Thursday, Dec 14, 2017
Government | North America & Caribbean | Trinidad and Tobago

Towards a diversified economy in Trinidad and Tobago


4 years ago

Dr. Bhoendradatt Tewarie, Minister of Planning and Sustainable Development
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Dr. Bhoendradatt Tewarie

Minister of Planning and Sustainable Development

To date, Trinidad and Tobago’ principal wealth has been focused around its natural resources, making up 45% of the country’s GDP; however the government is making a concerted effort to diversify the economy, and the Ministry of Planning and Sustainable Development is the primary vehicle behind this process. In an interview with United World, Dr Bhoendradatt Tewarie (the Minister of Planning and Sustainable Development) talks about the efforts being made towards diversification, the key sectors behind this drive, as well as some of the key ‘growth poles’

Can you start off by giving us your insights into the current state of the economy and the most important programs in the National Agenda at the moment?
 
We’ve come a long way since the financial crisis and the attending recession from 2008 and 2009.  In 2009 we were at a growth rate of negative 4.6 percent.  Based on the 1.6 percent growth last year, we are likely to see about 2.5 percent this year, and once we achieve that, we are likely to see incremental growth over the next couple of years.  A lot of that has been fueled by investment which has come back after a lull in 2009 and 2010.  In 2012 we had about 2.5 billion USD in investment, mostly in energy, but about half a billion was in the non-energy sector, which for us is very important.  
 
What we are trying to do in terms of diversification is trying to build on our strength, which is energy, so we continue to have investment in exploration and production but most importantly in services.  The services part of the energy sector, which is home grown and local but is tied to the multi-lateral and multinational investment in the energy sector, therefore has the capacity to grow as those companies expand internationally.  

We have a study from the Inter-American Development Bank, which targets the energy sector and advises us to help to nurture, grow and facilitate the growth of that particular sector.  
 
We are also looking at other areas for diversification; one of those is ICT.  Recently we brought together about 100 ICT companies in Trinidad and Tobago to do a creative session to look for better opportunities and connectivity with each other in true collaboration, as we look to the development of the sector and also to exports.  We are also targeting the growth of the ICT sector through exports and services. 
 
Another area is the maritime sector, we’ve just done a port rationalization study where we engaged consultants by video a few weeks ago, together with all the key stakeholders from Trinidad and Tobago to interrogate the report, and on the basis of that, it is clear that we are going to have to expand our port capacity, because there is a tremendous potential for yachting, ship repair and ship building.   
 
The financial sector is very important for us because, in spite of the financial crisis and its impact in Trinidad and Tobago, it is still quite strong and we anticipate growth of that sector and diversification of that sector. Many of the international banks like Scotia Bank and Royal Bank of Canada have brought their back office operations to Trinidad and Tobago as well as some of the insurance companies like Pan American.

We are seeing also interest in more sophisticated types of investment in the financial sector, that before didn’t exist here.  
 
Another sector of course is tourism.  

Trinidad and Tobago has never pursued large scale tourism because most of our income and contribution to the GDP growth comes from the energy sector but now we have two strategies: one for Tobago, which is a rather underdeveloped island with a lot of pristine beauty, and one for Trinidad, in the context of events, entertainment, culture and diversity.  

One of the places that we are promoting in Trinidad is the Chaguaramas peninsula: we just finished the first phase of the boardwalk and we are now doing a second phase of it;  we are bringing a number of activities and we are encouraging both local and international tourism in that area; we are now in discussions with an investor for the development of the golf course; we also have a hotel in Chaguaramas which has tremendous potential and we are inviting people to invest in that as well.

 Linked to the Tourism and development is the business of culture and creative industries.  

So a lot of emphasis is being placed on our cultural products, the intellectual property aspects of them, the entertainment value and the international possibilities in terms of exporting them.
 
Your Ministry has also identified 5 geographical areas or ‘Growth Poles’ that have great potential for development, Chaguaramas being one which you’ve just spoke about.  Can you emphasize on these growth poles and also the role of the special purpose vehicles that have been designed to see out development in these areas such as the Chaguaramas Development Authority and East Port of Spain Development Company?
 
Trinidad and Tobago has been developed along two corridors, one east/west and one north/south so we have a kind of urban development pattern in the country along these two major lines.  

Therefore much of the island of Trinidad is pretty unsettled in terms of population and in terms of the growth of commerce and business. What we are doing now is building infrastructure to connect the country and provide accessibility. We are moving to broadband to be able to connect the country and its citizens to the government and to the rest of the world in a constructive way.  As we do that we have identified 5 growth poles to facilitate decentralization.  
 
Trinidad and Tobago is a country in which the population is equal to twice the number of cars we have, without decentralization, we will end up with a huge traffic bottlenecks every day.  At the same time we are reforming the local government systems and facilitating some devolution of power and control to the local authorities.  We are also engaging a constitutional reform exercise to bolster the democratic process.  
 
Together with the 5 growth poles we have 7 economic development zones.  

Those zones are particularly focused on different types of investments so you can build clusters of industries in each of them.

The strategy is to target government spending and investment for infrastructure development and then to target new investment in new sectors for development, and in addition to that to work with existing business to look at the possibilities of better clustering and greater focus on expansion of their current business for local and export markets.  As we build a social infrastructure we stimulate cultural activity and create the conditions for a better quality of life in each of these communities surrounding the growth poles.  

This way we will bring more jobs closer to where these people live and we are going to be able to spread out the population a little better, therefore we will be able to manage recreational services like health, hospital issues a little better.  At the end of the day what we are looking at is how do you improve the quality of life of the population, not just the GDP or the per capital income.
 
In order to have sustainable social development, the government must work hard to close the gap between the rich and the poor in Trinidad and Tobago.  What instruments have been put in place to ensure the gap will continue to be reduced?
 
One of the things that we are really concerned about is the level of poverty in spite of the high per capita income and strong GDP of the country and secondly the gaps in income.  Now the gap in income flows from a structural problem in Trinidad and Tobago which is because so much of the country’s wealth is generated by energy; the energy sector represents a higher tier of the economy.  

People who work in the energy sector are generally better paid and enjoy a better quality of life and the other sectors that make up our economy are relatively disadvantaged because of that so you end up with a two tier economic system.  
 
What we are doing to address these issues are the growth poles, as you have growth at the level of communities in which people live, you have put more people into not just jobs but into economic opportunity.  

The second area is that we use a significant amount of revenues generated from oil and gas to create a social safety net in the society which targets the poor and the under privileged and which creates conditions especially looking out for single family households and households with children to be cared for.  
 
We have also created educational opportunity for all. By 2015 we will have achieved universal pre-school education.  We have already achieved universal primary and secondary education and we have a participation in tertiary education of 57 percent.  

Next year we will achieve our goal of 60 percent.  Another area is in technical vocational educational and skills development, also by temporary work programs that we provide for unskilled labor in the country, what we do in these temporary work programs is we have a training component and we have incentives in the budget to allow the private sector to work with the public sector to bridge the movement of people from the temporary programs into private sector employment and skills development.  
 
We also have some geographical strategies, so in the East Port of Spain area which is an area of urban depression which tends to be a hot bed for the breading of criminals, in that area besides the targeted work of the police and the law enforcement, we have a number of social programs and we are now working with the private sector for an active investment strategy in those areas to accompany the government in what we are doing.  

So together with the Inter-American Development Bank, we have designed a Sustainable City of Port of Spain Program which is targeted at rehabilitation and regeneration of the urban center of Port of Spain.  We hope in doing these things we will be able to reduce poverty and eradicate it and narrow the equality gap in the country.  We have been achieving a reasonable success. In 2012, the average unemployment rate was about 5%, the last figures we got from the middle of 2013 show it’s down to about 3.7%.
 
The United States is a large investor in Trinidad and Tobago and its leading trading partner.  There are also a number of America’s largest multinational companies with offices in TT. In your opinion, how important is the unique and special relationship with the US to Trinidad and Tobago, and what message would you like to communicate to the readers of USA Today about Trinidad and Tobago?
 
The US is very important for us.  It used to be the foremost market for natural gas, it is less so now, because it has found its own abundance, but it remains an important market for Trinidad and Tobago for goods and services.  There are over one hundred multinationals in Trinidad and Tobago and the majority come from US, therefore Trinidad and Tobago remains an important investment destination for the US.

 I think one of the advantages of this countries for the American investors is that it is English speaking and offers a good quality of life for them and their families.  
 
Secondly, it is easily accessible to the world. Trinidad and Tobago has always been an open society and has been increasing its involvement with the countries of Latin America. We have strong relationships with Venezuela, Colombia, Brazil, Dominican Republic, Guatemala, El Salvador. So there are many opportunities for partnerships with US firms in exploring the opportunities in Latin America through our country.

So Trinidad and Tobago is ideal for American companies to not only do business in our country, but to service the CARICOM region and the rest of Latin America through us.

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