AMCHAM T&T’s DOING BUSINESS IN LATIN AMERICA
HYATT REGENCY, TRINIDAD
WEDNESDAY 16TH SEPTEMBER, 2015
OPENING REMARKS – NIRAD TEWARIE, CEO AMCHAM T&T
Good Afternoon Ladies and Gentlemen
Special thanks to the Minister of Trade and Industry, Senator the Hon. Paula Gopee Scoon for agreeing so readily to address us today. I am especially heartened by her comments in the press today regarding her planned emphasis on public-private partnerships. We look forward to discussing this in more detail when AMCHAM T&T is able to meet with the Honourable Minister.
Today there is little that anyone can do to escape the ubiquitous news of global economic uncertainty.
In China there is reduced production, currency depreciation and faltering stock markets. In Europe, there is sluggish growth, with some members possibly on their way to defaulting out of the Union. Closer to home, our CARICOM brother Dominica is grappling with the effects of a natural disaster, where damages are estimated to be equivalent to about half of the country’s Gross Domestic Product.
At home in T&T we can at least be proud that we seamlessly transitioned from one Government to another. However concerns about the economy linger as we prepare to enter a new fiscal year with a new government. High on the list of concerns is revenue generation, as our energy exports account for about 70.0% of the country’s total exports, and the prices of oil and gas continue their downward trend with no immediate turn around in sight. Add to that the frustration of the business community with the perennially inefficient government bureaucracy and, more recently, periods of US dollar shortages.
While some may be quick to declare that the worst is yet to come, we at AMCHAM T&T remain optimistic in the potential and ingenuity of our people and the ability to turn a challenge into a triumph. I would like to reiterate the words of Norman Christie, Regional President of bpTT at AMCHAM T&T’s Economic Outlook Forum earlier this year:
“We should never let a good downturn go to waste. If we are really clear about the circumstance we find ourselves in then we must focus on what we should do to make the best of it. We should not lose focus or get distracted because if we do the world is very competitive. In a broad sense what we should be looking at is how competitive can we get in the circumstances.”
I believe this quote reflects a lot of what AMCHAM T&T is trying to do, as we look to positively add to the collective exchange of ideas and solutions to the challenges our economy faces.
So, as a country, in good times and bad, we speak about diversification. Diversification primarily of industries. And while the non-energy sector sector, periodically records some growth, if we are truthful, as a country, we cannot say that, outside of the energy services sector, and maybe financial services, we have truly developed globally competitive industries on which we can build for growth beyond oil and gas.
With the economic liberalization of the 1980s, our firms adapted and grew to the point where our CARICOM neighbours often complained of our dominance in the region. The prospects for future growth in CARICOM are not great, although there are definitely opportunities to be exploited in Haiti, Guyana and Suriname.
By 2020, Latin American GDP by contrast is expected to reach $10 trillion—double that of 2010—with 640 million active consumers. This can translate into a ready market for many local products. Economies such as Mexico, Guatemala, and Panama continue to experience steady economic growth. Another thriving economy, in Latin America is Peru. Over the period 2002–12, the Peruvian economy almost doubled in size, and with continued GDP growth of even a modesr 2.4% in 2014, The World Bank has dubbed Peru as one of the best performing economies in Latin America.
In view of the aforementioned, AMCHAM T&T believes that we must focus more on the diversification of markets with an immediate emphasis on Latin America. This is the rationale for this event.
In support of this diversification of markets, AMCHAM T&T offers our members unparalleled access to the business community and governments in this hemisphere. From our close and direct relationship with the largest business organization in the world, the US Chamber of Commerce, which we visit at least once a year – to our 23 sister AMCHAMS in Latin America and the Caribbean, there is no other organization in T&T that can better assist you in getting market information, contacts or access in the Americas. That I say without fear of contradiction. In fact, our reach is so great that recently, we facilitated a Washington DC based organization get access to a US Government Official in T&T because they could not get that access in the US.
This is what Jim Conway, Executive Director Express Delivery and Logistics Association had to say about our work:
“As someone who has worked in Washington for more than 30 years, I am well aware of the high degree of difficulty in obtaining a face to face meeting with senior government policy regulatory executives. I thus found it remarkable and especially valuable to be able to participate in a meeting which Amcham arranged with the Assistant Secretary of the Department of Homeland Security recently in Trinidad. Our meeting was extremely productive and resulted in an invaluable contact point for our Association in Washington. Our Association is deeply appreciative of Amcham’s facilitation of this meeting and a tip of our collective hats to the organization’ ability to connect directly with senior policymakers.”
With regard to the issues raised by Jim in Trinidad, the local express industry, including our sponsor DHL, is concerned about the impact on the business of somewhat arbitrary changes to inspections and fees. We therefore recommend that T&T introduce a de minimis value of USD200 under which packages will not be subject to inspection. The cost of inspecting these low cost, low taxable items far outweighs the revenue derived from the searches. Should the government agree to implement this suggestion, which is contained in our 2015-2016 budget submission, the focus of the Customs and Excise Division and its limited resources can be on the higher value items, which yield more tax revenue. Efficiency of tax collection rather than higher taxation should be the goal.
On that point, while the question of revenue generation remains, we firmly believe that increased taxation should not be the first resort. We anticipate that some form of taxation may be proposed in the upcoming budget such as a return to the Land and Building tax. If so, we urge the government to be mindful of the impact on business.
On the flipside, AMCHAM T&T does support increased efforts to make the tax collection system more efficient. In this regard, we want to assure the government that they will have in us, a partner who is willing to collaborate on the proposed Revenue Authority, as a means of making the tax collection system more efficient and effective.
In tandem with more effective tax collection, our country needs the full implementation and proclamation of the recently passed procurement legislation. We will continue to work with the Government on this, particularly through the Private Sector Civil Society Group.
Looking to the future, AMCHAM T&T has championed a number of initiatives over the past years, which we would like to see come to fruition.
One initiative is the inclusion of services in the preferential trading relationship with the United States. This initiative (SOCA) lobbies for favourable trade policies towards the Caribbean and has gained increased support in the region and in the US both from the government and the private sector. This issue was tabled for discussion earlier in the year when US President Barack Obama visited Jamaica in April. We continue to seek the feedback from service companies within and outside of our membership, so we can adequately inform the initiative moving forward. We intend to partner with IDB to do additional research and look forward to continued Government support to push this proposal forward.
Another policy that AMCHAM T&T has brought to the table is the possibility of making the Piarco International Airport an airport in which on can be pre-cleared for entry into the United States. We believe that this is not only a feasible initiative but one which will offer clear advantages in terms of fostering a better relationship with the United States as well as positioning Trinidad and Tobago as a portal for increased business travel throughout the Western Hemisphere. Were we to be successful in this initiative, creating a real logistics cluster would be even more of a possibility.
Coupled with that, we know that Government of Chile is keen on discussing the possibility of an air services agreement with T&T. This too is because T&T is strategically located not only for the movement of people but also of cargo throughout the Americas. AMCHAM T&T supports this initiative and will work with our sister AMCHAM in Chile as well as the governments of both countries to make this intent, a reality.
I could not conclude without expressing my gratitude to Iwan Misir of the CAF for not only providing a speaker for today’s event but with whom we are in advanced discussions about doing a trade complementarity study between T&T and Panama. This project, which will be done jointly by AMCHAM T&T, AMCHAM Panama, the T&T Chamber of Industry and the Panama Chamber, will provide the basis for private sector led trade facilitation between the two countries.
Of course today’s event would not have been possible without the DHL team and Reiner Wolfe in particular. As he said to me yesterday, he is in the Express business. So, we spoke about the concept for the event and then made it happen. No long talk as we say here. Thanks Reiner and Joella.
While expanding may seem like a daunting task to many, one must consider the alternative. In the words of Benjamin Franklin, “Without continual growth and progress, such words as improvement, achievement and success have no meaning”
Therefore let me conclude by marrying two phrases which I heard recently: Let’s do this and move forward together!