AMCHAM T&T’s ANNUAL POST BUDGET FORUM 2020
Patricia Ghany, President of AMCHAM T&T
Good morning ladies and gentlemen and welcome to AMCHAM T&T’s Annual Post Budget Forum.
I want to begin today by taking you back to our first AMCHAM event for 2020. At our Economic Outlook Forum in January, I reported some sobering statistics concerning how we ended 2019 as it relates to our crime rate, ease of doing business ranking and corruption perception index rating.
Despite these figures there were some positive signs that showed T&T moving in the right direction to once more becoming a resilient economy, even though we knew we had a lot of work to do. The past seven months have not been easy for anyone. So much has either been changed or disrupted. There is no telling how long it will take for us to get past this pandemic, either economically or emotionally. But we cannot afford to lose hope. We must continue to show strength, agility, and resilience in our efforts to bounce back and rebuild what we lost –even better.
We knew this budget wasn’t going to be the quick fix to all our problems. We understood that the Government is facing a herculean task to right this ship and return T&T to a path of growth and prosperity. And we knew our physical and economic survival meant having to put aside our differences and start the process of working together. That’s something we needed to do before the pandemic and especially after a vaccine is discovered.
Against the backdrop of another deficit budget and a projected contraction of the economy, estimated at 6.8 percent for 2020, we still feel optimistic for the future. The budget statement delivered by the Minister of Finance on Monday has outlined some promising initiatives that could set the platform for future growth.
This is where I want to really begin my analysis. Our theme for today’s Post Budget Review is: “Recovery to Transformation”. Given where we are today because of this pandemic, the goal moving forward is really about stimulating the economy, enhancing social development and improving the business environment. How do we accomplish this amidst declining oil and gas prices, and a pandemic that has disrupted supply chains, elevated social unrest, and crippled economies around the world?
EASE OF DOING BUSINESS
Improving the Ease of Doing Business is now key. As a pre-requisite of a more attractive business environment, our country’s Economic Recovery Plan must have clear objectives related to improving quality of life and social harmony. We listened attentively to the Minister’s statement and while we reserved clarification on some matters, we were also pleased with some of the measures laid out to improve the ease of doing business in T&T.
As many of you would know, AMCHAM T&T has been leading the conversation around digital transformation. Before COVID, it was our advocacy on this subject through the hosting of the nation’s first-ever Tech conference, and several informative Webinars this year which have magnified the push for the digital transformation of the private and public sector.
Government’s commitment to the digital transformation of the economy in their budget statement is a welcome and positive step that will ensure increased growth and revenue. But we must get it right! Digitizing parts of our public sector cannot just be part of the short-term goal to recovery. We must build a fully digitally based, enabling economy that will not only improve the ease of doing business but secure our nation’s economic future through the creation of new and exciting jobs, boosting of entrepreneurship, and building the talent pool through innovation and competitiveness.
The incentives in the budget through grants for start-up businesses, and tax credits to businesses to invest in tech start-ups or new tech businesses will act as a viable source for revenue, open the job market to many young professionals, and commit our nation’s future to a digitally-based economy where the opportunities seem endless. These are all great initiatives we have championed, and we are proud to see the government move in this direction.
Additionally, government’s commitment to an e-payment gateway for government services, national e-identity, a unique national identification number and the use of virtual courts can all be transformative for both individuals and businesses in all sectors. These are all key steps we have recommended many times before and which we believe will be dependent towards building a digital-based economy that will improve the ease of doing business in T&T. We trust that the Minister of Public Administration and Digital Transformation will give specific timelines for implementation, inclusive of appropriate and meaningful consultation with stakeholders.
Further commitments to tackle specific impediments to the ease of doing business such as the time taken to get permits, modernization of the Port of Port of Spain and liberalization of the fuel market, which we trust will be done in an orderly and transparent manner, are all welcome.
We look forward to hearing more during the budget debate on the reform and modernization of Customs. Critical in this is a robust and effective risk-based framework that would remove from the examining officer the discretionary power to inspect packages except in very specific circumstances. This will discourage corruption and enhance efficiency.
Further, we strongly recommend the introduction of a diminimis value of USD 400 for imported items and a return to the 2011 system that allowed commercial packages with a value of less than TTD20,000 not requiring a customs entry. These too will improve the ease of doing business and have a minimal impact of government revenue.
Collaboration must be our new watchword if we are to realize this recovery to transformation goal. We cannot fulfil any of these policies if there isn’t greater collaboration by way of meaningful dialogue between all the stakeholders i.e. the state, business sector, labor and civil society. We know we have said this before, but the current situation is demanding that we put aside our differences and work together to ensure all sectors of the economy have a fighting chance against the impact of this pandemic. Often all of us want the same things but would like to take different routes to get to our destination. Through dialogue and the building of trust, we will rebuild better and stronger.
For any of this to happen we must ensure the recovery efforts are centered on a sound legislative agenda that compliments many of these projects. Tax collection will have to be enhanced in order to widen the tax net in order to realize projected revenue.
Now is a time for leadership. Not just in the Government but by all in positions of authority. Therefore we cannot underscore, once again, the importance of the government and the opposition working together particularly at this crucial time to pass critical pieces of legislation to enable more efficient tax collection, the full operationalization of the public procurement legislation, the creation of the National Statistical Institute, passage of the Bail Amendment Bill and overall improvement in the ease of doing business.
Diversifying the energy services sector as a key source for sustainable growth with the plan to develop T&T as a regional hub for energy services, particularly in the emerging markets of Guyana and Suriname will bode well for our longevity in the sector.
However, we urgently need to make critical decisions around the gas value chain to keep investment flowing into the upstream as well plants operating in the mid stream and downstream in the medium term.
As we set to host our 24th Annual HSSE Conference later this month, we are also happy to see government’s re-commitment to the Paris Accord through the implementation of the renewable energy electric power grid which would be the largest solar project in the Caribbean, and the introduction of green petrochemicals. We also hope to see the introduction of feed-in tariffs to allow the true opening up of the sector. We look forward to hearing more about these projects particularly in reference to the creation of sustainable jobs.
Still, while all of this rings positive, AMCHAM T&T remains cautious about the Minister’s revenue projections given that we only managed to raise $32.5B in fiscal 2020 and we are still being affected by the COVID-19 pandemic. Admittedly, without access to all of the information that the Minister used to calculate his revenue projection, we are somewhat worried that this target is overly ambitious and may force the government to undertake further borrowing or mid-year cuts that could undermine the attempts at recovery and transformation.
In closing, we understand that there are some challenging times that lie ahead for our nation. But we also know that our stable democracy, strategic geographical location, business sophistication, and innovative people will provide the right ingredients to help us weather any storms that we may face.
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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