Economic Outlook Forum 2022
January 26th, 2022 | Related To: AMERICAN CHAMBER OF COMMERCE OF TRINIDAD AND TOBAGO (AMCHAM T&T)
PRESIDENT’S WELCOME REMARKS
“Creating Confidence, Generating Growth”
Welcome to AMCHAM T&T’s first major event of the year – our Economic Outlook Forum for 2022.
Our theme this year is creating confidence, generating growth. To achieve these, we must have two things – a clear sense of direction and we must believe that we are indeed heading there. We hope to address these things over the course of this morning’s session.
By partnering with EY this year to generate some data, this event is designed to provide a snapshot of what the business community is thinking at this point in time as well as offer guidance on how businesses can adjust their strategy to remain resilient and grow, despite external factors that may be out of their control.
Of course, we also take this opportunity to assess the feedback of our members and make some policy suggestions for the consideration of the Government since businesses exist within a framework set by governments.
Building a better, brighter future will depend on many factors but ultimately it comes down to defining a vision, engaging different sections of society to get valued feedback and ensure buy-in and then authentically working together under that shared vision.
Difficult decisions may need to be made and change may not happen overnight, but a better tomorrow begins with the decisions we are making today. And as we all in business know, inaction will likely result in negative outcomes.
Two years into the COVID-19 pandemic, Trinidad and Tobago, much like the world economy continues to face unprecedented challenges. T&T’s current economic outlook reveals a sharp increase in the country’s fiscal deficit and public debt from 2019. Melanie Tom of EY will shortly give more details on this in her presentation. What is noteworthy though, is that the data is showing that about a quarter of businesses continue to experience declines in revenue and profitability. That is no small number. The imperative to improve the business environment and accelerate structural reforms cannot be ignored and our panellists will be discussing how this can be done in our session later this morning.
AMCHAM T&T acknowledges the uphill battle these challenges pose, but we also believe none of it is insurmountable. According to the IMF Staff Report of November 2021, a strong economic recovery is projected for 2022, even though this Recovery is Subject to High Uncertainty. Still, real GDP growth in 2022 is expected at 5.7 percent, reinforced by the continued policy support and the anticipated recovery in oil and gas production.
There are a few things that should be noted, however. Firstly, if things remain as they are, the IMF predicts flattening of economic activity from 2024 onward. Secondly, the growth prediction is predicated on more natural gas production compared to last year coupled with higher petrochemical and petroleum prices. This means that the growth prediction is not necessarily the result of an improved business environment but linked to external factors over which we have little control. The third is that GDP growth does not automatically result in enhanced societal welfare. This will require the vision we spoke about earlier and the deliberate and transparent management of increased income.
So how can we create sustainable economic growth from 2022 onward amidst this backdrop? For us, it starts with strong leadership and increased cooperation among all key stakeholders. There is a need for the Government to convince citizens that it has the will to make much-needed changes and get the results that matter most to citizens. Collaboration and action, therefore, are, in our view, what will re-instil confidence.
For at least the next 10 years, the country’s revenue is going to continue to come primarily from the energy sector. And while we hope that the current Deepwater bid round is successful and that we will one day soon have access to gas from our neighbours, it is imperative that we diligently work to develop new sectors.
In pursuit of this goal, last year, in partnership with ExporTT we hosted a “Doing Business” with Illinois session and will follow up this year with some matchmaking for local firms. We also, in conjunction with the Canadian High Commission hosted a mini trade mission, primarily for firms in the tech sector. We’ll be doing more of these this year.
Meanwhile, generating growth could be hampered by our staggering debt. Already the cost of servicing our debt is impacting our ability to re-invest in more productive activities. What we are saying is that we have to link spending to desired outcomes. Those outcomes must themselves be linked to increased productivity and self-sustainability of the individual and of the country.
And of course, this must be done while investing in digital and physical infrastructure, both of which are in need of upgrade.
In that regard, we must accept that our economic survival depends on the creation of a digitally-based economy that attracts investors, creates business confidence, increases social mobility, and ultimately, improves the quality of life. There’s no reason why we should not be able to make T&T a major tech hub in the Caribbean. With the right infrastructure and policy framework, coupled with the creativity and innovation of our people, we can do this. AMCHAM T&T will continue to drive digital transformation in the private sector and collaborate with the Government and multi-lateral agencies to develop the tech industry in T&T. In fact, we are currently undertaking a study, jointly with the TTIFC with the support of the IDB, to determine the tech-skills gap in T&T. Our hope is that we can use the results of this study to identify the training and manpower needs of both companies already resident in T&T and those that are interested in establishing operations here to ensure that there are adequately trained and skilled people to support their operations and growth.
In this regard, we look forward to working with the Government, TTIFC, InvesTT and ExporTT to develop a strategy to take advantage of the nearshoring wave taking place as North American companies seek to move operations from Asia closer to home.
A critical component of effective global trade and therefore competitiveness is the smooth flow of goods across borders. Trinidad and Tobago is in urgent need of customs reform. Our partnership last year with the Ministry of Finance to form the Joint Consultative Customs Committee has seen us working closely with Customs to improve our Ease of Doing Business as well as providing innovative solutions to improve efficiency and customer service at our ports.
It would be remiss of me at this point not to publicly thank the Acting Comptroller, Vidya Marcial and her team for their willingness to listen and to engage with the private sector to find solutions. Through this increased collaboration, we have had some success.
However, AMCHAM T&T would like to see more done to minimize the bureaucracy and the cost at the border if we are to reap benefits. This would require the complete digitization of the clearance process and the implementation of appropriate risk management systems to make it more efficient and business friendly.
So, as I said at the beginning, we want to create confidence and generate growth. What will this look like if achieved? Well, this will mean more choices for consumers, more jobs for citizens, more taxes for government and stronger, more resilient companies.
And from AMCHAM T&T’s perspective, this vision we speak of should address providing:
– a robust financial system that services efficient and reliable business-related transactions.
– adherence to the rule of law with institutions and governance models that are easily adaptable to future crises.
– a stronger and more transparent regulatory and policy environment that will inspire growth and investor confidence.
– low levels of white-collar crime supported by robust prosecution.
– and leaders committed to rebuilding the eroded public trust in institutions
We believe all of this is within reach for our nation. But we ALL must step up and do our part! That means working together to remove unfairness in the market, eliminating barriers that impede progress, and creating more opportunities to reduce inequalities.
This is not a job for the government alone. Citizens, businesses, employers, and employees have a role to play if we are to rebuild and reimagine a better, brighter future for Trinidad and Tobago.
It starts with how we are interacting with each other. If we aren’t talking, we aren’t doing, we aren’t fixing, we aren’t changing, we aren’t creating! And that’s what we need more of going forward.
So, let’s EACH do our part!
Finally, I would like to end with thanks. Firstly, thanks to Pria Narinesingh, Zach Nadur and Melanie Thom from our platinum sponsor, EY for your partnership in conducting this survey and analysing and presenting the results. It will provide useful insights for our discussions this morning and certainly for our ongoing consideration.
I must also thank our sponsors Ansa Merchant Bank, eZone and the Unit Trust Corporation.
And to Rey Anne Paynter Mendez, Melissa Pierre and Kennedy Maraj for their work on the survey and co-ordinating and communicating the event.
Ladies and gentlemen, I thank you for your attendance this morning and I hope you enjoy today’s session.
Economic Outlook Forum 2022 – Featured Remarks