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New Investment Policy Targets Non-Oil Sector

Just as Who’s Who 2007 was about to go to press in July, the Green Paper on Investment Policy 2007-2012 was circulated to the business community for public comment.

It will replace the Investment Act of 1990 and heralds a new approach to investment.

Explaining the need for a new policy, the Green Paper notes that the critical issue for sustainable economic development is how to increase GDP when oil and gas production begin to decrease.

“The solution lies in the sustainable development of the non-energy sector and, as a prerequisite, the attraction of investment into this sector,” it stated.

The new investment policy will provide general principles and guidelines for investment and promote and encourage both national and foreign investments. It recommends different promotion strategies for each type of investment.

Domestic investment promotion strategies include:

the identification and development of investment projects
facilitation of joint ventures
reservation of a number of services sub-sectors for nationals
improving access to financing and the communication of investment opportunities
provision of training to entrepreneurs, and
the hosting of trade fairs and trade and investment conferences.

Foreign direct investment promotion strategies include;

the identification and development of investment projects
the provision of opportunities linked to firms that are already established
the use of trade and investment missions
the hosting of trade fairs, conferences, and site visits for potential investors.

The new approach will be more focused. For example, the Green Paper recommends a differentiated basket of incentives for the promotion of different sectors.

The new legislation will also deal with issues not previously addressed, such as national treatment, transfers, key personnel and dispute settlement.

Concerning Share Ownership, for example, the Green Paper recommends allowing non-nationals to acquire up to 49% of the shares in a local company without the need for a licence. Currently a non-national cannot acquire more than 30% of any company without approval from the Minister of Finance.

Noting that the tourism sector currently contains a policy of reserving investment in small hotels or guesthouses of 21 or fewer rooms for nationals of Trinidad and Tobago, the Green Paper recommends that “a similar policy could be applied to such subsectors as real estate, finance, construction, and catering, among others.”

It addresses the need to improve training to create future entrepreneurs, recommends introducing a course in “entrepreneurship” in the Secondary School curriculum, and also suggests the establishment of a Business Information Centre to assist investors. The new Investment Policy also directly addresses the Seven Sectors earmarked by the Government for priority development. The sectors are: Food and Beverages, Printing and Packaging, Merchant Marine, Film, Music and Entertainment, Fish and Fish Processing, and Yachting.

Providing some initial feedback on the Green Paper, the Trinidad and Tobago Manufacturers’ Association (TTMA) said: “An Investment Policy which provides an environment to facilitate and increase investment (particularly FDI) into the seven non-energy sectors (especially manufacturing) is of great importance to the membership of TTMA and other small and medium sized enterprises.”

It would like to see the Policy create an organised and effective environment which allows for innovative opportunities and the exploitation of these innovations, knowledge and experience for the benefit of local manufacturers (including SMEs).

The TTMA “is pleased to see that the issue of Value Added/Local Content as well as the non-energy sector/Seven Sectors were addressed sufficiently in the Policy,” it added.

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