AMCHAM T&T ADVOCATES FOR PASSAGE OF FATCA LEGISLATION
The American Chamber of Commerce of T&T (AMCHAM T&T) strongly urges the Government and Opposition to work together to ensure the passage of the Tax Information Exchange Bill 2016 (commonly referred to as the FATCA legislation) by the deadline date of September 30th, 2016.
We are of the view that our country is on the brink of being demoted to the periphery of the global financial system largely due to inaction on the part of politicians on both sides of the political divide. This is a crisis manufactured by politics to the detriment of the national interest. The former Government had ample opportunity to pass this legislation during its tenure, and the current Government has also had more than a year to ensure that this important piece of legislation was properly vetted, reviewed and passed.
We are mindful that there has been limited, if any, consultation with stakeholders on the legislation which is currently before the House. However, AMCHAM T&T is of the view that there is still enough time for both the Lower and Upper Houses of Parliament to complete deliberations on the Bill and to ensure its passage before the 30th September 2016 deadline. The foregoing is critical since there has as yet been no indication that an extension of time is being contemplated by the U.S. Government.
Should this Bill not be passed by the deadline, the costs of participating in the international financial system can be impacted and ultimately, a possible loss of correspondent bank relationships could occur if this and other obligations are not met which could, in turn, lead to difficulties in conducting, for example, credit card transactions and wire transfers. This would mean that everything from buying goods or services online, to transferring money to pay university fees or purchase inputs for businesses would be affected. Potential shortages and consequential increases to the prices of goods and services already in scarce supply would also arise over time as a consequence of the deadline not being met.
AMCHAM T&T is mindful that once the Bill is passed, guidelines for compliance will be developed by the regulators of financial institutions, the Central Bank of Trinidad and Tobago and the Securities Exchange Commission of Trinidad and Tobago. To this end, we encourage stakeholder involvement in the early stages of the development of these guidelines.
We caution that once this piece of legislation is passed, other critical pieces of legislation require urgent attention to ensure that Trinidad and Tobago comply with anti-money laundering and counter-terrorism financing obligations. Failure to do so would continue to jeopardize our country’s links to the international banking system.
Several CARICOM countries, including Jamaica, Barbados and the Bahamas, have already passed their ‘FATCA’ legislation. It is our view that legislators on both sides of the aisle should put country first and work toward the passage of this legislation by the deadline. The consequence of inaction is not something that we can either afford or entertain.
AMCHAM T&T – ‘BREXIT’ LONG-TERM IMPACT STILL UNCLEAR
As a very open, small island economy, which has deep political and economic ties to the United Kingdom, the results of the UK referendum on that country’s membership in the European Union will undoubtedly have an impact on Trinidad and Tobago and the Caribbean. The real, long-term impact is unlikely to be clear for some time however.
Nonetheless, with the UK voters casting their ballots in favour of a “BrExit”, and while we await the vote being taken to the Parliament and the UK invoking Article 50 of the Treaty on European Union to allow for that exit, the Caribbean has several things to consider.
The first group of issues surround competitiveness. Concomitant with the victory of the “Leave” vote, the British sterling faced a sharp decline, reaching levels that it had not seen since the 1980s. The question of where the pound will settle and how long the volatility will persist is of some concern for several reasons. While a decline in the value of the pound may provide new opportunities for local businesses to source inputs from Britain and elsewhere in the UK, a sustained decline in value may also pose additional challenges as UK exports become cheaper and more price competitive, even in local markets. This will include services exports as the UK is second largest services export economy globally.
With a decline in the purchasing power of the British Sterling comes an attendant threat to regional tourism as the cost of a Caribbean holiday for UK travellers will increase. This is important because according to data on the Tourism Development Corporation website, the UK is our third largest source of tourists over the past decade. In raw numbers, on average over the past decade, 38,000 UK nationals visited T&T per year. Assuming that this number will fall if the cost of travel increases due to a devaluation of the UK currency, T&T will have to look for alternative markets. We therefore suggest that renewed efforts be placed on attracting tourists from near markets in Latin America and new markets in North America. In this regard, establishing Piarco International Airport as a pre-clearance port to the United States would be particularly valuable.
In the medium term, another area of uncertainty for the region is in our trade arrangements. Currently 15 Caribbean countries are in an Economic Partnership Agreement with the EU, which allows for preferential trade and in some areas asymmetrical benefits (i.e. terms of trade that benefit the CARIFORUM more than the EU). Note here that the Parties to the EPA are 15 individual Caribbean States while on the other side, it is the European Community; and “Contracting parties to the Treaty establishing the European Community and the Treaty on the European Union” (i.e. not individual EU member states). If the UK is no longer a member state of the EU, then the applicability of the agreement to the UK comes into question.
Apart from the EPA, there is no legal framework allowing for preferential treatment between the UK and the English-speaking Caribbean. While we anticipate that the UK, being a longstanding development partner with the region, would not let our relationship wither, a strategy to prevent any negative impact of the Brexit and ensure the continuation of legal (in the context of the WTO) preferential trade, with the necessary certainty and predictability, should be devised quickly. Since CARICOM negotiates international treaties as a bloc, regional governments will need to move quickly to devise and execute a strategy to engage with both the EU and UK throughout the BrExit process.
Article 233 of the EPA – Definition of the Parties and fulfilment of obligations – states that:
Contracting Parties of this Agreement shall be Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Lucia, Saint Vincent and the Grenadines, Saint Christopher and Nevis, Surinam, and Trinidad and Tobago, hereinafter referred to as the “CARIFORUM States”, on the one part, and the European Community or its Member States or the European Community and its Member States, within their respective areas of competence as derived from the Treaty establishing the European Community, hereinafter referred to as the “EC Party” on the other part.
Article 245 – This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Community is applied and under the conditions laid down in that Treaty, and on the other hand, to the territories of the Signatory CARIFORUM States. References in this Agreement to ‘territory’ shall be understood in this sense.
Date: Thursday 12th May, 2016
Event: AMCHAM T&T Annual General Meeting 2016
Address by AMCHAM T&T President Ravi Suryadevara
Ravi Speech Luncheon AGM 2016
T&T OFF INTELLECTUAL PROPERTY WATCH-LIST
The Special 301 Report of 2016 was recently released by the Office of the United States Trade Representative. The annual report identifies barriers to trade posed by inadequate or ineffective intellectual property law enforcement in other countries. This year, the report reviewed the protection and enforcement of Intellectual Property Rights in 73 of the US’s trading partners including Trinidad and Tobago. In the latest report, Trinidad and Tobago has been removed from the Watch List. This is extremely gratifying for us at AMCHAM T&T.
Trinidad and Tobago, along with CARICOM counterpart Barbados, appeared on the Watch List in 2013 (only one other CARICOM country, Jamaica, has been on the Watch List, dating as far back as 2006). In the release of the 2016 Report, 15 countries in the Western Hemisphere have been flagged. These include three countries on the Priority Watch List (Argentina, Chile and Venezuela) and the remaining 12 (including Jamaica and Barbados) on the Watch list.
AMCHAM T&T played a critical role in bringing stakeholders to the table, to ensure that IP infringements were duly mediated, and in that regard AMCHAM T&T would like to recognize the Telecommunications Authority of Trinidad and Tobago (TATT) for their action in addressing some of these challenges. AMCHAM T&T also engaged with the US Embassy during the Special 301 consultation process. We also advocated for our removal from the list at our various meetings in Washington DC at the US Chamber of Commerce and with US policy-makers. We remain committed to working with the private sector, regulatory agencies and government bodies to resolve potential barriers to trade and to improve the efficacy of our IP regulation system, which we must do even more effectively to stay off of the Watch List.
The Special 301 Report provides national and global policymakers with a roadmap to develop a stronger IP system and should engender not simply a reaction to a U.S. government report, but spur a deliberate investment in the innovative future of our own economies. Remaining off this list and similar categorizations means stronger IPR enforcement, protection and sensitization among stakeholders.
BILL TO SUPPORT DEEPER CARIBBEAN-US RELATIONS CLEARS US CONGRESSIONAL COMMITTEE
In other US-policy news, a bill to increase engagement with the governments of the Caribbean, the Caribbean diaspora community in the United States and the private sector civil society in both the US and the Caribbean has been introduced in the US House of Representatives. The Bill can be cited as the United States – Caribbean Strategic Engagement Act of 2016. It was sponsored by Congressman Eliot Engel and co-sponsored by Congresswoman Ileana Ros-Lehtinen. Undoubtedly, AMCHAM T&T along with the SOCA member organizations have been working to keep, not only Caribbean trade in services with the US, but general US – Caribbean relations on the front burner.
If passed, the Bill would require the Secretary of State and the Administrator of the U.S. Agency for International Development (USAID) to submit to Congress a multiyear strategy focused on: outreach to the countries of the Caribbean and diaspora communities in the U.S., improving energy security, countering violence, ramping up diplomacy, and other priority areas. These priority areas include support for regional economic, political, and security integration efforts in the Caribbean region; encouraging sustainable economic development and increased regional economic diversification and global competitiveness;
In addition, the Bill requires the Government Accountability Office to produce two key reports: An evaluation of the Caribbean Basin Security Initiative (CBSI) and a breakdown of CBSI assistance provided to each country; and an evaluation of U.S. diplomatic engagement with the Eastern Caribbean. The former would undoubtedly assist Trinidad and Tobago as we attempt to tackle drug and arms trafficking and rationalize programs and spending in the fight against crime.
According to Representative Engel, “While they are sometimes overlooked, the countries of the Caribbean are profoundly important to the United States, and particularly to the many Caribbean-American citizens in the United States. With so many crises around the globe that demand U.S. attention, we can’t lose sight of our long-term interests closer to home but should instead strengthen and expand ties with our Caribbean neighbours”.
The multi-year strategy for United States engagement with the Caribbean region is to be submitted to the appropriate congressional committees no later than 180 days after the date of enactment of the Act.
We at AMCHAM T&T intend to continue our engagement with Congress as we further develop our SOCA proposals for increasing business activity between the Caribbean and the US. We would be grateful for feedback or suggestions from our members in this regard.
Please read some of the SOCA background work at http://www.amchamtt.com/business-leaders-talk-us-caricom-services-trade-in-washington-advancing-soca-services-of-the-caribbean/ and let us know what we can do to create more opportunities for your businesses.
Read the full text of the bill here: https://democrats-foreignaffairs.house.gov/sites/democrats.foreignaffairs.house.gov/files/United%20States%20-%20Caribbean%20Strategic%20Engagement%20Act%20of%202016.pdf
AMCHAM T& T WELCOMES THE NEW US AMBASSADOR TO T&T
The American Chamber of Commerce of Trinidad & Tobago would like to extend a warm welcome to His Excellency, John L. Estrada on his appointment as the new US Ambassador to Trinidad & Tobago.
Since its inception 24 years ago, AMCHAM T&T and the US Embassy have cultivated a close working relationship. This relationship remains important as the United States maintains its position as Trinidad and Tobago’s largest trading partner. This and other issues were discussed when the Ambassador met with Ravi Suryadevara and Nirad Tewarie, AMCHAM T&T’s President and CEO, earlier in April, 2016.
On welcoming the US Ambassador to Trinidad & Tobago, Suryadevara said: “It was clear in our initial meeting that AMCHAM T&T and Ambassador Estrada have shared priorities. His wide ranging expertise and energy will undoubtedly amplify an already strong relationship that AMCHAM T&T shares with the embassy, and further increase business and trade ties between our countries”.
A son of the soil, the Ambassador, was born and raised in Laventille, Port of Spain. He would later emmigrate with his family to the United States at the age of 14. A true success story, Ambassador Estrada has had many professional achievements throughout his career. He has served as a Presidentially-appointed Commissioner on the American Battle Monuments Commission; as a Committee Member of the Defense Advisory Committee on Women in the Services; a member of the National Board of Directors for Operation Homefront; and on the Executive Committee for the United Services Organization. Ambassador Estrada also has a Bachelor’s degree in Business Management from the University of Phoenix.
Prior to his confirmation, Ambassador Estrada was Senior Manager for Lockheed Martin Training Solutions. Ambassador Estrada served in the U.S. Marine Corps for 34 years, most notably as the 15th Sergeant Major of the United States Marine Corps – the nation’s highest-ranking enlisted Marine.
As The Pathway to the Americas, AMCHAM T&T continues to widen its scope of involvement and engagement with its counterparts in the Western Hemisphere, and as such remains committed to deepening its connection with the United States of America.
His Excellency is scheduled to be the feature speaker at AMCHAM T&T’s 23rd Annual General Meeting, which will take place on Thursday 12th May, 2016 at the Hilton Trinidad & Conference Centre.
AMCHAM T&T’S INITIAL RESPONSE TO THE 2016 MID-YEAR REVIEW:
NEED FOR FURTHER ADJUSTMENT
The American Chamber of Commerce of Trinidad & Tobago continues to appreciate the difficult position that the Government has faced in the past six months. We understand the delicate balance that exists in trying to stimulate economic growth, social stability and encourage trade and investment.
We recognize the adjustment of the oil and gas prices assumption to more prudent figures of $35 per barrel and $2 per mmbtu natural gas as a necessity of the current circumstances. In light of the prevailing economic conditions, AMCHAM T&T supports the reduction in the fuel subsidy.
AMCHAM T&T would like to see more definitive and strong actions with respect to the further diversification of the economy. Focus should be targeted towards the areas that are intended to act as a buffer while tax revenues from the energy sector are projected to remain low.
We are grateful that the Minister recognizes the delay in meeting the statutory timeline for VAT refunds and the burden it places on businesses. However, systemic challenges within the BIR necessitates that more than legislative amendment is required to alleviate the challenges that stakeholders face. We are hopeful that the penal provisions against the State for delay in VAT refunds is unaltered in the amendment. We continue to advocate for the formation of the Revenue Authority and for the introduction of other mechanisms to increase the efficiency of tax revenue collection, as AMCHAM T&T highlighted in previous budget submissions in much detail.
The foreign exchange rate, articulated by the Minister of Finance is a step towards finding a balance in satisfying foreign exchange demand. We remain vigilant in the near term to monitor the effects this has on the wider community, to determine what further action is required.
AMCHAM T&T requests of the Minister of Finance to carefully consider the government’s position on the application of the 7% levy on online purchase on retail companies not resident in T&T. Internet shopping has proven to increase efficiency in spending, by lowering cost overall and increasing choice to the end consumer. There is a global shift to internet shopping migrating from traditional retail. Government agencies currently benefit from internet sourcing and purchases both in revenue generation by actually offering internet shopping as a revenue earner, and as a cost reduction mechanism, in sourcing critical parts for police vehicles, ambulances etc. There is a greater need for efficiency in Customs. Many other smaller CARICOM economies, have implemented a de minimums system, freeing up the system to increase efficiency, rather than adding more taxes. This tax or any additional on-line tax will significantly impede a growing industry which employs hundreds of people directly and more indirectly in light of the Government’s need to create new revenue streams.
AMCHAM T&T remains committed to working with the government in addressing the present economic challenges. We recognize the Government’s effort in bringing a measure of balance to the present circumstances and avail ourselves to dialogue on the way forward.
AMCHAM T&T was asked to provide comments on the Whistleblower Protection Bill 2015 for the Joint Select Committee for their consideration. The comments which are outlined below provide a number of section specific suggestions that we believe would further aid in protecting whistleblowers as well s general comments as it relates to the implementation and enforcement of the law.
It should also be a requirement that the reasons for determining whether or not the external disclosure should be made, should be set out in writing.
AMCHAM T& T Promotes Diversity And Inclusion At Annual National Youth Productivity Forum
“No one person or select groups within society should be discriminated against based on gender, geography, sexuality, race, political affiliation and so on.” These were the words of Nirad Tewarie, CEO of the American Chamber of Commerce of Trinidad & Tobago as he delivered remarks at the Opening Ceremony of AMCHAM T&T’s National Youth Productivity Forum (NYPF). Now in its seventh year, the forum was launched at the University of Trinidad & Tobago’s (UTT), Valsayn Campus on Wednesday 27th January, 2016 under the patronage of His Excellency, The President of the Republic of Trinidad & Tobago, Anthony Carmona, SC.
The annual event features some of the best and brightest students from diverse geographic regions of T&T, as they seek to critically analyse and discuss societal issues that are of national and global importance. This years’ theme ‘Diversity…Inclusion … towards a more productive Trinidad and Tobago’ was chosen as AMCHAM T&T believes this topic is pivotal to the sustainable development of Trinidad &Tobago. It is the hope of the organisation that by engaging young people in open and meaningful dialogue, it will enhance their education and understanding of these issues and its implications for our economy.
Mr. Tewarie emphasised “that diversity, inclusion and tolerance” were critical elements to adopt as Trinidad and Tobago is now at an economic crossroads. He stated: “At this juncture in our economy we must focus on being competitive. One means of doing so is to ensure that we are able to embrace everyone in society who is willing and able to contribute.” He noted that increasing the productive capacity needed to bolster T&T’s competiveness may be hampered if we continue to exclude marginalized groups. These persons may then be forced to depend on state benefits, charity or casual work with marginal remuneration, which in the end does not promote financial independence. He also advocated for the inclusion of all groups in society to participate fully in promoting equality for all.
“I would like to state categorically that we at AMCHAM T&T are of the view that Trade Unions are a partner in development” said Mr. Tewarie. He further stated, “we firmly believe that with sincerity of purpose…..business and labour can work harmoniously to come up with solutions that would lead to a more competitive and productive Trinidad & Tobago”.
In a display of his dedication to the project and the young people of this nation, President Carmona spent over an hour greeting and chatting individually with each student participating in the forum.
Professor Dyer Narinesingh, President of the University of Trinidad & Tobago in his address promoted the idea that “knowledge is the new natural resource”. He explained this idea by stating that “knowledge fuelled by power and fuelled by imagination in a creative, innovation and entrepreneurial workforce (all of which) will lead to the appreciation of the diversity of our people and the diversification and growth of our economy”.
David Belgrave, CEO of Massy Technologies InfoCom (T&T) Ltd applauded the efforts of the teachers and the students over the years, as he has seen first-hand the growth of the students during program. He urged the business community to support programs like the NYPF and to heed the messages of diversity and inclusion.
The model of the NYPF, which targets students between the ages of 16 to 18 years in all secondary schools in the country, is multifaceted and comprises of Discussion Rounds, an Online Component, a School’s Business Project and Internships during the July/August vacation.
The schools participating in this year’s competition are: Queen’s Royal College; St. Joseph’s Convent Port-of-Spain; Holy Name Convent, Port-of-Spain; Woodbrook Secondary School; Eldorado East Secondary School; Arima Central Secondary School; Toco Secondary School; Coryal Secondary School; Cowen Hamiliton Secondary School; ASJA Girls College, San Fernando; Shiva Boys Hindu College, San Fernando; Presentation College, Chaguanas; Waterllo Secondary School; Trinity College, Moka and ASJA Boys College, Chaguanas.
Sponsors for this year’s National Youth Productivity Forum include Platinum sponsors First Citizens and Ezone, other sponsors G-TECH, EOG Resources and ABT Engineers and Constructors Limited. Partners include UTT, Massy Technologies Limited, YTEPP Limited and The Trinidad & Tobago National Commission for UNESCO.
Event: The Economic Outlook 2016
Date: Friday 15th January 2016
Remarks by: Ravi Suryadevara, President, AMCHAM T&T
Topic: “The New Economic Reality – Imperatives for Competitiveness”
Good morning ladies and gentlemen.
On behalf of the Board of Directors and the Secretariat of AMCHAM T&T, to those present and the wider community of Trinidad and Tobago, best wishes from all of us to all of you. The task at hand is one that admittedly brought trepidation initially but transformed to hope as I concluded preparations. Building on last year’s Economic Outlook event themed “Is the glass half-empty or half-full?”. At the present time, we at AMCHAM T&T are of the view that the glass is half-full. There is yet time and opportunity to chart the future for the country that is grounded in the New Economic Reality.
The New Economic Reality is that, globally, economies are more integrated through trade, investment and financial systems today. As a consequence even remote geographic events ripple through our economy in measures of time that are becoming shorter and shorter. Not only change but also rapid-change, volatility, are features that take effect on modern day planning and policy consideration.
Within the hemisphere and globally, the United States of America has been the dominant resurgent economy. It has evolved from being a country whose domestic crude and liquids production went from about 8.5 million bpd in 2007 to just over 14 Million bpd in production by 2014. Notably in crude oil production terms alone, the resilience of shale production through 2015 helped maintain domestic US crude production over 9 Million bpd. While it is expected for production to fall in the foreseeable future with the current price level, in-spite of the production correction, US domestic production is here to stay and stay at significant production levels.
Further, in December 2015, the United States of America lifted the export ban on crude that had been in place since the mid-1970’s response to the Arab embargo. This would allow US companies to export as early as August almost 700,000 barrels of oil daily, under the guidance of the US Commerce Department’s Bureau of Industry and Security. Further, US proved gas reserves alone crested 380 tcf by the end of 2014 and this is expected to rise in the coming years adding to the over 39 billion barrels of oil yet to be produced. Clearly this merits our attention in how we position and treat with what is already our largest trading partner with still favourable balance of payment terms.
In the near-term, expecting a Venezuela that re-aligns itself to economic growth and investment also seems quiet plausible. Even in the post-2017 recovery period, cetirus paribus, “lower for longer” in prevailing commodity pricing is also the generally accepted position. So what of our comparative and competitive advantage that we as a nation have enjoyed over the years?
AMCHAM T&T reiterates the resilience of our local energy sector, its constituent companies and the yet untapped potential within our borders. AMCHAM T&T over the years has advocated diversification within the Energy sector as much as away from over reliance on it. At the present time, continuity in projects to bring much needed reserves on-line needs to be in alignment with the recognition of the competitive landscape in attracting FDI, especially in the Energy sector. Foreign Direct Investment and Domestic Private Capital in other sectors are also faced with multiple competitive options and Trinidad and Tobago needs to be positioned attractively and regulated soundly to continue to encourage investors to come to our shores.
Persistent fiscal deficits since 2009 limit the response options of the government, the year being the culmination of the Great Recession in the US and the beginning of the global challenges of the sub-prime mortgage contagion. It is déjà vu. In 2009 Trinidad and Tobago realized a shortfall of projected revenue of just around $9.5 Billion TTD, emanating from a shortfall in tax collections from Oil Companies to the tune of approximately $5 Billion TTD. In 2015, the country realized a shortfall in current revenue of a just under $8.5 Billion TTD, with the commensurate fall in Oil Company Tax revenue to the tune of approximately $6.5 Billion TTD.
Upon assessment of government revenue in relation to economic output, measured in GDP at market prices, the contraction of economic output is clearly seen post 2009, and is expected to be seen in 2015. The 2015 value is an estimate from the World Bank but intuitively one deduces the position to be lower than 2014 simply because of prevailing market prices. Also of interest is the period post contraction. Note should be taken on the length of time it takes to recover to former positions of output.
While Trinidad and Tobago weathered the 2009 storm, it was not without consequences. The country’s debt position has escalated through the period. The addition of the CLICO and HCU Bonds for the CLICO Bailout resolution in 2012 alone added some $20 plus Billion in debt with the commitment that such debt would have been accounted for from the proceeds of sales of CL Financial assets. This did not materialize and with the present budget scenario espoused by the Minister of Finance, we do not foresee this debt reduction as initially planned as some of these funds are to be used for budget support. Further, there exists another approximately $30 Billion TTD in contingent liabilities representative of state sector and statutory body debt that has accumulated over successive administrations of government, each one burdening the next with more carrying debt.
Through the same period, 2000-2015, government expenditure has generally expanded, with two notable but nominal dips. The growth of expenditure was fuelled through debt without the commensurate productive output increase. However, you would note the growth in the cost of government operations. Government’s consumption of goods and services in the provision of services to citizens has escalated from $4.044Billion TTD in 2007 to $7.8 Billion TTD in 2015. This item of expense and personnel costs of expense account or almost 1/3 of government expenditure in the 2016 projections.
Habits of expenditure are most difficult to change but a reality check is most necessary at this time. Individual and institutional responsibility must be exhibited firstly to understand the severity of the situation. Thereafter, we need to recognize the opportunity as a nation to form a consensus in breaching the “Dutch Disease” that has been both boon for and bane of our economy.
The government, by setting the example of the socio-economic discipline required, can manifest this breach of the “Dutch Disease” by developing new productive sectors, with new comparative and competitive advantages. The government by focusing its efforts on a few such new sectors can bring them to fruition in the near term, as part of the New Economic Reality.
Therefore, competition and efficiency are as critical features of the New Economic Reality as are volatility and connectivity. Comparisons of one locale to another are carried out by institutions to afford investors and comparative positions on each locale. Amalgamations of these comparisons become collated into indices for relative ease of comparison. One such index that AMCHAM T&T utilizes has been and continues to be the World Economic Forums, Global Competitiveness Index (GCI). The work surrounding the index and its review are highlighted by the Arthur Lok Jack Graduate School of Business, usually in or around the last quarter of the year.
Briefly in review on the 2014-2015 report one notes it is for 2013 data so expect the coming years to have lower ratings, especially for the 2015-2016 and 2016-2017 periods. This especially prevalent due to the deterioration in the macroeconomic environment.
When one reviews the sub-components of the Macroeconomic Pillar, it becomes apparent for the deterioration. Growing near term deficits, falling credit ratings, growing debt burden, and the expected decrease in national savings as part of the HSF will be used for budget support. This last point of tapping the HSF after segregating it into two separate funds, one for Heritage and the other for Stabilization, is a very sensitive point indeed as these funds have taken over 15 years to accumulate. Whilst sensitive, the utilization of these funds require extreme diligence and the platform of the new Public Procurement regime.
At AMCHAM T&T, we have been over successive administrations advocating for positions that yield greater efficiency of public expenditure such as increasing funding to the FIU, bringing the FIB under the FIU to pursue suspicious financial activity, and increasing the resources allocated to the Auditor General. Greater oversight leads to less corruption and leakages from the system of resources meant for the common good. Greater audit and oversight ensure greater compliance and greater value for public spend.
The New Public Procurement regime will help progress many of the sub-requirements under the 1st Pillar, Institutions, working hand in hand with the proposed Internal Control Framework for financial management of state affairs. The overseer of the integrity of this mechanism is the Auditor General.
AMCHAM T&T supports the government’s view that the cost of government operations can be reduced, and has lauded the Prime Minister for his instruction to cut non-personnel expenses by 7% in the first instance. AMCHAM T&T still remains vigilant to see this 7% reduction materialize and await the mid-year review where we expect further announcements reflective of the present scenario.
Within the rubric of the government making structural adjustments and otherwise changes within the economy, the announced tripartite approach is welcomed. To face the challenges of the New Economic Reality, Trinidad and Tobago needs an improved mechanism than what prevails for labour-business-government dialogue. The sub-components of the index provides useful insight, especially in the ranking. Cooperation in labour-employer relations at 133 out of 144 is indicative of the vast room for improvement.
The employment challenge however in a small island developing state is not limited to the context of labour and employer but is also affected by subventional programmes aimed to help the indigent. It is noteworthy that AMCHAM T&T’s membership is willing through the assimilation of CEPEP workers into their workforce, in not only helping fill their vacancies but also exhibiting the need to bring more people into the formal economy. This is a proposal AMCHAM T&T continues to spearhead, up to our most recent meeting with the Minister of Labour and Small Enterprise Development, Minister Baptiste, at which time she also re-affirmed pay to productivity. It would be remiss of me if I did not recognize Minister Gopee-Scoon’s advice and guidance in the matter when we first met with her some months prior.
It is my hope, the hope formed from the initial trepidation when I began my preparations for this morning’s proceedings, and that you have also garnered a measure of optimism in that the glass is in fact half full. After all, every dark cloud has a silver lining. I wish to close by re-affirming the confidence in Trinidad and Tobago, its future and locale as a great place to business and live.
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