades before<br />

it brings real change to the bottom line.<br />

Does Trinidad <strong>and</strong> Tobago have enough time to transform its economy<br />

before oil <strong>and</strong> gas run out, <strong>and</strong> what path should it take? In this issue of<br />

CONTACT, we have assembled a team of experts to build a Blueprint for a<br />

Bold New Economy.<br />

We begin by examining how to maximise our remaining resources <strong>and</strong><br />

enhance the energy services sector for export. Next, we develop a business<br />

environment geared for economic growth.<br />

We look at how to further champion the services sector, already a strong<br />

contributor to GDP, <strong>and</strong> include a detailed review of the challenges <strong>and</strong> solutions<br />

for tourism.<br />

Manufacturing has many cross-sector linkages, <strong>and</strong> making it more resilient<br />

is critical to our future. And what about new sectors – does the creative<br />

industry present an opportunity?<br />

How will we achieve food security <strong>and</strong> counter the effects of climate<br />

change? We tackle these issues alongside improving energy efficiency <strong>and</strong><br />

exploring renewable energy. Investment will be needed in all of these sectors –<br />

InvesTT tells us how to attract this.<br />

We look forward to your feedback on this packed issue: let us know if<br />

you agree with what our experts say.<br />

Natalie Dookie, Editor<br />

On the cover<br />

Technology is already transforming every sector of our economy, <strong>and</strong> it will play a key<br />

role in diversification efforts, creating new industries <strong>and</strong> opportunities for solutionoriented<br />

entrepreneurs. On the cover, we feature three <strong>final</strong>ists in the Trinidad <strong>and</strong><br />

Tobago Chamber of Industry <strong>and</strong> Commerce’s Business Technology Award 2018.<br />

WiPay has removed a significant barrier for online payments, offering great benefits for<br />

small- <strong>and</strong> medium-sized enterprises. Its free platform can be integrated into any merchant’s<br />

website to facilitate credit card payments. In 2016, WiPay also introduced its Top-Up Service,<br />

a form of digital cash, which offers financial inclusion for the unbanked or under-banked. It<br />

is now the number one online payment platform in the Caribbean.<br />

ShupHub.com is an e-commerce platform that brings together vendors <strong>and</strong> customers. Prior<br />

to its launch, there were hardly any portals available locally for vendors to distribute their<br />

goods <strong>and</strong> services online. Entrepreneurs will no longer need brick <strong>and</strong> mortar stores as<br />

this online platform allows them to market products throughout the Caribbean – this year,<br />

Shuphub’s service will be available in every Caricom territory.<br />

Sun Tixx provides a technology-driven service which manages the generation, distribution<br />

<strong>and</strong> sale of tickets for events. It uses secure ticketing <strong>and</strong> access control technology, making<br />

it easier for patrons to collect tickets <strong>and</strong> for event hosts to collect payments. Sun Tixx<br />

has exp<strong>and</strong>ed into St Lucia, St Vincent, Grenada <strong>and</strong> Barbados, becoming the largest ticket<br />

distribution network provider in the Caribbean.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 7


Energy<br />

COURTESY PIXABAY.COM<br />

8 MARCH 2019 CHAMBER.ORG.TT


Energy<br />

The future<br />

of fossil fuels<br />

Trinidad <strong>and</strong> Tobago’s energy industry is more than a century old,<br />

<strong>and</strong> the country depends heavily on it for revenue. It will still have<br />

its place in the future economy, especially if its current constraints<br />

are addressed<br />

by Anthony Paul<br />

Principal Energy & Strategy Consultant,<br />

Association of Caribbean Energy Specialists Limited<br />

None of these factors suggests<br />

that the global life of oil <strong>and</strong> gas<br />

will be over in the next 50 years<br />

At government’s stated<br />

sustainable production levels<br />

of 4.2 billion cubic feet per<br />

day, new reserves may be able<br />

to support existing plants for<br />

decades to come<br />

To paraphrase Mark Twain: “The rumours of the death of oil are greatly<br />

exaggerated.”<br />

Outlooks for the global energy mix over the next 20 to 30 years, from<br />

major international oil <strong>and</strong> gas companies like BP, Equinor (formerly Statoil),<br />

ExxonMobil, Shell <strong>and</strong> Total, as well as consultancies, research institutions <strong>and</strong><br />

the International Energy Agency, all point to a future where energy dem<strong>and</strong><br />

grows, <strong>and</strong> the greatest increase in market share is taken by renewables.<br />

Interestingly, in that same timeframe, while the share of oil <strong>and</strong> gas<br />

declines, actual dem<strong>and</strong> for both is predicted to grow under current global<br />

policy scenarios, with gas replacing oil as an energy source to reduce harmful<br />

effects on the environment.<br />

As technology advances rapidly on many fronts, it makes renewables more<br />

efficient <strong>and</strong> competitive, <strong>and</strong> the discovery <strong>and</strong> production of more oil <strong>and</strong> gas<br />

easier; it also reduces the impact of fossil fuels on the environment.<br />

These factors point to a dynamic range of scenarios, none of which suggests<br />

that the global life of oil <strong>and</strong> gas will be over in the next 50 years. There is still<br />

enough time to invest <strong>and</strong> benefit.<br />

Maximising our remaining resources<br />

But what about Trinidad <strong>and</strong> Tobago? How long does our industry have again?<br />

The Ministry of Energy <strong>and</strong> Energy Industries uses its annual Scott-Ryder<br />

audit to better underst<strong>and</strong> the energy industry’s growth. This approach is an<br />

unnecessary public expenditure, as exploration companies are required to do<br />

the same, <strong>and</strong> the ministry has the authority to dictate how this is done so that<br />

it meets their requirements.<br />

Further, the approach taken grossly understates the potential of our already<br />

discovered fields <strong>and</strong> geological basins, dissuading investment in exploration<br />

<strong>and</strong> indigenous research <strong>and</strong> development. The reserves audit has limited scope,<br />

relative to the potential of the basins.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 9


Blueprint for a Bold New Economy<br />

Oil <strong>and</strong> gas exploration <strong>and</strong> production opportunities<br />

10<br />

1. North Coast Marine Area: gas fields, deep water<br />

2. Northern Gulf of Paria / Northern Basin:<br />

small oil & gas fields, sub-anhydrite imaging<br />

3. Southern Gulf of Paria:<br />

enhanced imaging, deep drilling/older horizons, heavy oil, enhanced<br />

recovery, deeper <strong>and</strong> older (incl. cretaceous) prospects, stratigraphic plays<br />

4. Offshore South Coast:<br />

small gas & oil, enhanced imaging, cretaceous shelf edge<br />

5. Southern Basin:<br />

deeper <strong>and</strong> older (cretaceous) prospects, stripper fields, oil s<strong>and</strong>s,<br />

enhanced recovery, 3D seismic for new projects, field extensions,<br />

stratigraphic plays<br />

6. Central Range Thrust Belt<br />

7. East Coast Shelf:<br />

deep drilling, small & medium sized gas fields,<br />

JV/farm-ins, enhanced recovery, shallow gas<br />

imaging challenges, possible participation in<br />

Venezuelan border fields, infrastructure-led E&P<br />

8. East Coast Slope:<br />

deep water, underexplored, adjacent to existing production<br />

& infrastructure (EC Slope)<br />

9. Ultra Deep Water, East Coast:<br />

oil - structural & stratigraphic traps (reservoir<br />

modelling & petroleum system research needed),<br />

natural gas/small field challenge, gas hydrates<br />

10. Tobago Trough:<br />

deep water, underexplored, continuation<br />

of C. Range/Angostura trend<br />

2<br />

3<br />

1<br />

4<br />

6<br />

5<br />

7<br />

8<br />

9<br />

Source: Association of Caribbean Energy Specialists Limited<br />

Fig. 1: Across multiple geological basins, Trinidad <strong>and</strong> Tobago still has a wide range of oil <strong>and</strong> gas exploration development <strong>and</strong> production opportunities.<br />

That said, in October 2018 the ministry announced that,<br />

according to the most recent audit, for the first time since<br />

2004 reserves had grown, with 154% replacement of<br />

reserves produced in 2017.<br />

This was welcome news, but Trinidad <strong>and</strong> Tobago<br />

still needs to take urgent steps to maximise its remaining<br />

energy resources, alongside investing capital to fund<br />

economic diversification.<br />

Aside from new exploration in deepwater acreage,<br />

Figure 1 shows other areas where oil <strong>and</strong> gas can be found<br />

including onshore, the Gulf of Paria, <strong>and</strong> shallow water off<br />

the north, east, <strong>and</strong> south coasts.<br />

The use of new technologies, field depletion policies<br />

consistent with national interests <strong>and</strong> industry best<br />

practice, suitable investors <strong>and</strong>/or commercial models,<br />

can enable production from small fields, lower pressured<br />

reservoirs, tight reservoirs, deeper older formations <strong>and</strong><br />

trapping types, <strong>and</strong> heavy oil.<br />

In addition, by applying the phenomenon known as<br />

“creaming curve”, whereby oil <strong>and</strong> gas basins typically<br />

contain as much reserves in multiple small fields as<br />

they do in the few large ones, basin development would<br />

translate into over 50tcf in smaller pools, given currently<br />

producing fields.<br />

In a mature gas market like ours, small fields can be<br />

commercialised as their development is not burdened by<br />

the need to invest in pipelines <strong>and</strong> other infrastructure,<br />

or to guarantee the long-term supply needed to satisfy<br />

financing requirements for new plants.<br />

Given that our gas processing plants have mostly been<br />

paid off <strong>and</strong> are still relatively very efficient, they can<br />

compete with new plants in global markets, even with<br />

higher prices.<br />

Because our resources are mostly onshore <strong>and</strong> in<br />

shallow waters, they can provide opportunities for local<br />

investors, contractors <strong>and</strong> suppliers to participate, <strong>and</strong> for<br />

the government to give incentives for investment that can<br />

be translated into benefits to the economy via increased<br />

local revenue flows, taxes <strong>and</strong> employment.<br />

Indigenous supplies aside, development <strong>and</strong> exploration<br />

opportunities on the Venezuelan side of our borders<br />

can provide potential inputs for refining at Pointe-à-Pierre<br />

<strong>and</strong> Point Lisas, at costs lower than most other options<br />

– though geopolitics <strong>and</strong> uncertainty over the refinery<br />

present immediate challenges.<br />

Implementing these initiatives can bring tens of<br />

trillions of cubic feet to market. At the government’s stated<br />

sustainable production levels of 4.2 billion cubic feet per<br />

day of gas, new reserves may be able to support existing<br />

plants for decades to come.<br />

Positive developments taking place in Guyana <strong>and</strong><br />

Suriname also present opportunities for the local sector to<br />

provide assistance in developing indigenous capabilities<br />

in services, skills enhancement, infrastructure <strong>and</strong> natural<br />

gas industries.<br />

Enhancing energy services for export<br />

How do we maximise our remaining resources, while ensuring<br />

the growth <strong>and</strong> development of domestic firms?<br />

As local reserves become depleted, the energy services<br />

sector will take on even greater importance. Enhancing<br />

competitiveness <strong>and</strong> investing in capacity development of<br />

10 MARCH 2019 CHAMBER.ORG.TT


Energy<br />

fabrication<br />

engineering &<br />

construction<br />

UPSTREAM ACTIVITIES<br />

subsurface<br />

services<br />

logistics-boats rigs/wells maintenance<br />

$ upstream spend<br />

job creation<br />

potential<br />

cyclical nature<br />

CHARACTERISTICS<br />

gas/oil price<br />

sensitivity<br />

value-added skill<br />

content<br />

innovation<br />

potential<br />

technology<br />

potential<br />

knowledge<br />

transferability<br />

non-energy<br />

transferability<br />

jv attractiveness<br />

High sustainability sectors High impact sectors High Moderate Low<br />

Fig. 2: Multiple areas have been identified for local content to support diversification. (Source: Association of Caribbean Energy Specialists Limited)<br />

local firms will be fundamental to improving their export<br />

capability.<br />

Although we have a robust local content policy <strong>and</strong><br />

supporting regulations, foreign individuals <strong>and</strong> companies<br />

are often brought in to do work for which locals are <strong>full</strong>y<br />

capable <strong>and</strong> qualified. Other work that can <strong>and</strong> should be<br />

done here is sent overseas, thus facilitating revenue leakage,<br />

transfer pricing, <strong>and</strong> tax avoidance.<br />

The Trinidad <strong>and</strong> Tobago Local Content Policy of 2004<br />

identified areas in the oil <strong>and</strong> gas sector that had significant<br />

projected dem<strong>and</strong> <strong>and</strong> could support the competitiveness<br />

of local companies, encouraging them to export their<br />

services, while contributing to diversification efforts.<br />

Work that can <strong>and</strong> should be done<br />

here is sent overseas, facilitating<br />

revenue leakage, transfer pricing,<br />

<strong>and</strong> tax avoidance<br />

Areas such as big data management, seismic processing,<br />

design engineering <strong>and</strong> fabrication were identified as<br />

opportunities, <strong>and</strong> were pursued to the extent that several<br />

international firms set up operations locally, some serving<br />

foreign-based clients while partnering with locals.<br />

Unfortunately, this initiative found itself on a collision<br />

course with the decision to engage Chinese contractors at<br />

the expense of local industry. The oil <strong>and</strong> gas local content<br />

policy was quarantined as a consequence, <strong>and</strong> the affected<br />

companies folded up.<br />

Policy decisions favouring mega-projects <strong>and</strong> foreign<br />

investment, preventing access to natural gas <strong>and</strong> gas-derived<br />

products, resulted in the door being shut on locals<br />

wanting to invest downstream in small plants to convert<br />

methanol <strong>and</strong> syngas by manufacturing, <strong>and</strong> small-scale<br />

LNG for export to regional markets.<br />

Figure 2 demonstrates how investment in high<br />

sustainability <strong>and</strong> high impact energy services can<br />

contribute to job creation <strong>and</strong> knowledge transfer.<br />

Improving administration <strong>and</strong> tax collection<br />

Aside from the direct impact on the economy <strong>and</strong> business,<br />

the energy sector traditionally provided the biggest share<br />

of government revenue <strong>and</strong> foreign exchange, until recent<br />

times. As highlighted at the Ministry of Energy <strong>and</strong> Energy<br />

Industries March 2018 “Spotlight on Energy”, failures in<br />

government taxation policy <strong>and</strong> tax collection resulted in<br />

over TT$120 billion of uncollected taxes.<br />

This tax avoidance was facilitated by weak regulatory<br />

capacity <strong>and</strong> governance systems. Recent assurances by<br />

the government that they are going after this, supported by<br />

bold, if long overdue, measures to institute a transparent<br />

<strong>and</strong> consistent royalty regime, will result in much more<br />

foreign exchange being available to the domestic economy.<br />

While these developments are encouraging, they do<br />

not do nearly enough to address the core issue that has<br />

plagued the industry <strong>and</strong> led to its slide. A woe<strong>full</strong>y underresourced<br />

<strong>and</strong> opaque Ministry of Energy <strong>and</strong> Energy<br />

Industries, lacking in self-confidence, denuded of authority<br />

<strong>and</strong> perpetually avoiding the legal strictures in place to<br />

CHAMBER.ORG.TT<br />

MARCH 2019 11


Blueprint for a Bold New Economy<br />

Fig. 3: Recommended measures to increase activities, production <strong>and</strong> revenue in the T&T oil <strong>and</strong> gas sector.<br />

➤ Good governance<br />

• Clear, consistently applied policies<br />

• Enhanced institutional capacity<br />

i. Technical<br />

ii. Commercial (incl. negotiating)<br />

iii. Technology<br />

iv. Funding<br />

• Transparency & accountability, as prescribed by the<br />

Petroleum Act & Regulations<br />

• Enlightened tax regime – close loopholes<br />

• Industry st<strong>and</strong>ard procurement processes<br />

- Simple, predictable, transparent<br />

- Easy analysis <strong>and</strong> decision-making<br />

- Quick response<br />

➤ Clear exploration & depletion strategies<br />

• Resource management<br />

• Contract/licence management<br />

• Improved data availability<br />

➤ Indigenous R&D<br />

(T&T Ministry of Energy & Energy Industries has an R&D<br />

Fund in excess of TT$100 Million, that has not been used!)<br />

➤ Clear <strong>and</strong> consistently applied national priorities<br />

• Well defined expectations<br />

➤ Local Content & value addition<br />

• Access to product for value addition<br />

➤ Clear <strong>and</strong> transparent investor selection<br />

& partnering strategies<br />

➤ Rule of law<br />

Source: Association of Caribbean Energy Specialists Limited<br />

ensure it conducts its role in a transparent manner, must<br />

be fixed.<br />

With 100% excess power generating capacity fired by<br />

natural gas, the road to renewables is a policy minefield.<br />

Unless we are willing to think differently, make bold<br />

decisions <strong>and</strong> act decisively, we shall lose that battle. Ideas<br />

like selling electricity to industries in eastern Venezuela, or<br />

limiting CNG to just fleet vehicles <strong>and</strong> focusing instead on<br />

electric <strong>and</strong> hybrid vehicles for most other forms of private<br />

transport, should be explored.<br />

The way forward<br />

Implementation of the key measures in Figure 3 will<br />

ensure that Trinidad <strong>and</strong> Tobago’s oil <strong>and</strong> gas sector gets<br />

back onto a healthy growth path, <strong>and</strong> will provide the<br />

stimulus to diversifying the rest of the economy which we<br />

so desperately need.<br />

The Petrotrin situation brought the<br />

sector into the sharp glare of public<br />

scrutiny as nothing else has done for<br />

a long time<br />

Ongoing negotiations for contract extensions locally<br />

will allow government to leverage beneficiary clauses in<br />

existing agreements, such as the return of all assets to the<br />

state at the end of a contract’s life.<br />

We can also learn from Azerbaijan, where BP,<br />

ExxonMobil <strong>and</strong> partners recently paid US$3.2 billion<br />

into the Sovereign Wealth Fund in order to be allowed to<br />

continue exploiting producing fields.<br />

Service companies are required to be licensed <strong>and</strong><br />

registered, <strong>and</strong> to pay taxes in Trinidad <strong>and</strong> Tobago. That<br />

is not happening reliably, so billions of dollars in profits<br />

have been untaxed. We need a stronger rule of law which<br />

enforces these regulations more effectively.<br />

In Azerbaijan, BP, ExxonMobil <strong>and</strong><br />

partners recently paid US$3.2 billion<br />

into the Sovereign Wealth Fund, in<br />

order to be allowed to continue<br />

exploiting producing fields<br />

The Petrotrin situation brought the energy sector into the<br />

sharp glare of public scrutiny as nothing else has done for<br />

a long time. Decision-making without public consultation,<br />

when dealing with state assets, involves risk, if any lessons<br />

are to be learnt here.<br />

For further reading<br />

Oil to Gas <strong>and</strong> Beyond – A Review of the Trinidad <strong>and</strong> Tobago Model <strong>and</strong><br />

Analysis of Future Challenges. Editors Trevor M. Boopsingh <strong>and</strong> Gregory Mc-<br />

Guire. University Press of America, 2014. See Chapter 7 (“Future Hydrocarbon<br />

Resources”) <strong>and</strong> Chapter 13 (“Taking Trinidad & Tobago Forward & Abroad –<br />

The Technical Challenges”).<br />

12 MARCH 2019 CHAMBER.ORG.TT


KEVIN SAMMY


Blueprint for a Bold New Economy<br />

An inconvenient truth<br />

Trinidad <strong>and</strong> Tobago’s commodity-based economy is heavily<br />

reliant on global market prices, <strong>and</strong> continually caught in a<br />

cycle of boom <strong>and</strong> bust. What structural adjustment is needed<br />

to avoid future volatility?<br />

by Hayden Blades<br />

President, Business Insight Limited<br />

In Trinidad <strong>and</strong> Tobago, clarity regarding national objectives which define<br />

the way forward in a rapidly evolving global economic environment has all<br />

but escaped political <strong>and</strong> public discourse.<br />

Sensible macro-economic management in small open economies such as<br />

ours must achieve the following outcomes for long-term survival:<br />

• sustainable growth<br />

• general price stability<br />

• socially acceptable income distribution patterns<br />

• investor <strong>and</strong> consumer confidence.<br />

Trinidad <strong>and</strong> Tobago is a small,<br />

open, resource-rich economy with<br />

a narrow productive base<br />

The economy is subject to the extremes<br />

of a boom-bust-recovery-boom cycle<br />

In the absence of adequate economic<br />

growth, it is inevitable that unemployment<br />

will rise in Trinidad <strong>and</strong> Tobago<br />

Trinidad <strong>and</strong> Tobago is a small, open <strong>and</strong> resource-rich economy. Its narrow<br />

productive base is dominated by global market prices <strong>and</strong> the domestic output<br />

of its key export commodities – oil, gas <strong>and</strong> petrochemicals. This economic<br />

structure lacks diversification, <strong>and</strong> has fostered income, employment <strong>and</strong><br />

inflation patterns that are closely correlated with the global market prices of<br />

carbon-based commodities.<br />

The economy has suffered from generally declining output levels in its<br />

dominant energy sector, further exacerbating the volatility of key economic<br />

aggregates such as real GDP growth, international reserves, public debt <strong>and</strong><br />

sustainable employment levels. It is an economy subject to the extremes of a<br />

boom-bust-recovery-boom business cycle.<br />

Current economic assessment<br />

The inconvenient truth is that Trinidad <strong>and</strong> Tobago has not been proactive in<br />

structurally adjusting its energy-dependent economy to minimise volatility after<br />

more than 56 years of independence.<br />

Furthermore, the fiscal space does not easily accommodate necessary <strong>and</strong><br />

sufficient public sector investment. Technological, knowledge-based industries,<br />

<strong>and</strong> arts, culture <strong>and</strong> entertainment industries, which all represent drivers of<br />

youth employment, are still in their infancy.<br />

An economy lacking growth<br />

In the absence of adequate economic growth, it is inevitable that unemployment<br />

will rise in Trinidad <strong>and</strong> Tobago, <strong>and</strong> this will be exacerbated if such conditions<br />

are prolonged. A further complication is the absence of a strong growth impetus<br />

from the energy sector; based on current output <strong>and</strong> price trends it is not<br />

expected to provide the growth stimulus it did in the recent past.<br />

With Trinidad <strong>and</strong> Tobago’s growth rate expected to creep to 2.13% by 2021<br />

(see graphic), restoration of economic growth ought to be the most important<br />

14 MARCH 2019 CHAMBER.ORG.TT


Business Environment<br />

pillar of any future fiscal package, with the role of the non-energy sector taking<br />

on even greater importance in stabilising <strong>and</strong> growing the economy. Currently,<br />

government is intensely focused on recovery of output in the energy sector,<br />

with some success, though the volatility of global market prices will create a<br />

significant headwind in this regard.<br />

Trinidad <strong>and</strong> Tobago: Growth rate of real gross domestic product (GDP)<br />

from 2012-2022 (compared to the previous year)<br />

2.7%<br />

1.71%<br />

1% 0.88%<br />

1.56%<br />

2.13%<br />

1.24%<br />

2012 2022<br />

-1.75%<br />

-1.19%<br />

-2.6%<br />

-6.08%<br />

Source: ©Statista 2019 – The Statistics Portal<br />

The intensity of government’s focus on the recovery of the energy sector<br />

must be replicated across the non-energy sector. The creation of an enabling<br />

environment that facilitates new <strong>and</strong> sustainable growth within the non-energy<br />

sector is therefore critical if we are to avoid:<br />

• persistent fiscal deficits <strong>and</strong> rising public debt<br />

• persistent balance of payment deficits <strong>and</strong> a weakened TT dollar<br />

• increasing rates of unemployment<br />

• low investor <strong>and</strong> consumer confidence<br />

• an economy perpetually confined to zero to low growth outcomes<br />

• lost generations of young citizens.<br />

Trinidad <strong>and</strong> Tobago’s economy comprises four critical sectors: energy,<br />

services, manufacturing <strong>and</strong> agriculture. Of these, services <strong>and</strong> energy have<br />

been the major contributors to Gross Domestic Product (GDP).<br />

In 2008, Trinidad <strong>and</strong> Tobago had an estimated GDP (at constant 2000<br />

prices) of TT$93,024.5 million, with the services <strong>and</strong> energy sector accounting<br />

for 51% <strong>and</strong> 40.3% of GDP respectively. The manufacturing <strong>and</strong> agriculture<br />

sectors contributed 8.4% <strong>and</strong> 0.5% to GDP. Since then, the economy has<br />

contracted <strong>and</strong> there have been adverse changes to its GDP composition.<br />

The creation of an enabling<br />

environment that facilitates<br />

new <strong>and</strong> sustainable growth<br />

within the non-energy sector is<br />

therefore critical<br />

The way forward<br />

Our services sector is robust <strong>and</strong> diverse, with each sub-sector contributing<br />

significantly to GDP. Although labour-intensive <strong>and</strong> a small contributor, the<br />

agriculture sector possesses significant opportunities for new growth <strong>and</strong><br />

employment creation. Stimulating rapid agricultural growth will provide the<br />

opportunity to reduce our food import bill <strong>and</strong> create greater domestic price<br />

stability.<br />

Other sectors which hold prospects for new growth in new markets are<br />

manufacturing <strong>and</strong> tourism. However, the key to attaining sustainability, price<br />

stability, acceptable income distribution <strong>and</strong> market confidence will be the<br />

services sector, which can then support employment creation <strong>and</strong> growth in<br />

agriculture <strong>and</strong> manufacturing.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 15


COURTESY FRANK MCKENNA / UNSPLASH.COM<br />

While agriculture, manufacturing <strong>and</strong> services can provide new<br />

platforms for economic growth <strong>and</strong> employment creation, this will<br />

require implementation of the appropriate policy framework<br />

FX-eating imports or FX-earning exports?<br />

Based on these characteristics, several national strategic<br />

issues come into focus:<br />

• What aspects of the services sector are exportable? How<br />

can these sub-sectors become more competitive, <strong>and</strong> do<br />

we have access to key markets, traditional <strong>and</strong> nontraditional?<br />

• How can the services sector be positioned to enhance<br />

growth in agriculture <strong>and</strong> manufacturing?<br />

• If sustainable job creation is predominantly located in<br />

the services sector, then what type of services <strong>and</strong> service<br />

providers should we develop?<br />

• Can we wean the exportable components of the services<br />

sector off state funding <strong>and</strong> thus create a cadre of competitive<br />

service providers who will strategically seek out<br />

export markets as part of well-crafted growth strategies?<br />

• Are we getting value for money from the services sector,<br />

both public <strong>and</strong> private, <strong>and</strong> is there a need to revisit<br />

the way in which we organise the production of services<br />

<strong>and</strong> manage service quality <strong>and</strong> consistency?<br />

Implementation deficit<br />

To avoid or minimise the implementation deficit, government<br />

must explicitly address these new sources of economic<br />

growth, even as we continue to diversify the energy sector<br />

<strong>and</strong> create higher value-added exports.<br />

This can be achieved through the establishment<br />

of tripartite sector working committees, supported by<br />

permanent secretaries. The output of these committees<br />

should be a list of short- <strong>and</strong> medium-term development<br />

strategies, to be adopted as government policy for execution<br />

by ministries.<br />

These working committees can include institutions such as:<br />

• the Caribbean Industrial Research Institute (CARIRI)<br />

• exportTT<br />

• business stakeholders such as Chambers of Commerce<br />

• Eximbank<br />

• the Bankers’ Association of Trinidad & Tobago<br />

• labour stakeholders<br />

• the tertiary sector<br />

• an industrial park operator<br />

• the Ministry of Trade <strong>and</strong> Industry.<br />

The creation of an enabling environment for growth<br />

<strong>and</strong> development of the non-energy sector ought to be<br />

prioritised as we seek to enhance competitiveness in<br />

traditional <strong>and</strong> non-traditional export markets. This<br />

enabling environment should address:<br />

• development of appropriate labour force skills<br />

• provision of funding for business growth <strong>and</strong><br />

development (predominantly exportable sectors)<br />

• enhancing critical infrastructure<br />

• provision of key business support services.<br />

While agriculture, manufacturing <strong>and</strong> services<br />

can provide new platforms for economic growth <strong>and</strong><br />

employment creation, this will require implementation<br />

of the appropriate policy framework <strong>and</strong> a commitment<br />

to enhancing compet-iveness, both on a national level<br />

<strong>and</strong> at the level of the individual firm.<br />

16 MARCH 2019 CHAMBER.ORG.TT


Services<br />

COURTESY CHRISTINA MORELLO / PEXELS.COM<br />

18 MARCH 2019 CHAMBER.ORG.TT


Services<br />

Selling<br />

our services<br />

The services sector is turning in a strong performance, but is yet<br />

to become a viable exporter. A national exporters’ services registry<br />

<strong>and</strong> export training are just two of the initiatives TTCSI will launch<br />

in 2019 to help grow the services economy<br />

by Vashti G. Guyadeen<br />

General Manager,<br />

Trinidad <strong>and</strong> Tobago Coalition of Services Industries<br />

This year’s World Economic Forum held in Switzerl<strong>and</strong> in January focused<br />

on the “Industrial Revolution 4.0”. This refers to the significant role that<br />

automation <strong>and</strong> data analytics play in transforming manufacturing<br />

processes.<br />

IR 4.0 has not only impacted manufacturing. According to Professor<br />

Klaus Schwab, Executive Chairman of the World Economic Forum, “the Fourth<br />

Industrial Revolution, <strong>final</strong>ly, will change not only what we do but also who<br />

we are.<br />

“It will affect our identity <strong>and</strong> all the issues associated with it: our sense<br />

of privacy, our notions of ownership, our consumption patterns, the time we<br />

devote to work <strong>and</strong> leisure, <strong>and</strong> how we develop our careers, cultivate our skills,<br />

meet people, <strong>and</strong> nurture relationships.”<br />

Without a doubt, IR 4.0 will also impact the services sector. The question<br />

is, how prepared are Trinidad <strong>and</strong> Tobago services providers <strong>and</strong> industries for<br />

these changes?<br />

But despite the services sector showing<br />

a strong performance locally, it is yet to<br />

become a viable foreign exchange earner:<br />

its export performance has been poor compared<br />

with manufacturing <strong>and</strong> energy<br />

Strong local performance<br />

In Trinidad <strong>and</strong> Tobago, services’ contribution to GDP in 2017 was estimated<br />

at 50.8%, while agriculture <strong>and</strong> industry stood at 0.4% <strong>and</strong> 48.8% respectively<br />

(TTCSI, 2016). The services sector, unlike the hydrocarbon sector, has<br />

experienced significant growth despite external shocks attributed to the recent<br />

fall in global oil prices.<br />

But despite a strong performance locally, the sector is yet to become a<br />

viable foreign exchange earner: its export performance has been poor compared<br />

with manufacturing <strong>and</strong> energy. While the sector has been earmarked to fasttrack<br />

national diversification, it falls short in its ability to increase its trade <strong>and</strong><br />

earning power – a situation reflected in Trinidad <strong>and</strong> Tobago’s negative trade<br />

balance (exports minus imports) in international trade in services.<br />

For the period 2011 to 2016, there was a reported negative trade balance<br />

in regard to international trade in services, with services accounting for only<br />

28% of exports in 2011 (TTCSI, 2016). Clearly there are great opportunities to<br />

accelerate growth in the services sector.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 19


Blueprint for a Bold New Economy<br />

We have a comparative advantage in<br />

several sub-sectors including education<br />

services; cultural <strong>and</strong> creative services;<br />

professional services; <strong>and</strong> health services<br />

Net importer of services<br />

The European Union, in an assessment of the Economic Partnership Agreement<br />

(EPA) with Cariforum, noted that international trade in services has assumed<br />

a significant dimension in the sustainable development <strong>and</strong> economic growth<br />

strategies of Cariforum states, <strong>and</strong> commitments in external trade arrangements<br />

are critical in advancing the region’s prospects.<br />

The data in Table 1 show that Trinidad <strong>and</strong> Tobago is a net importer of<br />

services. However, in relative terms we are also a key exporter of services<br />

compared with other Cariforum states.<br />

Trinidad <strong>and</strong> Tobago’s primary services exports are travel, transport <strong>and</strong><br />

commercial services. We also have a comparative advantage in several subsectors<br />

including education services; cultural <strong>and</strong> creative services; professional<br />

services; <strong>and</strong> health services. It is imperative that support systems <strong>and</strong> the<br />

enabling environment are developed to foster growth in these sectors<br />

Table 1: Cariforum states – value of services exports <strong>and</strong> imports, 2016-2017<br />

Country Value of services exports (million US$) Value of services imports (million US$)<br />

Barbados (2016) 1,483 743<br />

Dominican Republic (2017) 8,476 3,354<br />

Guyana (2017) 134 453<br />

Jamaica (2017) 3,432 2,242<br />

Suriname (2017) 145 516<br />

Trinidad <strong>and</strong> Tobago (2017) 1,076 2,500<br />

The key ingredient in “going global” is<br />

ensuring that service providers <strong>and</strong><br />

industries meet global st<strong>and</strong>ards <strong>and</strong><br />

certification<br />

Source: World Trade Organisation<br />

Championing the services sector<br />

The Trinidad <strong>and</strong> Tobago Coalition of Services Industries (TTCSI) will embark<br />

on a number of initiatives in 2019 to propel growth in the services economy.<br />

Foremost on the agenda is data analytics. One of the key projects we have<br />

undertaken, with the support of the Ministry of Trade <strong>and</strong> Industry, is the<br />

development of a national exporters’ services registry. This will be invaluable in<br />

measuring the sector <strong>and</strong> giving government <strong>and</strong> the TTCSI better information,<br />

in order to provide knowledge-driven products which stimulate growth.<br />

Secondly, the TTCSI will execute a robust training schedule this year,<br />

including rollout of the Services Go Global (SGG) training programme. SGG<br />

was developed by Caribbean Export over eight years ago specifically to optimise<br />

the Cariforum region’s export of services. It aimed to develop the capacity of<br />

service providers <strong>and</strong> industries to capitalise on opportunities under the EPA,<br />

with a focus on export readiness.<br />

Participants will be guided through a four-stage road map showing how<br />

to propel their businesses onto the international stage. The TTCSI is the only<br />

certified agency locally to offer this training. SGG will be conducted in four<br />

sector clusters – creative <strong>and</strong> cultural industries including animation; tourism;<br />

health <strong>and</strong> wellness; <strong>and</strong> energy services.<br />

The key ingredient in “going global” is ensuring that service providers<br />

<strong>and</strong> industries meet global st<strong>and</strong>ards <strong>and</strong> certification. This issue is also being<br />

tackled by the TTCSI, <strong>and</strong> plans are in train to collaborate with the relevant<br />

agencies to ensure that our member associations <strong>and</strong> their members are<br />

equipped to trade regionally <strong>and</strong> globally.<br />

20 MARCH 2019 CHAMBER.ORG.TT


Tourism<br />

Where are<br />

all the tourists?<br />

Travel <strong>and</strong> tourism contribute less than 10% to Trinidad <strong>and</strong> Tobago’s GDP.<br />

There were high expectations with the possibility of S<strong>and</strong>als adding its<br />

br<strong>and</strong> to the sector. But why do we need a big name?<br />

by John Bell<br />

Past Director General <strong>and</strong> CEO, Caribbean Hotel Association<br />

<strong>and</strong> past President, International Hotel <strong>and</strong> Restaurant Association<br />

LIDIAN NEELEMAN / SHUTTERSTOCK.COM<br />

The best way to assess whether tourism has any real chance of success in<br />

Trinidad <strong>and</strong> Tobago is to determine the condition of the industry today<br />

in both isl<strong>and</strong>s. With that as a basis we can then project into the future.<br />

There can be little doubt that tourism is presently not much more than a<br />

basket case in Tobago, or that we have two quite separate isl<strong>and</strong> destinations<br />

to address.<br />

Current state of tourism<br />

Are we presently in any position to consider tourism as a viable financial<br />

opportunity? Let’s begin with Tobago.<br />

• Arrivals in Tobago in 2005 were slightly over 90,000. Today they are well<br />

under 20,000<br />

• As a consequence of this precipitous collapse in traffic there has been<br />

a decline in maintenance of the hotel stock, which has deteriorated<br />

significantly<br />

• In 2018 the efficiency <strong>and</strong> effectiveness of the seabridge has been<br />

disastrous<br />

• Airlift into Tobago out of the USA is virtually non-existent<br />

• The condition of the ANR Robinson International Airport at Crown Point<br />

is reminiscent of the mid-20th century in the Windward Isl<strong>and</strong>s.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 23


CHRIS ANDERSON


Tourism<br />

Now let’s review Trinidad:<br />

• With meetings <strong>and</strong> conventions growing in Port of<br />

Spain, there is a real prospect that conference tourism<br />

can be further developed<br />

• Adventure tourism is evolving slowly, but sadly with<br />

limited support thus far from Tourism Trinidad Limited<br />

• Sports tourism is also evolving slowly as a result of<br />

the government’s stadium construction programme<br />

• Golf in Trinidad remains dormant<br />

• Apart from carnival, cultural tourism remains<br />

undeveloped<br />

• Despite their obvious value, <strong>and</strong> access to several<br />

suitable bodies of water, watersports activity is sadly<br />

depressed.<br />

Restructuring the sector<br />

In short, it seems there has been little or no planned<br />

development in tourism on either isl<strong>and</strong>, leaving the<br />

nature of the industry speculative at best. But this should<br />

not deter us from thinking big about where tourism can<br />

<strong>and</strong> should go.<br />

Last year there was a welcome reorganisation of the<br />

government’s administration of the tourism sector. After<br />

several years of mismanagement, the Tourism Development<br />

Company Limited (TDC) was closed down <strong>and</strong> replaced<br />

by Tobago Tourism Agency Limited <strong>and</strong> Tourism Trinidad<br />

Limited.<br />

In Tobago at least, there was recognition that the private<br />

sector was a major player in the game, with several<br />

key appointments being made to the agency’s board.<br />

In short it seems there has been little<br />

or no planned development in tourism<br />

on either isl<strong>and</strong>, leaving the nature of<br />

the industry speculative at best<br />

The S<strong>and</strong>als saga<br />

So what are the prospects for the future?<br />

A great deal seemed to depend on S<strong>and</strong>als, which<br />

presented an exciting prospect for launching Tobago into<br />

the “real” Caribbean tourism world.<br />

There is no doubt that tourism, particularly in the<br />

northern Caribbean, has evolved separately into something<br />

quite different from what we know in Trinidad <strong>and</strong> Tobago.<br />

Tobago has long been a success story waiting to<br />

happen. The isl<strong>and</strong> is scenically beautiful. It has magnificent<br />

beaches <strong>and</strong> a splendid reef. Previous attempts<br />

at tourism development have resulted in two golf courses.<br />

The real problem is the airport at Crown Point, which is<br />

hopelessly inadequate.<br />

Which brings us back to the contentious issue of<br />

S<strong>and</strong>als.<br />

A great deal seemed to depend on<br />

S<strong>and</strong>als, which presented an exciting<br />

prospect for launching Tobago into<br />

the “real” Caribbean tourism world<br />

Benefits of a big br<strong>and</strong><br />

The benefit of a 900-room state-of-the-art resort opening<br />

in Tobago appeared to be enormous. S<strong>and</strong>als offered a<br />

valuable grown-up couples experience, while its twin<br />

sister, Beaches, promised a <strong>full</strong>-blown family programme.<br />

It seemed that Tobago might at last acquire a property<br />

of the kind that Jamaica, Dominican Republic <strong>and</strong> The<br />

Bahamas have long hosted.<br />

And that was only the beginning. The overriding<br />

value that S<strong>and</strong>als would have been able to provide was<br />

airlift access out of the United States.<br />

S<strong>and</strong>als had the potential to attract American Airlines<br />

to Tobago out of its Miami hub. JetBlue would have been<br />

able to provide access from New York <strong>and</strong> the tri-state<br />

area. United Airlines might also have been attracted to<br />

serve Tobago out of Washington DC, Newark, or Houston.<br />

But the United States, with all its up-market worth<br />

<strong>and</strong> two or even three new gateways, remains completely<br />

closed to Tobago.<br />

The projects <strong>and</strong> developments cited<br />

above are still very much needed to<br />

establish our tourism offering on the<br />

global stage. With the right marketing<br />

strategy, infrastructure <strong>and</strong> political<br />

will, accomplishing all of them is still<br />

entirely possible<br />

The government was prepared to provide S<strong>and</strong>als with<br />

a location at Golden Grove, <strong>and</strong> the valuable asset that<br />

goes with that. So there was a very real expectation that<br />

the S<strong>and</strong>als development would set off a chain reaction,<br />

stimulating development in the rest of Tobago. The ANR<br />

Robinson International Airport at Crown Point would have<br />

become a real international port of entry.<br />

However, S<strong>and</strong>als pulled out of the Tobago deal.<br />

But all is not lost. The projects <strong>and</strong> developments cited<br />

above are still very much needed to establish Trinidad <strong>and</strong><br />

Tobago’s tourism offering on the global stage. With the<br />

right marketing strategy, infrastructure, <strong>and</strong> political will,<br />

accomplishing all of them is still entirely possible.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 25


Blueprint for a Bold New Economy<br />

Manufacturing the future<br />

An improved trading environment is needed to<br />

create a sustainable resilient manufacturing sector.<br />

Tackling bureaucratic challenges, illicit trade <strong>and</strong><br />

an uncertain industrial relations climate are high<br />

on the TTMA’s agenda<br />

by The Trinidad <strong>and</strong> Tobago<br />

Manufacturers’ Association<br />

It is no secret that business conditions in the Trinidad<br />

<strong>and</strong> Tobago economy are less than ideal. The Central<br />

Bank reported in its last monetary policy announcement<br />

(December 2018) that “primary economic indicators are<br />

all down as growth has slackened <strong>and</strong> inflation remains<br />

sluggish because of weak domestic dem<strong>and</strong>”.<br />

The manufacturing sector provides<br />

the necessary foundation for an<br />

economically, socially <strong>and</strong> environmentally<br />

sustainable society<br />

In an environment with slow economic growth, the<br />

Trinidad <strong>and</strong> Tobago Manufacturers’ Association<br />

(TTMA) believes there is an urgent need to explore new<br />

opportunities in the manufacturing sector, which has the<br />

potential to contribute to positive economic growth <strong>and</strong><br />

development.<br />

The manufacturing sector goes far beyond the<br />

employees, companies <strong>and</strong> investors directly involved<br />

in industry. It affects everyone. Defined by the TTMA as<br />

including all the non-energy sub-sectors, it provides the<br />

necessary foundation for an economically, socially <strong>and</strong><br />

environmentally sustainable society. Manufacturing also<br />

drives technological innovation – the key to research<br />

<strong>and</strong> development – <strong>and</strong> the creation of new products <strong>and</strong><br />

manufacturing processes.<br />

While the sector is critical to the local economy, it<br />

faces many challenges, one of which is operating in a<br />

dual economy that relies heavily on oil <strong>and</strong> gas revenues.<br />

The inability of the manufacturing sector’s contribution to<br />

Trinidad <strong>and</strong> Tobago’s GDP, to move beyond 9% for the<br />

past ten years indicates stagnation. This is the result of<br />

several factors, including poor policy infrastructure <strong>and</strong><br />

too many bureaucratic procedures that cause delays or<br />

bottlenecks.<br />

Bureaucratic agencies <strong>and</strong> procedures<br />

Manufacturers are critical of the regulatory bodies<br />

that support the trading environment, because of their<br />

recurring inability to function efficiently <strong>and</strong> effectively.<br />

A number of agencies play key roles in fostering an<br />

enabling environment, but they are plagued by a lack<br />

of human <strong>and</strong> financial resources, <strong>and</strong> lack of access to<br />

technological advances, which can result in delays in<br />

trading both locally <strong>and</strong> internationally.<br />

Another concern of local producers is the growth<br />

of illicit trade, which has a negative impact on local<br />

manufacturing. Every year, more goods <strong>and</strong> br<strong>and</strong>s are<br />

affected, from consumer products – including electronics,<br />

apparel <strong>and</strong> alcoholic beverages – to vehicle lubricants<br />

<strong>and</strong> auto parts. This undermines legitimate manufacturers,<br />

as illicit goods are cheaper on the local market. Most of the<br />

illicit traders do not pay the correct duties, <strong>and</strong> if goods<br />

are smuggled in, they do not pay any duties at all. In some<br />

instances goods do not meet national st<strong>and</strong>ards, <strong>and</strong> in<br />

others they do not even have free sale certificates in their<br />

countries of origin.<br />

Agencies are plagued by the lack of<br />

human <strong>and</strong> financial resources, <strong>and</strong> lack<br />

of access to technological advances,<br />

which can result in delays in<br />

trading both locally <strong>and</strong> internationally<br />

Improving industrial relations<br />

According to local producers, labour force issues are also<br />

affecting the manufacturing sector. For example, when<br />

job openings are not filled <strong>and</strong> the work force lacks the<br />

skill sets that the market needs, manufacturers cannot<br />

maintain or increase production levels to satisfy customer<br />

dem<strong>and</strong>. The fragile industrial climate of Trinidad <strong>and</strong><br />

Tobago along with the uncertain relations between<br />

employers <strong>and</strong> employees, has had a negative impact on<br />

the manufacturing sector <strong>and</strong> the overall economy.<br />

Additionally, local companies face considerable<br />

barriers to trade when exporting. The lack of market<br />

intelligence, lengthy registration procedures, <strong>and</strong> onerous<br />

labelling requirements, are some of the major concerns for<br />

firms which aim to become net foreign exchange earners<br />

<strong>and</strong> <strong>full</strong>y contribute to the local economy.<br />

26 MARCH 2019 CHAMBER.ORG.TT


1968 / SHUTTERSTOCK.COM<br />

Resilient manufacturing<br />

In spite of these challenges, there are real opportunities<br />

in the manufacturing sector. The food <strong>and</strong> beverage<br />

sub-sector, for example, is dynamic <strong>and</strong> innovative. In<br />

2018, a 5.6% increase in food, beverage <strong>and</strong> tobacco production<br />

demonstrated its continued growth. There are also<br />

opportunities in chemicals, printing <strong>and</strong> packaging, <strong>and</strong><br />

construction.<br />

In order for these opportunities to advance, however,<br />

a resilient, sustainable manufacturing environment needs<br />

to be developed. Certain strategic initiatives are required:<br />

• a globally competitive regulatory framework<br />

• improved performance by government processes<br />

• a supportive international trade position.<br />

A resilient, sustainable manufacturing<br />

environment needs to be developed<br />

The bottom line<br />

Every economic sector faces challenges, <strong>and</strong> the<br />

manufacturing sector is no exception. The TTMA<br />

believes that the way in which the challenges of the<br />

manufacturing sector are addressed holds the key to<br />

progress. The above recommendations can go a long<br />

way in building a future sustainable economy <strong>and</strong> contributing<br />

to economic growth.<br />

Other key prerequisites for success include:<br />

• the development of a science, technology<br />

<strong>and</strong> innovation policy which promotes local<br />

manufacturing<br />

• promotion of innovative/technological<br />

entrepreneurship<br />

• adoption of an education <strong>and</strong> workforce policy<br />

that develops superior talent<br />

• furtherance of economic diversification strategies<br />

• more collaboration between manufacturers <strong>and</strong><br />

universities.<br />

CHAMBER.ORG.TT MARCH 2019 27


COURTESY THE LUSH KINGDOM


Creativity<br />

Empowering<br />

our artists<br />

The creative sector was identified by Trinidad<br />

<strong>and</strong> Tobago as a priority sector for growth in<br />

2011. What has it achieved since then, <strong>and</strong> how<br />

far does it still have to go to become a viable<br />

contributor to GDP?<br />

by Keith Nurse<br />

Senior Fellow <strong>and</strong> WTO Chair<br />

Sir Arthur Lewis Institute of Social <strong>and</strong> Economic Studies,<br />

The University of the West Indies<br />

Alicia Shepherd<br />

Sir Arthur Lewis Institute of Social <strong>and</strong> Economic Studies,<br />

The University of the West Indies<br />

The Caribbean region is by no means short of globally recognisable artists;<br />

<strong>and</strong> for decades now Trinidad <strong>and</strong> Tobago has stood out as one of the<br />

region’s major artistic sources, with the likes of Michel-Jean Cazabon, Sir<br />

Vidia S Naipaul, Sparrow, Geoffrey Holder, Boscoe Holder, Billy Ocean, Peter<br />

Minshall, Heather Headley, Nicki Minaj, Meiling, Bunji Garlin, <strong>and</strong> Machel<br />

Montano.<br />

These artists have generated global reach beyond what the country’s<br />

size would suggest. And in recent times, new digital, mobile <strong>and</strong> internet<br />

technologies have offered creatives alternative business models <strong>and</strong> markets,<br />

creating the space for new areas of employment such as animation <strong>and</strong> gaming.<br />

In recognition of the industries’ vast<br />

potential, Caribbean governments have<br />

recently begun to carve out strategic<br />

pathways to develop the industries with<br />

the aim of diversifying their economies<br />

Growth of the sector<br />

By way of contributions to GDP, exports, employment <strong>and</strong> intellectual property<br />

earnings, the cultural/creative industries, even amidst global economic setbacks,<br />

continue to outperform most other sectors in Caribbean economies. In t<strong>and</strong>em<br />

with other key stakeholders, <strong>and</strong> in recognition of the industries’ vast potential,<br />

Caribbean governments have recently begun to carve out strategic pathways to<br />

develop the industries with the aim of diversifying their economies.<br />

The government of Trinidad <strong>and</strong> Tobago, for example, in 2010 highlighted<br />

the creative industries as growth poles in its quest for “consensus building,<br />

advanced social <strong>and</strong> economic prosperity <strong>and</strong> sustainability, <strong>and</strong> successful<br />

diversification” (GORTT 2011).<br />

Capturing carnival’s contribution<br />

The country’s carnival activities, for instance, generate on average about 12%<br />

of arrivals <strong>and</strong> visitor expenditures on an annual basis, a spectacular return<br />

on investment considering its official events span a three-week period. Its<br />

impact on other sectors such as media, retail, food <strong>and</strong> beverage, <strong>and</strong> ground<br />

Striking design from the Lush<br />

Kingdom fashion label<br />

CHAMBER.ORG.TT<br />

MARCH 2019 29


Blueprint for a Bold New Economy<br />

transport are also quite significant. In 2017, the estimated<br />

total visitor expenditure was measured at US$50 million.<br />

The country’s carnival activities, for<br />

instance, generate on average about 12%<br />

of arrivals <strong>and</strong> visitor expenditures on an<br />

annual basis<br />

It can be argued that through their synergistic relationships<br />

with other sectors in the local economy, the creative<br />

industries rank among the top revenue earners in Trinidad<br />

<strong>and</strong> Tobago. In 2006, the music industry was reported as<br />

having earned US$28.2 million <strong>and</strong> employed some 5,500<br />

people. In film, between 2007 <strong>and</strong> 2016, foreign filming<br />

on the isl<strong>and</strong> contributed some TT$37 million.<br />

Trade flows<br />

According to the Minister of Planning <strong>and</strong> Development,<br />

Camille Robinson-Regis, the internet technology sector,<br />

which has significant influence in the creative industries,<br />

has the potential to surpass its present contribution to GDP<br />

of TT$5.5 billion (CreativeTT, Trinidad Guardian 2018).<br />

Invariably, the spend in these <strong>and</strong> other creative industries<br />

doesn’t capture the synergistic impact of intellectual<br />

property br<strong>and</strong>ing <strong>and</strong> destination br<strong>and</strong>ing.<br />

On closer examination of trade flows, however,<br />

Trinidad <strong>and</strong> Tobago is found to have a substantial <strong>and</strong><br />

widening trade deficit in cultural goods. We import more<br />

than we export. Trade in services (e.g. live performances,<br />

tours, concerts, designers’ fees etc.) <strong>and</strong> earnings from<br />

cultural, heritage <strong>and</strong> festival tourism are the significant<br />

sources of export earnings; but unfortunately these are<br />

the areas where there is limited reporting <strong>and</strong> data capture,<br />

<strong>and</strong> so the sector is not adequately represented in national<br />

accounts. Other challenges to business development<br />

include the lack of access to fintech services <strong>and</strong> capital<br />

from the local financial sector.<br />

On closer examination of trade flows,<br />

however, Trinidad <strong>and</strong> Tobago is found to<br />

have a substantial <strong>and</strong> widening trade<br />

deficit in cultural goods<br />

Going forward, there is need for governmental<br />

agencies to monitor <strong>and</strong> evaluate<br />

existing policies <strong>and</strong> support mechanisms,<br />

<strong>and</strong> to allocate greater capital investment<br />

There has also been growth in the festivals sector (e.g.<br />

the Bocas Literary Festival, the Trinidad <strong>and</strong> Tobago Film<br />

Festival, Animae Caribe) <strong>and</strong> in the export expansion of<br />

some sectors, particularly mas (carnival), fashion, music,<br />

animation <strong>and</strong> film.<br />

Export facilitation by way of entities such as<br />

CreativeTT, exporTT, TTBizLink, the drafting of a<br />

national cultural policy, <strong>and</strong> the Cariforum-EU Economic<br />

Partnership Agreement (EPA) also create valuable space<br />

for industry expansion.<br />

Outlook<br />

Going forward, there is need for governmental agencies<br />

to monitor <strong>and</strong> evaluate existing policies <strong>and</strong> support<br />

mechanisms, allocate greater capital investment, <strong>and</strong><br />

provide adequate <strong>and</strong> appropriate training programmes<br />

for both business start-up <strong>and</strong> business expansion.<br />

Another critical area is financial sector reform to<br />

reflect the needs of this industry. Such approaches would<br />

require the collaboration of key stakeholders, the mapping<br />

of sectoral performance, digital innovation, <strong>and</strong> the<br />

adoption of a managerial culture that prioritises improved<br />

quality <strong>and</strong> global competitiveness.<br />

References<br />

“Businesses get $3.2 million for innovation”. Trinidad Guardian, May 4, 2018.<br />

Accessed August 30, 2018. http://www/guardian.co.tt/business/2018-04-15/<br />

businesses-get-32m-innovation<br />

CreativeTT, accessed January 1, 2018. http://www.musictt.co.tt/ <strong>and</strong> http://<br />

www.filmtt.co.tt/<br />

Government of the Republic of Trinidad <strong>and</strong> Tobago, Ministry of Planning<br />

<strong>and</strong> the Economy, Mid-Term Policy Framework 2011-2014, Innovation for<br />

Lasting Prosperity. Accessed November 21, 2018. http://www.finance.gov.tt/<br />

wp-content/uploads2013/11/medium-Term-Policy-Framework-2011-14.pdf<br />

Recommendations <strong>and</strong> next steps<br />

Nonetheless, strategies followed in previous years have<br />

yielded positive outcomes.<br />

The Copyright Music Organisation of Trinidad <strong>and</strong><br />

Tobago (COTT), for example, has been critical in areas of<br />

revenue generation by securing royalty income for authors<br />

<strong>and</strong> composers, <strong>and</strong> in the deepening of the institutional<br />

structure of the sector. As the global cultural economy is<br />

further aligned with digital trade, the role of COTT <strong>and</strong><br />

digital aggregators will become even more important.<br />

30 MARCH 2019 CHAMBER.ORG.TT


Creativity<br />

CHAMBER.ORG.TT<br />

MARCH 2019 31


MARCI PARAVIA/SHUTTERSTOCK.COM<br />

32 MARCH 2019 CHAMBER.ORG.TT


Agriculture <strong>and</strong> Food Security<br />

Towards a renaissance<br />

of agriculture<br />

If there is one good thing to come from climate change, it will be a<br />

radical rethink of agriculture <strong>and</strong> agro-processing <strong>and</strong> a shift towards<br />

a “climate-smart” industry<br />

by Steve Maximay<br />

Managing Director, Science-Based Initiatives<br />

You could be forgiven for for thinking you have heard this talk about<br />

diversification before. Successive, but by no means successful,<br />

governments have touted diversification efforts, which included<br />

agriculture as part of a magical restructuring of the Trinidad <strong>and</strong> Tobago<br />

economy.<br />

Early efforts were concentrated on producing more food to offset the<br />

ever-increasing import bill <strong>and</strong> to bolster exports. Prior to the volatile food<br />

price crisis of 2008-2009, the Trinidad <strong>and</strong> Tobago government’s idea of food<br />

security revolved around “months of cover”, where the amount of foreign<br />

exchange held in the Central Bank was divided by the monthly food import<br />

bill to determine how many months of imports were achievable.<br />

Once worldwide food prices <strong>and</strong> food availability returned to less<br />

cataclysmic levels by 2010, the prioritising of substantial local production<br />

became less important.<br />

A review of agricultural trade statistics, local production data, pronouncements<br />

by officials, <strong>and</strong> the heralded benefits of diversification, is<br />

insufficient to explain the lack of success to date. It will take more than an<br />

urgent need, worthwhile individual efforts, fledgling agro-industrial enterprises,<br />

<strong>and</strong> a declining oil <strong>and</strong> gas sector to propel agriculture to equitable stature<br />

within the local economy.<br />

At the core of diversification is change, which is dependent on the<br />

production of a “positive vision of the future”, which in turn evolves when<br />

dissatisfaction with the status quo exceeds the natural human resistance to<br />

change. It is safe to conclude that, notwithst<strong>and</strong>ing the work of the Vision<br />

2020 agriculture sub-committee <strong>and</strong> other attempts at articulating a vision of<br />

a modern agricultural sector, the outlook is still less than positive.<br />

Notwithst<strong>and</strong>ing the work of the Vision<br />

2020 agriculture sub-committee <strong>and</strong><br />

other attempts at articulating a vision of<br />

a modern agricultural sector, the outlook<br />

is less than positive<br />

Climate-smart agriculture<br />

Previous attempts at diversification were ostensibly driven by economic<br />

development, but the 2019 version must be circumscribed by climate concerns.<br />

Diversification will not only be about change, but about climate change.<br />

The United Nations Framework Convention on Climate Change (UNFCCC)<br />

describes economic diversification as “the process of shifting an economy<br />

away from a single income source toward multiple sources from a growing<br />

range of sectors <strong>and</strong> markets”. Traditionally, it has been applied as a strategy<br />

to encourage positive economic growth <strong>and</strong> development.<br />

In the context of climate change adaptation, diversification takes on a new<br />

relevance as a strategy to move away from vulnerable products, markets, <strong>and</strong><br />

CHAMBER.ORG.TT<br />

MARCH 2019 33


CHRIS ANDERSON<br />

Bold New Economy<br />

<br />

Local produce at the Arima market<br />

jobs towards income sources that are low-emission <strong>and</strong> more climate-resilient.<br />

It is in that context that agriculture <strong>and</strong> agro-industry will continue to<br />

attract the kind of propulsion needed to attain pride of place. Adapting to<br />

climate change will necessitate the type of climate-smart agriculture that is<br />

steadily being incorporated into local agricultural efforts.<br />

The current dean of the Faculty of Food <strong>and</strong> Agriculture at The University<br />

of the West Indies, St Augustine, Dr Wayne Ganpat, underst<strong>and</strong>s this. In 2018<br />

the Faculty hosted a very successful international conference on “Climate<br />

Change Impacts on Food <strong>and</strong> Nutrition Security”, showcasing the ongoing<br />

efforts of UWI <strong>and</strong> other stakeholders.<br />

There are significant, designated, international resources for industry<br />

support to make local agriculture <strong>and</strong> agro-industry more climate-resilient.<br />

On a positive note, the UNFCCC’s Green Climate Fund opened a regional office<br />

in Grenada last year. Trinidad <strong>and</strong> Tobago has yet to meaning<strong>full</strong>y engage with<br />

its team for project support.<br />

The nascent local agriculture sector<br />

will be predominantly a producer of<br />

goods enhancing food security<br />

Resource conservation<br />

Pursuant to a positive vision of the future, local production efforts should<br />

be concentrated in two symbiotic streams: intensive production for nutrition<br />

security, <strong>and</strong> specialised/niche production for value-added export.<br />

One challenge which Trinidad <strong>and</strong> Tobago faces is that it does not have the<br />

l<strong>and</strong> area to produce commodities for export, as Prime Minister Dr Keith Rowley<br />

reminded us in 2018. There is not enough l<strong>and</strong> for agriculture to compete<br />

success<strong>full</strong>y on the global stage. Therefore the nascent local agriculture sector<br />

will be predominantly a producer of goods enhancing food security, with a<br />

significant trade in services.<br />

The future agriculture sector will include intensified crop <strong>and</strong> livestock<br />

production which will require rationalised use of l<strong>and</strong>, water, energy, <strong>and</strong> other<br />

inputs produced by using fossil fuels. Practitioners will increasingly need to<br />

monitor resource conservation, safety, biodiversity support, <strong>and</strong> greenhouse<br />

gas emissions.<br />

The major production of carbohydrates will be via root crops that feed into<br />

the processing industries. The preponderance of animal protein will be sourced<br />

from small ruminants including neo-tropicals, pigs <strong>and</strong> poultry. Refitted grain<br />

legume <strong>and</strong> vegetable production, using layered <strong>and</strong> vertical multi-crop systems,<br />

34 MARCH 2019 CHAMBER.ORG.TT


Agriculture <strong>and</strong> Food Security<br />

NHATTALLI/SHUTTERSTOCK.COM<br />

will provide the protein <strong>and</strong> vitamin components of the<br />

nutrition security project.<br />

The devastating floods of 2018 <strong>and</strong> other<br />

challenges including praedial larceny<br />

<strong>and</strong> l<strong>and</strong> availability will make businessas-usual<br />

a very costly option<br />

Skill-sets<br />

There is an exp<strong>and</strong>ing reservoir of technical expertise<br />

to service the climate-smart agriculture required for the<br />

future. There are internationally recognised experts based<br />

in Trinidad <strong>and</strong> Tobago. Prominent examples are: Erle<br />

Rahaman-Noronha of Wa Samaki Ecosystems, Alpha Sennon of Whyfarm, <strong>and</strong><br />

Wendy Lee Yuen of El Carmen Estate.<br />

Climate change impacts will provide the external stimuli needed for the<br />

agriculture sector’s realignment. In addition, Trinidad <strong>and</strong> Tobago is likely to<br />

move forward if there is an articulated, attainable vision for the sector. The<br />

devastating floods of 2018 <strong>and</strong> other challenges including praedial larceny<br />

<strong>and</strong> l<strong>and</strong> availability will make business-as-usual a very costly option.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 35


Blueprint for a Bold New Economy<br />

The challenge of<br />

renewable energy<br />

Depleting oil <strong>and</strong> gas resources, <strong>and</strong> a 79% growth in Trinidad <strong>and</strong> Tobago’s<br />

carbon footprint: these alone should provide enough impetus to resolve the<br />

many problems associated with renewable energy <strong>and</strong> energy efficiency<br />

by Dr Zaffar Khan<br />

Programme Director<br />

UWI-Arthur Lok Jack Global School of Business<br />

Atiyyah A. Khan<br />

Energy Consultant<br />

Econsultants Limited<br />

For fifteen years, Trinidad <strong>and</strong> Tobago has been adversely affected by<br />

natural gas curtailment issues, despite recent increased production<br />

resulting from attractive capital allowances in the oil <strong>and</strong> gas fiscal<br />

regime.<br />

In addition, the recently signed MOU with Venezuela for the supply of<br />

natural gas has its risks <strong>and</strong> challenges, especially in terms of security of supply<br />

<strong>and</strong> regional geopolitical considerations.<br />

Fig. 1: Trinidad <strong>and</strong> Tobago’s high energy<br />

consumption per capita in kilograms of oil<br />

equivalent in comparison to other countries<br />

Nations using the most energy<br />

United Arab Emirates<br />

Kuwait<br />

Trinidad <strong>and</strong> Tobago<br />

Canada<br />

United States<br />

Finl<strong>and</strong><br />

Sweden<br />

Belgium<br />

Australia<br />

Saudi Arabia<br />

5,754<br />

5,701<br />

5,668<br />

5,607<br />

9,707<br />

9,566<br />

8,553<br />

8,240<br />

7,843<br />

7,204<br />

Source: Ugursal 2011; Wall Street Journal 2013<br />

Trinidad <strong>and</strong> Tobago’s low electricity<br />

cost of US$0.06/kWh in some cases is<br />

at least ten times cheaper than other<br />

Caribbean <strong>and</strong> Latin American countries<br />

Trinidad <strong>and</strong> Tobago has the third highest energy consumption per capita in<br />

kilograms of oil equivalent in the world (Figure 1), <strong>and</strong> currently uses natural<br />

gas to generate most of its electricity. While natural gas is the cleanest of all<br />

the fossil fuels, it emits atmospheric greenhouse gases. This, coupled with the<br />

CO 2<br />

emissions from the transport sector, has led to a 79% growth in our local<br />

carbon footprint (Figure 2).<br />

36 MARCH 2019 CHAMBER.ORG.TT


Renewable Energy<br />

Fig. 2: Estimated levels of carbon emissions<br />

(million metric tonnes) from Trinidad <strong>and</strong><br />

Tobago’s transport sector, 2002-08<br />

2.4<br />

2.31<br />

2.13<br />

2.15<br />

2.0<br />

1.97<br />

1.76<br />

1.6<br />

1.67<br />

Jan ‘04<br />

Jan ‘06 Jan ‘08<br />

Source: US Energy Information Administration 2013<br />

It is therefore essential for Trinidad <strong>and</strong> Tobago to urgently increase its use of<br />

renewable energy (RE) <strong>and</strong> develop its energy efficiency (EE) initiatives. These<br />

will provide the following benefits:<br />

• lower levels of energy consumption, resulting in lower energy bills for<br />

residential, commercial <strong>and</strong> industrial consumers, which can improve<br />

the reliability of the electricity generation, transmission <strong>and</strong> distribution<br />

system<br />

• reduced need for investment in new power generation infrastructure<br />

• new employment opportunities, from research <strong>and</strong> development to manufacturing.<br />

Fig. 3: Comparison between Trinidad <strong>and</strong> Tobago <strong>and</strong><br />

other developing nations in terms of trends between<br />

GDP growth per capita <strong>and</strong> carbon intensity growth<br />

42,000<br />

3.5<br />

2.10<br />

25.0<br />

22.5<br />

15.0<br />

Trinidad <strong>and</strong> Tobago<br />

has increased its<br />

carbon footprint by<br />

79% because both its<br />

GDP per capita <strong>and</strong><br />

its carbon intensity<br />

have increased.<br />

12.5<br />

Trinidad<br />

<strong>and</strong> Tobago<br />

Developing<br />

countries<br />

16,800<br />

12,600<br />

8,400<br />

4,200<br />

0.70<br />

0.35 2.5<br />

Developing countries<br />

have increased their<br />

carbon footprint by<br />

41.2% because its GDP<br />

per capita has increased<br />

faster than its carbon<br />

intensity has decreased.<br />

GDP per capita<br />

PPP US$<br />

CO 2<br />

emissions refer to energyrelated<br />

emissions. Emissions from<br />

deforestation are not included.<br />

Carbon intensity of growth<br />

CO 2<br />

emissions per unit of GDP<br />

Kt CO 2<br />

per million 2000 PPP US$)<br />

Carbon footprint<br />

CO 2<br />

emissions per capita<br />

(t CO 2<br />

)<br />

Source: United Nations Development Programme 2013<br />

Barriers to RE <strong>and</strong> EE development<br />

Despite its many benefits, the implementation of local RE <strong>and</strong> EE initiatives is<br />

challenging. The sector is hampered by several barriers (Figure 3):<br />

• high capital <strong>and</strong> transaction costs<br />

• the low price of electricity <strong>and</strong> fuel as a result of energy subsidies<br />

• inability to implement appropriate legislation <strong>and</strong> regulations<br />

• limited government support via fiscal incentives<br />

• lack of public awareness<br />

• limited access to EE technologies <strong>and</strong> measures<br />

Source: UN Advisory Group on Energy <strong>and</strong> Climate Change 2010<br />

CHAMBER.ORG.TT<br />

MARCH 2019 37


Blueprint for a Bold New Economy<br />

These obstacles increase the financial risks associated with<br />

RE <strong>and</strong> EE investments.<br />

electricity” (Energy Chamber of Trinidad <strong>and</strong> Tobago 2013),<br />

which is hostile to EE <strong>and</strong> must change.<br />

Barriers<br />

Fig. 4: Barriers to renewable energy <strong>and</strong><br />

energy efficiency in Trinidad <strong>and</strong> Tobago<br />

Technical<br />

Economic<br />

Political<br />

Social<br />

Natural conditions<br />

Technological constraints<br />

Infrastructure<br />

Price/cost<br />

Financial aspects<br />

Market failure/distortion<br />

Policy<br />

Institutional capacity<br />

Regulatory<br />

Consumer behaviour/awareness<br />

Interaction networks<br />

Cultural<br />

Tackling the issues<br />

These issues can be addressed through several measures:<br />

policy, legislation <strong>and</strong> regulation; st<strong>and</strong>ards; <strong>and</strong><br />

m<strong>and</strong>ated fiscal incentives <strong>and</strong> financing institutional<br />

capacity strengthening.<br />

The 1994 United Nations Framework Convention on<br />

Climate Change (UNFCCC) <strong>and</strong> the 1997 Kyoto Protocol<br />

were developed to enable member countries to reduce<br />

their greenhouse gas (GHG) emissions <strong>and</strong> in turn decrease<br />

atmospheric GHG concentrations. Trinidad <strong>and</strong> Tobago is<br />

a ratified signatory under both of these mechanisms as<br />

a non-Annex 1 country: it is not obligated to reduce its<br />

emissions, but can do so on a voluntary basis.<br />

A number of fiscal incentives (see sidebar) were<br />

introduced in the 2010-11 <strong>and</strong> 2011-12 national budgets,<br />

in an effort to promote alternative energy use <strong>and</strong> EE.<br />

A number of these incentives required revisions to the<br />

Customs Act, the Income Tax Act <strong>and</strong> the VAT Act (Energy<br />

Chamber of Trinidad <strong>and</strong> Tobago 2011).<br />

Psychological/moral<br />

Subsidised fuel <strong>and</strong> electricity prices<br />

Trinidad <strong>and</strong> Tobago’s low electricity cost of US$0.06/kWh<br />

in some cases is at least ten times cheaper than other<br />

Caribbean <strong>and</strong> Latin American countries (Figure 5). This<br />

acts as an enormous disincentive to the development <strong>and</strong><br />

utilisation of RE <strong>and</strong> EE mechanisms locally, making it<br />

uneconomical for RE <strong>and</strong> EE to penetrate the local energy<br />

market.<br />

Avg. domestic electricity tariff ($US/kWh)<br />

0.7<br />

0.4<br />

Trinidad<br />

Belize<br />

St Lucia<br />

Jamaica<br />

0<br />

Fig. 5: Comparison of electricity tariffs<br />

among various Caribbean isl<strong>and</strong>s<br />

Barbados<br />

The Bahamas<br />

St Vincent<br />

Anguilla<br />

Grenada<br />

Curacao<br />

Dominica<br />

Cayman Isl<strong>and</strong>s<br />

Antigua<br />

Bermuda<br />

Source: Shirley et al. 2013<br />

Culture, education, <strong>and</strong> lack of awareness<br />

Popular attitudes towards energy, <strong>and</strong> its resultant<br />

wasteful use, have stemmed from its low cost. This, along<br />

with lack of education, supports a culture of “wastage<br />

<strong>and</strong> inefficient use of the natural gas that generates our<br />

RE policy<br />

In 2011, a draft RE policy was formulated, which<br />

recommended the implementation of various initiatives<br />

<strong>and</strong> fiscal incentives to promote the use of RE <strong>and</strong> increase<br />

EE locally. The framework also set a target of producing<br />

5% or 60MW of the country’s peak electricity supply from<br />

RE sources.<br />

Climate change policy<br />

A draft climate change policy document was prepared<br />

<strong>and</strong> discussed at public consultations before <strong>final</strong>isation.<br />

This covered GHG emission reduction via RE use<br />

<strong>and</strong> EE measures.<br />

Carbon emission reduction framework<br />

The Ministry of Planning <strong>and</strong> Development, UNDP <strong>and</strong><br />

Factor CO 2<br />

consultants will embark on the formulation of<br />

a draft policy to address CO 2<br />

emissions from our power<br />

generation, industrial <strong>and</strong> transportation sectors.<br />

The consultants will conduct policy reviews, design<br />

business-as-usual (BAU) emission trajectories, recognise<br />

low CO 2<br />

opportunities, <strong>and</strong> devise low CO 2<br />

scenarios for<br />

possible implementation.<br />

EE policy<br />

The National Energy Corporation of Trinidad <strong>and</strong> Tobago<br />

has been m<strong>and</strong>ated by the government to produce a draft<br />

EE policy targeting industrial plants within the Point Lisas<br />

Industrial Estate.<br />

The UWI-Arthur Lok Jack Global School of Business<br />

offers an MBA in sustainable energy management, the<br />

only one of its kind in the Caribbean. It allows students<br />

to contribute to the successful “planning, execution <strong>and</strong><br />

monitoring” of energy projects <strong>and</strong> organisations. It<br />

establishes a framework for the economic diversification<br />

38 MARCH 2019 CHAMBER.ORG.TT


Renewable Energy<br />

COURTESY A.P.P.A./UNSPLASH.COM<br />

Trinidad & Tobago’s fiscal incentives for energy<br />

efficiency <strong>and</strong> renewable energy<br />

Solar energy incentives included:<br />

• import duty reduced to 0% on regional imports of solar<br />

water heaters (SWHs)<br />

• 0% VAT rating on SWHs<br />

• 25% tax allowance on the value of SWHs up to a maximum<br />

of $10,000<br />

• 150% wear <strong>and</strong> tear allowance on the cost of SWHs<br />

• 150% wear <strong>and</strong> tear allowance on plant, machinery <strong>and</strong><br />

equipment used to manufacture SWHs <strong>and</strong> solar photovoltaics<br />

(SPVs)<br />

<br />

How long does it take to get serious about solar energy?<br />

Wind energy incentives included:<br />

<strong>and</strong> development of regional clusters, particularly in the<br />

context of reduced dependence on oil <strong>and</strong> gas revenues<br />

(ALJGSB 2012).<br />

Recommendations to improve EE<br />

There are plenty of low-hanging fruit which could<br />

improve local EE in the power generation, residential,<br />

petrochemical, transportation <strong>and</strong> manufacturing sectors<br />

(Energy Chamber of Trinidad <strong>and</strong> Tobago 2013).<br />

Popular attitudes toward energy, <strong>and</strong> its<br />

resultant wasteful use, have stemmed from<br />

its low costs<br />

In the area of power generation, for example, we can:<br />

• improve the efficiency of existing power generation<br />

• improve operational efficiency<br />

• enable open access to the grid by RE generators<br />

• reduce emissions<br />

• improve efficiency of LNG production<br />

• implement energy-saving opportunities <strong>and</strong> st<strong>and</strong>ards.<br />

In the area of residential buildings, we can:<br />

• implement electricity quotas: design homes to be<br />

more energy-efficient <strong>and</strong> to use less electricity<br />

• improve the efficiency of existing households, reducing<br />

electricity consumption.<br />

Future initiatives for both RE <strong>and</strong> EE must address issues<br />

related to feed-in tariffs, net metering, grid capacity,<br />

<strong>and</strong> infrastructure, as well as safety considerations.<br />

• import duty reduced to 0% on imports of wind turbines<br />

<strong>and</strong> related equipment<br />

• 0% VAT rating on wind turbines<br />

• 150% wear <strong>and</strong> tear allowance on the cost of wind<br />

turbines <strong>and</strong> supporting equipment<br />

• wear <strong>and</strong> tear allowance of 150% on equipment used to<br />

manufacture wind turbines<br />

Energy efficiency incentives included:<br />

• 150% tax allowance on the cost of commissioning<br />

energy audits <strong>and</strong> the design <strong>and</strong> installation of energysaving<br />

systems<br />

• accelerated depreciation of 75% on acquisition of smart<br />

energy-efficient systems<br />

• 25% wear <strong>and</strong> tear allowance on plant, machinery <strong>and</strong><br />

equipment acquisition<br />

• greater petroleum product exports<br />

• lowered dependence on petroleum imports<br />

• increased employment opportunities<br />

• compliance with COP 21 ratifications<br />

• crucial support for national development<br />

• technological progress.<br />

Future initiatives for RE <strong>and</strong> EE must<br />

address issues related to feed-in tariffs,<br />

net metering, grid capacity, infrastructure<br />

issues, <strong>and</strong> safety considerations<br />

The benefits<br />

Implementing these recommendations will benefit Trinidad<br />

<strong>and</strong> Tobago in many ways, by creating:<br />

• increased energy security<br />

• climate change mitigation<br />

• conservation of domestic hydrocarbon supply<br />

CHAMBER.ORG.TT<br />

MARCH 2019 39


COURTESY INVESTT


InvesTT<br />

Attracting<br />

the investor<br />

When it comes to inward investment, whether for export<br />

or not, InvesTT is the key support agency to deal with<br />

by Joel Henry<br />

Writer/Freelance journalist<br />

For those who underst<strong>and</strong> the<br />

needs of the economy, something<br />

exciting is happening<br />

Opportunities are abounding right<br />

now <strong>and</strong> will continue over the next<br />

two decades<br />

In 2015, the US business process outsourcing giant iQor opened a contact<br />

centre in Trinidad <strong>and</strong> Tobago. The investment brought in US$4 million<br />

<strong>and</strong> created hundreds of jobs at its local headquarters in the Tamana InTech<br />

Park. New investment, new industry, new employment <strong>and</strong> foreign exchange<br />

– the deal was a major success for policymakers <strong>and</strong> facilitating agencies such<br />

as InvesTT, <strong>and</strong> for the country itself.<br />

But what’s better than a success story? A successful second act. In 2017<br />

iQor re-invested, opening another contact centre (this time in Barataria) <strong>and</strong><br />

employing hundreds more. In total the company has invested well over US$7<br />

million <strong>and</strong> employed up to 700 people.<br />

The iQor investment is only one of many. News briefs on foreign<br />

investment <strong>and</strong> the exploits of state agencies tend not to hold the public’s<br />

attention, but for those who underst<strong>and</strong> the needs of the economy, something<br />

exciting is happening. Trinidad <strong>and</strong> Tobago, after much groundwork, is<br />

becoming recognised as a fabulous destination for investment.<br />

“There is a lot of interest in Trinidad <strong>and</strong> Tobago,” says Christopher Lewis,<br />

president of InvesTT. “We closed eight investments for the fiscal year. Our<br />

target was four.”<br />

Lewis puts the value of the investments at US$180 million, which is<br />

impressive, but their true worth goes well beyond that. Locked in dependency<br />

on its energy sector for many years, the country has been seeking ways to<br />

develop new industries <strong>and</strong> diversify the economy. It is the role of state<br />

agencies such as InvesTT, created in 2012, to facilitate that process. Success<br />

has been limited. But the times appear to be changing.<br />

“Opportunities are abounding right now <strong>and</strong> will continue over the next<br />

two decades,” says John Hadad, co-CEO of the HADCO Group. HADCO has<br />

partnered with businessman Paul Gabriel on a multi-million-dollar ice cream<br />

manufacturing venture, Creamery Novelties, which includes a TT$35 million<br />

plant. “HADCO has opportunities coming at us every single day. I would<br />

unequivocally recommend Trinidad <strong>and</strong> Tobago as an investment destination.”<br />

The role of InvesTT<br />

As analysts will point out, the country has been an attractive destination for<br />

investment for some time. Among its st<strong>and</strong>out features are its low energy cost,<br />

a well-educated labour force, strategic location (near the US, Canada, Latin<br />

America <strong>and</strong> Europe, <strong>and</strong> just outside the main hurricane belt), relatively strong<br />

CHAMBER.ORG.TT<br />

MARCH 2019 41


Blueprint for a Bold New Economy<br />

industrial base <strong>and</strong> infrastructure, stable government, <strong>and</strong><br />

an enticing culture.<br />

At heart, Trinidad <strong>and</strong> Tobago’s problem with<br />

attracting foreign investment is that, outside the energy<br />

sector, the country hasn’t been spending a great deal<br />

of effort looking for it. This legacy manifests itself in<br />

the bureaucratic hurdles to doing business. “Inefficient<br />

government bureaucracy” is listed as one of the most<br />

problematic elements of doing business in Trinidad <strong>and</strong><br />

Tobago in the World Economic Forum in the Global<br />

Competitiveness Report.<br />

The problem with attracting foreign<br />

investment is that the country<br />

hasn’t been spending a great deal<br />

of effort looking for it<br />

“From an investment point of view it is challenging,”<br />

says Ashley Parasram, founder of Trinidad <strong>and</strong> Tobago<br />

Fine Cocoa Company (TTFCC), a bean-to-bar chocolate<br />

manufacturer headquartered in Piarco. “But I think people<br />

are aware of the challenges <strong>and</strong> working to address them.”<br />

Being the bridge between the investor <strong>and</strong> the many<br />

offices of the state is one of InvesTT’s most important<br />

functions. “That’s one of the main reasons investors come<br />

to us,” says Christopher Lewis. “We help them navigate<br />

InvesTT’s investment picks<br />

Where does InvesTT see strong investment potential?<br />

➤ Maritime services “Transshipment has been big for us,”<br />

says Christopher Lewis. “One investment that we closed this<br />

fiscal was with Transocean for a cold stacking (parking of<br />

merchant vessels <strong>and</strong> oil rigs) concern.”<br />

➤ Tourism “We have had major strides in tourism in Tobago,<br />

<strong>and</strong> now we are trying to bring Trinidad on board.”<br />

●<br />

➤ High-value manufacturing “A study was conducted on<br />

our behalf by PriceWaterhouseCoopers <strong>and</strong> investment briefs<br />

were prepared on various sectors … LED manufacturing,<br />

battery energy storage, aluminium recycling.”<br />

●<br />

➤ ICT/IT-enabled services “ICT is a strategic sector for us<br />

because with the advances in technology we cannot afford<br />

to be left behind. So we make a special emphasis on trying to<br />

increase the ICT capacity of the country through the types of<br />

investment we pursue.”<br />

●<br />

➤ What do investors want to do? “You never know where<br />

potential investors will come from. They may be in a totally<br />

different sector, <strong>and</strong> we will judge that on its merits.”<br />

Flagship building, Tamana InTech Park<br />

the bureaucratic path.”<br />

InvesTT helped TTFCC in its pre-launch phase,<br />

providing vital information on the market <strong>and</strong> procedures<br />

for setting up business in Trinidad <strong>and</strong> Tobago; it<br />

introduced them to key players in relevant agencies <strong>and</strong><br />

operated as their guide.<br />

Engaging the diaspora<br />

TTFCC is a particularly interesting venture because it was<br />

founded by a member of the diaspora. Ashley Parasram<br />

is a Trinidadian who has lived in the UK since childhood.<br />

And although the chocolate manufacturer is a business<br />

concern, he is also guided by the urge to resuscitate<br />

the country’s cocoa industry <strong>and</strong> contribute to national<br />

development.<br />

“Attracting inward investment from the diaspora<br />

<strong>and</strong> its networks is where I see the future to be. Those<br />

networks are like gold sitting there,” he says, adding that,<br />

despite the challenges of establishing a new business, “I<br />

am definitely enjoying the fact that if I wanted to, I could<br />

get to a beach very quickly.”<br />

InvesTT <strong>and</strong> its sister agencies exporTT <strong>and</strong> CreativeTT<br />

are very aware of the potential of the diaspora. In<br />

February 2018, InvesTT launched “iloveTT”, an initiative<br />

to engage the diaspora, beginning with an online survey<br />

for citizens based outside the country.<br />

Attracting inward investment from the<br />

diaspora <strong>and</strong> its network is where I see the<br />

future to be<br />

“We have built up a database of about 600-plus diaspora<br />

members,” says Lewis. “That’s InvesTT alone. By the time<br />

we add exporTT <strong>and</strong> CreativeTT, we hope we will have<br />

about 1,000 names.”<br />

So far InvesTT has received over 382 responses to<br />

its diaspora survey, 92% of which expressed interest in<br />

receiving more information. Another 32% were interested<br />

in trading with Trinidad <strong>and</strong> Tobago, <strong>and</strong> 23% in investing.<br />

At the time of this writing, Lewis <strong>and</strong> his counterparts at<br />

the other agencies were planning a webinar with diaspora<br />

members for February 2019, following a successful event<br />

in 2018 at which they were able to obtain qualitative<br />

information on diaspora interests.<br />

COURTESY INVESTT<br />

42 MARCH 2019 CHAMBER.ORG.TT


InvesTT<br />

Christopher Lewis<br />

President, InvesTT<br />

What an investor can expect<br />

“Currently we have an investor interested in a BPO (business<br />

process outsourcing project),” says InvesTT president<br />

Christopher Lewis. “They reached out to us. We sent them<br />

information relevant to the sector first, before they arrived<br />

– salary range, locations of people seeking work in<br />

the BPO field, commute times, rental costs for setting up<br />

operations. If or when they come, we meet <strong>and</strong> greet them<br />

at the airport, <strong>and</strong> facilitate their entry with Immigration.<br />

We arrange transportation. We take them to two or three<br />

potential sites, based on their requirements. Depending<br />

on the length of their stay, we will introduce them to key<br />

people – maybe in Town <strong>and</strong> Country Planning, the Ministry<br />

of Trade <strong>and</strong> Industry, <strong>and</strong> so forth. And we will of<br />

course follow up afterwards. There may be supplementary<br />

information that they need.”<br />

Lewis sees great potential in this initiative. “They know<br />

Trinidad <strong>and</strong> Tobago, <strong>and</strong> generally they are predisposed<br />

to assist. They are a skilled diaspora, skilled <strong>and</strong> well<br />

connected.”<br />

Potential<br />

“Potential” is a word that comes up often in conversation,<br />

both with InvesTT <strong>and</strong> investors themselves. There’s a<br />

fresh energy <strong>and</strong> enthusiasm for the prospects of the nonenergy<br />

sector.<br />

The InvesTT president is quick to point out that securing<br />

new investment takes time, often up to two or three<br />

years. Some of the gains being realised today are the<br />

result of efforts started years ago.<br />

But he is confident that much more can be achieved.<br />

“We are a small team but we are very impactful,” he says.<br />

“Our people are talented <strong>and</strong> have good relationships with<br />

the ministries <strong>and</strong> other agencies. We play a critical role.”<br />

And they are selling a valuable product, world class.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 43


State of the Nation<br />

Economic outlook<br />

Latin America <strong>and</strong> the Caribbean<br />

The year 2019 is poised to be a better one for the Latin<br />

American economy, after a tough 2018 characterised by a<br />

chaotic election cycle, a decline in emerging market assets,<br />

<strong>and</strong> a U-turn towards global protectionism.<br />

Regional growth (excluding Venezuela) is projected<br />

at 1.7% in 2019, 2.4% in 2020 <strong>and</strong> 2.5% in 2021. An<br />

improved labour market, reduced political noise, <strong>and</strong> the<br />

faded impact of the truckers’ strike in Brazil will chiefly<br />

fuel the region’s acceleration. To a lesser extent, faster<br />

economic growth in Chile <strong>and</strong> Peru will boost regional<br />

growth. The acceleration of growth in 2019 will be<br />

supported mainly by a rise in private consumption.<br />

Investment growth will accelerate, but at a slower<br />

pace in view of tight financing conditions <strong>and</strong> planned<br />

reductions in public spending across a number of countries.<br />

Decelerating global trade will also limit export growth<br />

during the forecast period.<br />

In the Caribbean, financing conditions have tightened<br />

against the backdrop of rising US interest rates, dollar<br />

appreciation, <strong>and</strong> weaker investor sentiment towards<br />

emerging market <strong>and</strong> developing economies (EMDEs).<br />

The region experienced a fall in equity prices <strong>and</strong> capital<br />

inflows, particularly bond flows, through the third quarter<br />

of 2018.<br />

Growth among advanced economies<br />

is predicted to drop to 2% in 2019<br />

Current account deficits have widened in most commodityexporting<br />

<strong>and</strong> commodity-importing economies. Several<br />

Caribbean economies which were not significantly<br />

damaged by hurricanes in 2017 registered narrowing<br />

deficits or widening surpluses as a share of GDP in 2018<br />

due to strong tourism inflows <strong>and</strong> rising oil prices (e.g.<br />

The Bahamas, Belize, St Vincent <strong>and</strong> the Grenadines, <strong>and</strong><br />

Trinidad <strong>and</strong> Tobago).<br />

Regional growth (excluding Venezuela) is<br />

projected at 1.7% in 2019, 2.4% in 2020<br />

<strong>and</strong> 2.5% in 2021<br />

Table 1: Latin America <strong>and</strong> the Caribbean — real GDP growth at market prices (%)<br />

Year-end<br />

Projected<br />

2017 2018 2019 2020<br />

Latin America 0.8% 0.6% 1.7% 2.4%<br />

Caribbean 3.4% 4.4% 4.0% 4.0%<br />

The domestic l<strong>and</strong>scape<br />

In September 2018, the International Monetary Fund<br />

(IMF) said it expected the Trinidad <strong>and</strong> Tobago economy<br />

to slowly recover from a deep recession, underpinned by<br />

a strong recovery in gas production.<br />

On the other h<strong>and</strong>, weak activity in construction,<br />

financial services <strong>and</strong> trade, along with foreign exchange<br />

shortages <strong>and</strong> the slow pace of public investment, continue<br />

to dampen non-energy sector growth.<br />

The IMF forecast Trinidad <strong>and</strong> Tobago’s growth in<br />

2018 at 1.0%, up from a contraction of 2.6% in 2017, <strong>and</strong><br />

2019 growth of 0.9% (see Table 2).<br />

Table 2: Trinidad <strong>and</strong> Tobago growth (IMF forecast)<br />

Real GDP<br />

growth forecast<br />

2017 2018 2019<br />

IMF -2.6% 1.0% 0.9%<br />

Global outlook<br />

According to the World Bank, global economic growth is<br />

projected to soften from 3.0% in 2018 (revised downwards<br />

to 2.9% in 2019). International trade <strong>and</strong> manufacturing<br />

activity have also softened, while trade tensions remain<br />

elevated <strong>and</strong> some large emerging markets have<br />

experienced substantial financial market pressures.<br />

Table 3: Global growth rates<br />

Economic growth rates 2018-2019 (%)<br />

2018 2019<br />

3.0 2.9<br />

Growth among advanced economies is predicted to drop<br />

to 2% in 2019. Slowing external dem<strong>and</strong>, rising borrowing<br />

costs, <strong>and</strong> persistent policy uncertainties are expected to<br />

weigh on the outlook for emerging market <strong>and</strong> developing<br />

economies.<br />

Rest of the world<br />

The IMF maintained its US growth forecast at 2.5% <strong>and</strong><br />

China at 6.2%; but lowered the euro-area outlook to 1.6%<br />

from 1.9%, <strong>and</strong> boosted Japan’s outlook to 1.1% from<br />

0.9%.<br />

The Economist Intelligence Unit (EIU), however, revised<br />

its forecast in light of the impasse over the Brexit<br />

withdrawal agreement. With the possibility of a second<br />

referendum, it is predicted that a “no deal” Brexit is a less<br />

likely scenario.<br />

The US-China trade war has begun to weigh on<br />

Germany’s economy, with both exports <strong>and</strong> imports struggling<br />

in November 2018. Industrial production contracted<br />

in November, <strong>and</strong> as a result the 2019 real GDP forecast<br />

for Germany has been revised downwards from 1.6% to<br />

1.2%. The euro zone as a whole is expected to exp<strong>and</strong> by<br />

44 MARCH 2019 CHAMBER.ORG.TT


Economic Outlook<br />

METAMORWORKS/SHUTTERSTOCK.COM<br />

1.5% in 2019, down from 1.7% as previously forecast.<br />

Fluctuations in global oil prices in 2018 have led to<br />

the revision of our local oil price forecast. Prices of Brent<br />

crude (from the North Sea between the UK <strong>and</strong> Norway)<br />

are expected to ease from US$71.1/barrel in 2018 to<br />

US$66/barrel in 2019 (the previous forecast was US$70/<br />

barrel), owing to greater than expected supplies from Iran<br />

<strong>and</strong> weaker dem<strong>and</strong> growth. We expect oil prices to slump<br />

further in 2020, to an average of US$60.5/barrel (from the<br />

US$67.5/barrel previously forecast for 2020).<br />

South Asia is set to remain relatively insulated from<br />

some of these global uncertainties, <strong>and</strong> will retain its<br />

top spot as the world’s fastest-growing region in 2019.<br />

However, the deceleration in commodity exports will stall<br />

economic growth at a weaker-than-expected 4.2% this<br />

year in the South Asian region.<br />

FDI<br />

According to the United Nations Conference on Trade<br />

<strong>and</strong> Development (UNCTAD), inflows of global foreign<br />

direct investment (FDI) continued their decline in 2018,<br />

following a 23% decrease in 2017 from the previous year,<br />

with a 41% decrease estimated for the first half of 2018.<br />

References<br />

“Expectations for Latin America’s Economy in 2019: Economic Forecasts<br />

from the World’s Leading Economists.” Focus Economics, 18 December<br />

2018, www.focus-economics.com/blog/expectations-for-latin-americaseconomy-in-2019.<br />

“Trinidad & Tobago Holds Rate, Slack Growth, Low Inflation.” Central Bank<br />

News, 28 December 2018, www.centralbanknews.info/2018/12/trinidadtobago-holds-rate-slack-growth.html.<br />

“Darkening Prospects: Global Economy to Slow to 2.9 Percent in 2019 as<br />

Trade, Investment Weaken”. World Bank, January 2019. www.worldbank.<br />

org/en/news/press-release/2019/01/08/darkening-prospects-globaleconomy-to-slow-to-29-percent-in-2019-as-trade-investment-weaken.<br />

Country Forecast – Global Outlook. The Economist Intelligence Unit, 13<br />

January 2019.<br />

In September 2018 the International<br />

Monetary Fund (IMF) said it expected the<br />

Trinidad <strong>and</strong> Tobago economy to slowly<br />

recover from a deep recession<br />

Following tax reforms implemented by the US government,<br />

the decline in global FDI in developed countries<br />

was mainly due to large repatriations of foreign earnings<br />

from affiliates of the US.<br />

CHAMBER.ORG.TT<br />

MARCH 2019 45


State of the Nation<br />

Energy update<br />

Local crude oil <strong>and</strong> natural gas production <strong>and</strong> usage<br />

➤ Figure 1 shows that the top 3 oil<br />

producers have remained unchanged<br />

from Q3 2017 to Q3 2018. It is<br />

important to note that, for the same<br />

period, Trinidad <strong>and</strong> Tobago was<br />

actually a net importer of crude oil,<br />

as shown in Figure 2.<br />

Fig. 1: Top oil producers (avg. bopd)<br />

20,511<br />

11,820<br />

11,592<br />

17,137<br />

11,984<br />

10,219<br />

ILLUSTRATIONS (ICONS): THE NOUN PROJECT<br />

Q3<br />

2017<br />

Trinmar<br />

Petrotrin<br />

Perenco<br />

Q3<br />

2018<br />

Trinmar<br />

Petrotrin<br />

Perenco<br />

Fig. 2: Imports vs exports of crude oil (bbls)<br />

7,752,250<br />

1,987,342<br />

7,218,718<br />

1,881,494<br />

Q3<br />

2017<br />

Imports<br />

Exports<br />

Q3<br />

2018<br />

Imports<br />

Exports<br />

➤ As can be seen in Figure 1, when<br />

comparing Q3 data from 2017<br />

<strong>and</strong> 2018, between the top three<br />

producers there was an average<br />

decline in oil production of 10.43%.<br />

Over the same time period there<br />

was an average 8.28% increase in<br />

natural gas output (Figure 4). Figure<br />

3 also shows that the LNG sector<br />

continues to be the major user of<br />

natural gas locally, accounting for<br />

almost 56% of total production.<br />

Fig. 3: Natural gas utilisation by sector<br />

Q3 2018 (avg. mmscf/d)<br />

3,269<br />

LNG<br />

(1,817)<br />

Ammonia<br />

(547)<br />

Methanol<br />

(444)<br />

Power<br />

(257)<br />

Refinery<br />

(96)<br />

Other<br />

(109)<br />

Fig. 4: Top local natural gas producers<br />

Q3 (avg. mmscf/d)<br />

Q3<br />

1,993<br />

2017 BPTT<br />

Q3<br />

1,974<br />

2018 BPTT<br />

513<br />

Shell<br />

531<br />

Shell<br />

527<br />

EOG<br />

474<br />

EOG<br />

Source: MEEI Consolidated Report 2017 & 2018<br />

46 MARCH 2019 CHAMBER.ORG.TT


Energy Update<br />

A comparison of Q3 2017 <strong>and</strong> Q3 2018 production<br />

<strong>and</strong> export levels for energy <strong>and</strong> downstream products<br />

Q3 2017<br />

Q3 2018<br />

Natural gas production (mmscf/d)<br />

Crude oil condensate production (bopd)<br />

80<br />

➤ A comparison between Q3 2017<br />

<strong>and</strong> Q3 2018 shows that monthly<br />

natural gas production levels<br />

improved, with the exception of<br />

September 2018 where production<br />

levels declined drastically<br />

Thous<strong>and</strong>s<br />

4<br />

40<br />

➤ Downstream products on average<br />

show decreases in production<br />

levels in Q3 2018<br />

3<br />

July August September<br />

0<br />

July August September<br />

➤ Crude oil production shows a<br />

downward trend in Q3 2018<br />

450<br />

Ammonia production (mega tonnes)<br />

500<br />

Ammonia export (mega tonnes)<br />

Thous<strong>and</strong>s<br />

400 250<br />

350<br />

July<br />

August<br />

September<br />

0<br />

July<br />

August<br />

September<br />

Methanol production (mega tonnes)<br />

Methanol exports (mega tonnes)<br />

500<br />

600<br />

Thous<strong>and</strong>s<br />

300<br />

300<br />

0 0<br />

July<br />

August<br />

September<br />

July<br />

August<br />

September<br />

Urea production (mega tonnes)<br />

Urea exports (mega tonnes)<br />

70<br />

90<br />

Thous<strong>and</strong>s<br />

40<br />

50<br />

0 0<br />

July<br />

August<br />

September<br />

July<br />

August<br />

September<br />

Source: MEEI Consolidated Report 2017 & 2018<br />

CHAMBER.ORG.TT<br />

MARCH 2019 47


The Chamber <strong>and</strong> Its Members<br />

Welcome,<br />

new members!<br />

The Chamber extends a very warm welcome<br />

to companies <strong>and</strong> individuals who have become<br />

members in recent months<br />

MCS Software Limited<br />

91 Cascade Road<br />

Cascade<br />

627-0114<br />

kent@mcssoftware.biz<br />

Dr John Gedeon<br />

Maracas<br />

St Joseph<br />

764-8113<br />

Jieovane Investments Limited<br />

O’Meara South Main Road<br />

Arima<br />

725-2929<br />

COURTESY SIMONE ANDREWS<br />

HR Management made simple.<br />

48 MARCH 2019 CHAMBER.ORG.TT


CHAMBER.ORG.TT/CONTACT-MAGAZINE MARCH 2019<br />

49


FROM THE HOUSE OF ANGOSTURA<br />

top ten BEST SELLING RUM<br />

top TEN trending RUM<br />

2019<br />

as voted by the world’s best bars<br />

2019<br />

as voted by the world’s best bars

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