Let me begin by thanking you for coming to AMCHAM T&T’s Annual Post Budget Forum.
As we have done in the past, we use this forum to invite and ignite stimulating conversation to add to the ongoing debate that will emerge from the National Budget presented in the Parliament by the Honourable Minister of Finance. Over the years, AMCHAM T&T has invited experts to present ideas on how we can help drive real change and stimulate economic growth.
After all, we believe a dynamic, private sector economy is the best measure and creator of socio-economic development.
My colleagues and I just came back from an exciting week in Washington DC last week. There we met with senior officials of the National Security Council, the State Department, the Senate, the Congress and other arms of the US Government. That country, our largest trading partner, is set for a massive strategy to promote investment in the Western Hemisphere. Unlike other countries, their strategy will rest on their private sector being able to find opportunities and then accessing some support from government institutions as opposed to the government cutting deals directly.
To make this reality, for example, their Overseas Private Investment Corporation is being re-formed and renamed. Oh, and re-capitalized from 30B USD to 60B USD. Why am I raising this in the context of our national budget? Well, to not be left behind, we must do more to become investor friendly and improve our ease of doing business. We also must have an underlying strategy and the will to make it a reality. So doing away with paper immigration forms is a great start but it’s just the tip of the iceberg. We need structural reforms. We need them now. We need them urgently.
I doubt that any of you would disagree that our economy is now in as challenging a place as it has ever been except, maybe, the period of the 80s. I say maybe because high crime, low productivity and political one-upsmanship are bigger problems today than they were then.
It is true that stabilizing the ship of state always would have been a difficult task. Let’s be straightforward, it was not prudent to increase borrowing from 41.7B in 2008 to 84.1B in 2015 during a period of increased revenue. Just as that was not prudent, it is not prudent now to expand the budget by some $3B while revenue remains depressed.
That’s really where I want to start. At the point of strategy and philosophy. The theory that government spending will lift the economy is not supported by the facts. Indeed, the opposite may be true. Continuing to fund non productive sectors of the economy and inefficiencies in various parts of the value chain, only make it harder for productive activities to flourish. I know that may seem like a whole bunch of economic jargon but simply put, by spending money on things that don’t generate revenue and by funding systems that are inefficient, it is harder for income generating activities and initiatives to bear fruit.
So remain concerned about the rising debt and, with some $5B of last year’s revenue coming from one-off sources, we encourage restraint on spending this year unless the revenue assumptions are realized. After all, that’s how we run our businesses, isn’t it? At least those of us who survive the downturns.
To realize the revenue that has been projected, the revenue authority will have to be established and operationalized in an effective manner. In the first instance, we at AMCHAM T&T call on the government and opposition to meaningfully engage on the legislative framework to make this happen and to get it done in a manner that, as far as is possible, insulates the new institution from political interference and protects our rights to privacy. This is not an issue over which either party should be seeking to score cheap political points. We urgently need reform of our tax collection agency.
Secondly, the full and speedy implementation of the procurement legislation with, as the Minister of Finance said, regulations covering the disposal of government land and G2G contracts along with an e-registry of public contracts, will go a long way to fighting corruption and improving the value derived from government spending.
We hope that the announcement about improved efficiency of the justice system – both criminal and civil – will result in action that speeds up the administration of justice. Economic growth requires a fair society for all and both our criminal and civil courts are, in many cases, effectively denying justice by virtue of delaying justice.
We welcome what we see as the government’s commitment to advance the digital transformation of the public sector. Not to boast, but I do feel obliged to remind you that this topic has been one of our cornerstone issues for which AMCHAM T&T has been leading the national debate.
Just this year we hosted our nation’s first ever Tech Hub Islands Summit (t.h.i.s.) conference. Our goal with hosting this conference was meant to bolster our market share, support our clients, and build strategic alliances and partnerships. More than this, what we really wanted to show, is that the Tech industry remains a major untapped pillar for a diversified economy especially as we seek to move our nation towards a non-energy base.
We have long said that greater investment in the tech industry can attract both local and foreign investment and increase competitiveness. Government’s efforts towards digital transformation of the public sector, in particular the linking of the birth certificate personal identification number to the death registry with the objective of simplifying pension payments is a small and significant step towards ensuring the ease of doing business. However, we must go further and expand this to a unique national identifier and legal digital identity.
Moreover, a commitment to a national open data policy and making government data available online, across a single, manipulatable platform would be a huge step forward and requires relatively little, if any, expenditure. What about blockchain and crypto-currencies. Where are we with policies around the latter and how are we supporting moves to speed up the adoption of the former?
We welcome the Styrofoam ban and encourage it to be an across the board ban and not just on imported Styrofoam. The move toward energy efficiency in government building as well as reduction of single use plastics there is very much welcomed. While people joke about moving from incandescent to LED lightbulbs, if this is implemented properly, it can be a major step toward energy efficiency, which both reduces environmental impact and frees up gas from T&TEC to be used in other, revenue generating industries.
However, we need to complete the beverage container bill, feed-in tariff legislation to allow individuals to generate renewable power and sell back to the grid and the legislation that would allow energy audits and certification for the implementation of tax relief for green buildings. We look forward to fair and properly enforced water pollution rules in the coming year.
Through twenty-two years of delivering advice and leadership with our annual Health, Safety, Security and the Environment (HSSE) Conference & Exhibition, AMCHAM T&T has a long history advocating on issues relating to human health, safety and the environment. Therefore, any policy that places environmental concerns over short-term profits is a policy worth championing. We understand that citizens may not see the immediate benefits of these measures, but we do believe a nation that seeks to adopt policies that will protect our future generations is poised for continued growth and success.
On the issue of VAT refunds, we welcome the government’s acknowledgement that these must be settled. We also appreciate the Minister is seeking creative ways to do so without affecting the Government’s cash flow. We await the details of the proposed bonds as we are unsure if they will assist businesses who need their cash for operations and because the amount he proposed is less than the total amount of refunds owed. Such a solution also does not address interest on the refunds.
Having said all of that, we at AMCHAM T&T believe that T&T is still a good, if challenging place to do business. We believe that we have some advantages, starting with our people, our level of business sophistication and our location, that will never go away. However, we need to deal with our realities and implement sometimes difficult but necessary cross cutting reforms. With an aging population and underfunded pension systems, we absolutely need to act now. We need that migration policy that I always speak about.
We raise these issues because we care. Because we are emotionally and financially invested here and want to deepen that even further. We look forward to the rest of the discussion today and to working with all of you and the various arms of the government as we seek to make T&T an even better place to do business and to live!
Thank you for your attention.
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