Contact Magazine: Building a Competitive T&T Issue

Contents

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18 Do Trade Agreements work?

20 Competing on the World Stage - sharing success strategies 22 Increasing productivity more than a formula A quarterly publication of The Trinidad and Tobago Chamber of Industry and Commerce

Leadership and Competitiveness

A competitive challenge

The World Economic Leading business Forum’s annual organisations have been publication, the Global playing their part in Competitiveness achieving this stillIndex (GCI), defines elusive goal. The competitiveness as Trinidad and Tobago "the set of institutions, Chamber of Industry policies and factors that determine the level of and Commerce has spearheaded many productivity of a country." initiatives aimed at improving competitiveness.

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Dreaming of a developmental leap in Trinidad and Tobago

Diversification necessary and urgent

Clarion calls for the The winners are the oil diversification of the importing countries economy, which began that celebrate the more than three decades decrease in cost and ago, are becoming more push inflation and the supply side expansion which it facilitates in urgent now, given instability of the worldwide their economies. The consumer celebrates his energy economy and the price of oil and gas savings at the pump and this too has a positive since 2010. demand pull effect.

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24 Labour - a key to competitiveness 25 Combatting white collar crime 26 The Diversification imperative 28 “Be in the world not just of it” 29 What every business person should know 30 Economic and Financial Statistics 32 Economic Outlook 35 First quarter 2015 review

Editor: Halima Khan Editorial Board: Communications Committee: Robert Trestrail, Catherine Kumar, Hugh Ferreira, Anthony Agostini, Andrew Johnson, Dalia King, Michele Celestine

38 Deep Water Discoveries the last frontier

Design & Layout JG Design Caribbean Published by Eureka Communications Limited Suite #2 No.9 Avenue First, St. James, Trinidad W.I. Tel: (868) 622-2017 • (868) 628-1555 Fax: • (868) 622-4475 E-mail: • contacteureka@yahoo.com • lanny5052@gmail.com • jgdesigns.jason@gmail.com

40 Energy Statistics

For The Trinidad and Tobago Chamber of Industry and Commerce Columbus Circle, Westmoorings, P.O. Box 499, Port of Spain, Trinidad & Tobago W.I. Tel: (868) 637-6966 Fax: (868) 637-7425 E-mail: chamber@chamber.org.tt • Website: www.chamber.org.tt For this magazine contact: Tel: (868) 637-6966

59 Welcome to New Members

Tobago Division:Trinidad and Tobago Chamber of Industry and Commerce 2nd Floor ANSA McAL Building, Milford Road, Scarborough, Tobago Tel: (868) 639-2669 Fax: (868) 639-2669 E-mail: tobagochamber@chamber.org.tt

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Information on Trinidad & Tobago

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Las Cuevas, North Coast, Trinidad

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rinidad and Tobago (T&T) has a population of approximately 1.3 million people who inhabit 4,827 square kilometers (1,886 miles) in Trinidad and 300 square kilometers (117 miles) in Tobago. Trinidad is located between 10º 2’ and 11º12’ N latitude and 60º 30’ and 61º 56’ W longitude or 11 Kilometers (6.8 miles) of the eastern coast of Venezuela. Tobago is located 32.2 Kilometers (20 miles) to the north-east of Trinidad. There are two international sea ports in Trinidad, Port-of-Spain and in Point Lisas. The International airports are located in Piarco, Trinidad and Crown Point, Tobago.

Trinidad’s economy is primarily dependent on the petrochemical sector, while the island of Tobago is mainly dependent on tourism.

The twin island republic boasts a multi-ethnic people, diverse culture and unique cuisine. As a result of its cosmopolitan population, the country celebrates a significant number of festivals around the year including carnival, Phagwa or Holi, Divali and Eid-Ul-Fitr. Tobago the smaller island, has a population of just over 54,000 and has an interesting history in that, during the colonial period, French, Dutch and British Forces fought for the possession of Tobago and the Island changed hands more than 22 times – more than any other Caribbean Island.

Contact • Vol.15 No.2 2015

Trinidad and Tobago Chamber of Industry and Commerce

VISION STATEMENT We are the Voice of Business.

MISSION STATEMENT To be the champion of business towards the development of a strong and sustainable national economy.

BOARD OF DIRECTORS Robert Trestrail – President Ronald Hinds – Vice President Rakesh Goswami – Vice President Wade George – Director Luana Boyack – Director Paula Rajkumarsingh – Director Jacqueline Francois – Director Jean-Pierre Du Coudray – Director Reyaz Ahamad – Director David Hadeed – Director Moonilal Lalchan, Immediate Past President Diane Hadad – Chairman, Tobago Division Catherine Kumar – Corporate Secretary & Chief Executive Officer COMMITTEES - TRINIDAD • Communications • Corporate Social Responsibility

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• Crime & Justice • NOVA • E-Business, Information • Trade & Business Technology & Development Telecommunications (EBITT) • Health, Safety & • Employment & Labour Relations Environment COMMITTEES - TOBAGO • Business Development & Tourism • Inter-island Transport

• Security • Environment

HOW TO CONTACT US Trinidad and Tobago Chamber of Industry and Commerce Columbus Circle, Westmoorings, P.O. Box 499, Port of Spain, Trinidad & Tobago W.I. Tel: (868) 637 6966 Fax: (868) 637 7425 E-mail: chamber@chamber.org.tt • Website: www.chamber.org.tt Tobago Division of the Trinidad and Tobago Chamber of Industry and Commerce 2nd Floor, Ansa McAL Bldg., Milford Rd., Scarborough, Tobago Tel: (868) 639 2669 Fax: (868) 639 3014 E-mail: tobagochamber@chamber.org.tt

• Facilities Management & Maintenance Contact • Vol.15 No.2 2015

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An Editorial Note from the President

A competitive challenge

By Robert Trestrail

Robert Trestrail, President, Trinidad and Tobago Chamber of Industry and Commerce

rinidad and Tobago has been traditionally reliant on its hydrocarbon sector to generate economic growth, and the country has been extraordinarily lucky in with regard to being buffered from harsh economic conditions, comparatively speaking. But has this translated to competitiveness? The World Economic Forum’s annual publication, the Global Competitiveness Index (GCI), defines competitiveness as "the set of institutions, policies and factors that determine the level of productivity of a country." T&T has been classified as an economy in transition from being efficiency driven to innovation driven.

However, while it suggests that we have moved away from a factor driven economy we are still very much reliant on our energy commodity exports and we remain vulnerable to external prices. As the government increases its budgetary spending, greater consideration must be given to how and where public monies are disbursed and in order to enhance the country innovative standing and competitiveness. While T&T showed some improvement in the 20142015 GCI with a ranking of 89th, we still lagged behind fellow Caribbean countries with lower per capita GDPs, such as Barbados, Costa Rica and Jamaica. Our Labour market efficiency ranking of 96 shows that we still

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lack the flexibility to ensure that workers are allocated to their most effective use in the economy and provided with incentives to give their best effort. A ranking of 101 in goods market efficiency indicates that we still have to improve significantly in terms of producing the right mix of products and services to satisfy demand or to ensure that these goods can be most effectively traded in the economy. This can be tied to our Innovation ranking of 100; T&T has the lowest contribution of High Technology Exports (as a percentage of Manufactured Exports) and Expenditure on R&D as a percentage of GDP when compared to the above-mentioned countries. Our ranking of 95 in the pillar of Institutions is indicative that there is a perception of excessive bureaucracy, corruption, dishonesty in dealing with public contracts, lack of transparency and trustworthiness, and inability to provide appropriate services for the business sector.

Alongside this of course, private sector transparency and ethical behaviour are indispensable to business and the economy.

Sadly, our challenges remain largely unchanged, as we repeat the areas where we must rely on public sector efficiency and action in order to improve the conditions for doing business and thus enhancing our firms’ and

country’s competitiveness. For, while governments are responsible for the regulatory conditions and infrastructure, this competitiveness framework assumes that firms compete, not nations. Businesses are also faced with problems such as the high economic and social costs of crime, poor work ethic in the labour force and poor access to financing.

Some progress has been made through initiatives such as the Fairshare and Ideas to Innovation (i2i) programmes, but we are at the stage where we need to fast-track the plans – with requisite benchmarks for accountability government and state agencies – that have been developed to increase competitiveness. In this regard, the Ministry of Planning and Sustainable Development has created a National Performance Framework which sets timelines and targets for achievement, while the Council for Competitiveness and Innovation is working to execute various plans targeted at increasing competitiveness. In this issue of CONTACT we identify and discuss some of the key areas that influence competitiveness – diversification, labour, trading agreements, productivity, crime and indeed, leadership. Without a doubt, it will require commitment on several fronts to achieve competitiveness, and with astute planning and a clear vision, Trinidad and Tobago can reach this greatly desired goal.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Criteria for student selection - Each student must: • Be unable financially to pursue further education upon graduation, • Demonstrate potential and a willingness to learn, • Attend all scheduled training sessions, and • Complete a data entry form outlining goals, skills & identifing areas requiring development.

The Chamber’s NOVA Committee’s Jumpstart Programme was established in 1998 and seeks to assist school-leavers to learn about the working environment and to access opportunities for employment.

Selected schools and institutions across the country are invited to nominate graduating students to participate in this highly regarded ‘youth development programme’.

Participating company requirements - Each company must: • Pay a weekly recommended stipend, • Assign a mentor to the apprentice and • Complete an assessment review at the end of the apprenticeship.

Further information is available on the Jumpstart Programme from the Chamber’s Secretariat or Cheryl-Lyn Kurban, Project Assistant at 637-6966 ext 228 or ckurban@chamber.org.tt

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Feature

Leadership and Competitiveness

By Kevin Baldeosingh

a tolerable administration of justice: all the rest being brought about by the natural course of things.” Nations which institute just five basic policies have almost always achieved prosperity. These policies are property rights; Leading business organisations have been monetary restraint; fiscal responsibility; playing their part in achieving this still-elusive effective but limited regulation of financial goal. The Trinidad and Tobago Chamber of markets; and free trade.

Industry and Commerce has spearheaded many initiatives aimed at improving competitiveness, Of all these, the question of institutions is as have other business associations locally as paramount. For the past 30 years, debate has well as regional chambers and NGOs, such as raged as to whether institution or culture is Rotary Clubs. Such programmes have ranged the key to economic prosperity, including from seminars on best business practices, eg., competitiveness. In the 1960s, the political leadership, marketing, new systems and scientists’ assumption was that creating the technologies designed to improve efficiency. right institutions, such as a democratic The Chamber has also organised trade parliament and an independent judiciary, missions, submitted a plethora of position would result in progress. But many Third papers to various political administrations, and World societies possessed all the right worked with State agencies to improve institutions, yet in ensuing decades the business. institutions failed to function as they did in developed nations.

In the final analysis, however, all this is for naught unless the government puts in place At this point, the social scientists began business-friendly policies. Decades of research arguing that culture (i.e. values and attitudes) by economists and social scientists have were the real basis of economic progress or demonstrated that the most crucial factor for lack thereof. Some married the two paradigms, economic prosperity is good governance. arguing that institutions were re-shaped by That is why the Global Competitiveness Index culture for the worse, or that progressive (GCI) defines competitiveness as "the set of cultures created stable institutions. institutions, policies and factors that determine Economists, in turn, pooh-poohed the the level of productivity of a country." Out of premises of both the political scientists and the 144 countries listed in the GCI’s 2014 the culture theorists, asserting instead that report, Trinidad and Tobago ranked a dismal Smith’s factors plus the right incentives were 89th. the real keys to economic progress.

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aking Trinidad and Tobago economically competitive is both a political responsibility, as well as a business challenge.

Adam Smith, the founder of modern economics, started the ball rolling when he wrote, “Little else is requisite to carry a State to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and

success depends on connections to lack of punctuality, militate against economic progress in fundamental ways. And the range of incentives offered in both the public and private sectors have clearly been ineffectual in increasing competitiveness for the nation.

Can enlightened leadership overcome these deficiencies? In a broad sense, the answer is Yes. Enlightened political leadership would put in place the institutional measures required to support capitalist initiatives. Progressive business leadership would take full advantage of such measures, without depending on “crony capitalism” and would create a social safety net that is a hallmark of conscious capitalism.

Unfortunately, ensuring enlightened leadership is itself a political and cultural problem.

Politically, the required changes will only come about when politicians find it politically advantageous to institute them. But, as long as party financiers find it profitable to invest in politicians for narrow but substantial profits, and as long as government revenues are adequately supplied by rents from the energy sector, politicians have little incentive to create a competitive economy.

Culturally, the data show that leaders in any society tend to embody the values of that society. This is hardly surprising: few people become leaders by defying the views of the majority. If, therefore, a society’s values are regressive and block economic progress, then T&T is a textbook example of all these leadership becomes part of the problem. shortcomings. The country has all the right institutions, but none of them work effectively None of this means that T&T cannot become enough to foster competitiveness. Our cultural globally competitive outside the energy sector. values, which range from the belief that Our society is fluid and dynamic and, while

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Feature this is a perilous state, it is also an environment ripe with opportunity. The formula, if there is one, comes from the second founding father of economics, David Ricardo, whose Theory of Comparative Advantage is the closest thing to a law in economics. Ricardo showed mathematically that, even if Country A was more efficient at producing all goods than Country B, it would still be advantageous for Country A to buy some goods from Country B, once Country A produced some goods more efficiently than others.

Ricardo’s law also means that the very idea of competition between countries is misleading. This is especially so for small countries like ours. Fundamentally, we cannot compete in any area with any bigger developed economy. But comparative advantage means that, once we identify those goods and services we produce efficiently, we can foster trade even with countries which

produce these same goods and services better.

This is what Singapore did in the 1960s, becoming in 30 years one of the world’s richest nations per capita. However, the Singapore formula, which drew on the industrialisation by invitation policy recommended by Nobel Prize-winning Caribbean economist W. Arthur Lewis, is not applicable for T&T in this 21st century.

There are no quick fixes. If the political leadership institutes the necessary reforms in education and training, starts to wean the labour force from the State breast, and reduces subsidies and transfers, then the conditions for improved work ethic and innovation and institutional efficiency will be in place.

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By fostering that foundation and by becoming bolder in innovation, the business community can help fulfil T&T’s economic potential in this new millennium.

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Nominate your Champion

www.chamber.org.tt

November 7 2015 Contact • Vol.15 No.2 2015

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Feature

Dreaming of a developmental leap in Trinidad and Tobago

By Heidi Achong, President, Central American Leadership Institute

o one knows exactly what prompted the decision by Saudi Arabia and the rest of OPEC to decide to stop restricting their output of petroleum, and significantly drop their margins and consequently that of all of the other oil producers like Russia, Nigeria, Iran, Mexico and Venezuela. Perhaps it's fact that it figured out that it could capitalize on its much lower production costs of $5-6 a barrel and completely cripple its competing oil producers while utilizing the comfort of its high levels of savings (for Saudi Arabia that means $900 billion in reserves) or that it understood possibly, that by strategically lowering the international oil price, developments by the USA, its major importer, to expand its own supply through improved fracking and horizontal drilling technologies would be deemed un-economic, thus buying the cartel many more years of secured exports.

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Geopolitically the move has had its effect .The Russian economy has contracted almost 2.5% and its currency continues to depreciate despite attempts by Putin to raise interest rates and to sell foreign reserves to try to bolster the rouble.

The economy continues to contract, cursed by the inelastic nature of its primary export.

The winners are the oil importing countries that celebrate the decrease in cost and push inflation and the supply side expansion which it facilitates in their economies. The consumer celebrates his savings at the pump and this too has a positive demand pull effect. Those that suffer are the economies like Trinidad and Tobago, as the oil industry begins to squeeze costs out of its supply chain so there are layoffs, and wages and margins are getting cut and highly indebted companies are going bust.

Losers also include all of the visionary global renewable energy investors who held the hope that hydroelectricity, wind, geothermal and solar energy would continue to develop at a viable rate to one day serve as a lucrative alternative to bunker fuels. The environmental

activists shudder at the thought of its $40-$50 oil price that would render all of their alternative energy projects economically unviable. How then do we continue to hinge the development of Trinidad and Tobago (43% of GDP comes from the energy sector) on pricing dynamics that we do not control and on natural gas reserves that show an estimated 10 years of resource left at the current production rate?

How do we continue to afford our people a GDP per capita of $21,000 when the energy era eventually comes to an end?

One need only look to Norway as a case study to get inspired that things can be put in place to guarantee a secure future to a people. In September 2014, Norway's Government Petroleum Fund stood at US $857 billion. This fund holds 1% of global equity markets. If we were to assume a dismal return on investment of 2-3% annually on funds invested, this would mean that Norway's population of 5.2 million people could in theory be handed out cheques of US$3,300-$4,000 per person each year, without ever touching the capital invested.That's already more than the GDP per capita of many countries in Latin America like Bolivia, Nicaragua, El Salvador and Honduras.

Let's assume that the savings opportunity for Trinidad and Tobago in the 1970s after our first major oil boom is already lost, and that there's no way we could make up now for the lost time. With Trinidad's current heritage and stabilization fund standing at just US $4.7 billion in June 2013, what then? Will we continue to assume that our development and those of the rest of the developing countries is a zero sum game like in the colonial period where in order for there to be winners, there had to be loser? That our only chance of developing is premised on our natural resource and new finds, and that without it we could make very few leaps in development? It would be an easy argument to make as we see the

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

big jump between the developing countries and the developed ones, and the fact that neither group has been growing at more than 3-4% since the 2008 crisis. It might therefore seem logical to assume that without exceptional growth rates, we'd never catch up to the USA, Japan, Switzerland, Denmark and Sweden in terms of GDP per capita.

But can we really argue that it's impossible now that we have the historical context of countries like Singapore, Japan, Finland and even China, in more recent history? What really drove these countries to take great leaps in their development? Can we continue to say this is a zero sum game? We can't because in modern history there are so many examples of countries that through leadership and vision in the likes of Lee Kuan Yew, Deng Xiaoping, Lula or Norway's successive governments, that a country can use supply side economics of a longer term nature to make great bounds in its developmental path.

Will our short sighted politics coupled with restrictions in our constitutions and weak political party dynamics, lead us to be caught in the vicious cycle of accepting that we'll always be one of the "just above developing status pack" and that without our natural resource of oil and gas that we could never aspire for more.? Would it be naive to assume that through tight fiscal management and supply side incentives for the private sector, that we could create first class infrastructure and invest in training and educating our human resource to such a level that it would be sought out by non-extractive industries in the way that other outlier countries with less volatile growth patterns like Costa Rica and Panama in Latin America have done? Is it naive to assume that Trinidad and Tobago could become a service center with a highly skilled and sought after workforce with stable employment in nonextractive industries? A distant economist with a love for country dreams....

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Feature

Diversification necessary and urgent

By Camille McEachnie larion calls for the diversification of the economy, which began more than three decades ago, are becoming more urgent now, given instability of the worldwide energy economy and the price of oil and gas since 2010. Energy prices, though stable between 2010 and 2014, began fluctuating and have been on a downward slope ever since.

An article in the Economist, December 8, 2014, noted that oil price has fallen by more than 40 percent to US$70 since June, when it was US$115 a barrel. The Economist noted that this followed a meeting in Vienna on November 27 that year when the Organisation of Petroleum Exporting Countries, which controls nearly 40 percent of the world market, failed to reach agreement on production curbs and which sent the price tumbling. With energy being the mainstay of the Trinidad and Tobago economy, the consequent stagnation in gas production and a fall in the production of oil led to calls for the private sector, government and academia to come up with initiatives to stimulate investments in various sectors to drive diversification of the economy, away from the dependence on energy.

The crucial need for restructuring of the T&T economy became even more urgent when the country’s bond and issuer rating was downgrade from stable to negative by Moody’s Investor Services – Moody’s listing limited economic diversification as one of its reasons for the downgrade.

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The Moody rating helps international investors determine the credit risks associated with fixedincome securities investment in T&T’s bonds and securities issued externally. The downgrade, therefore, makes these investment instruments look less attractive to foreign investors leading to a potential lack of investor confidence in the country. A World Bank study on diversification, noted that for one, “openness to foreign direct investment inflows is the most fundamental driver of diversification”, also stated, that expansion of the different activities in the economy must be pursued for a country’s economic structure to change. This need to diversify the T&T’s economy and the urgency with which it must be done has not been lost on major policy makers as various government’s

including the current People’s Partnership, The University of Trinidad and Tobago is the which have sought to engage initiatives to effect Park’s largest tenant. The core campus of the economic change. tertiary level institution is located at the Park, providing avenues for training local In terms of measures taken by Government to professionals; conducting research sponsored drive restructuring of the economy, the Ministry by various industries and the managing of of Trade has been pro-active in introducing an innovations and intellectual property.

IT-based electronic product - the Single In Tobago, the Tobago House of Assembly, Electronic Window (SEW) - to facilitate a the governing institution on the island, is single entry point where standardized embarking on its own diversification thrust in information and documents can be lodged to the form of the Cove Eco-Industrial and fulfill all regulatory, import, export and transit- Business Park. Cove, Tobago’s first industrial related requirements. This one-stop-shop not park sits on a 140-acre estate and is located only decreases the cost of doing business in in one of the island’s economic hubs. The Cove Trinidad and Tobago but makes its products project seeks to encourage agro-processing, and services more competitive, globally. food industries, light manufacturing and Also, Government has introduced a Standing information technology. Since the industrial Committee on Business Development. This park’s opening in 2007, the Trinidad and Tobago advisory committee is intended to drive business Electricity Commission (TTEC) has built a 64 development and create an enabling environment MW dual-fired electricity generating plant to for various non-energy sectors; identify and the tune of TT$500 million there and the prioritize areas for development; and establish National Gas Company of Trinidad and Tobago an integrated approach to implementing is establishing a twelve-inch pipeline for natural Government's diversification agenda. gas in Tobago.

The government’s economic diversification thrust to improve the performance of the nonenergy sectors, and directed mainly through the Ministry of Planning and Sustainable Development, is articulated in The Medium Term Policy Framework (MTPF); “Innovation For Lasting Prosperity” 2011-2014. The framework outlines five economic spaces or ‘growth poles’ targeted for transformational economic change. The growth poles identified in the MTPF are located in the South West, Central, East Port of Spain and North Coast in Trinidad and the North East in Tobago.

Additionally, other areas earmarked for strategic development projects in Trinidad include the Tamana InTech Park, Invaders Bay, Chaguaramas and the City Centre, Port of Spain. At the TT$2.2 billion, 1,100-acre Tamana In Tech Park in Wallerfield, Tamana, 50 percent of the flagship building has already been leased to a foreign company. The expectation is that the Park, which promotes itself as being the “largest Science and Technology Eco-business Park in the Caribbean” - will be fully tenanted by the end of 2016.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Government’s role in spearheading restructuring of the economy in terms of policy is crucial as noted by Catherine Kumar, CEO, Trinidad and Tobago Chamber of Industry and Commerce.

“There is a lot to be done from a policy point of view in order to prescribe diversification,” Kumar said. Early this year the Chamber brought all stakeholders.-research and academia, business, public sector and the public - to a roundtable discussion so that they could discuss all aspects of diversification of the economy.

In conclusion, the general consensus is that if Trinidad and Tobago continues along the path of a continued reliance on energy, the economy will go the way of Jamaica. The World Bank Overview (March 2015) reported that for the last three decades, Jamaica’s real per capita GDP increased at an average of just one percent per year, making that country one of the slowest growing developing countries in the world.

But there are also success stories that T&T can focus on and learn from –Ireland, Singapore, South Korea and Canada are countries that T&T can look to as models for restructuring its economy.

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Feature

Do Trade Agreements work?

By Lawrence Placide (T&T Chamber’s International Trade Negotiations Unit)

overnments negotiate trade agreements for many reasons.

Primarily, of course, there should be an economic benefit to the citizens. But sometimes Governments get dragged into negotiations along with the group with which they belong. On other occasions, the interest is to enhance other parts of the multifaceted relationship between nation states in the international community. Some trade agreements are merely intended to send a political message. Many times, all Governments accept less than optimal outcomes and move forward expecting future renegotiation or the realization that the outcome is the best possible at a particular point in time.

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However, for a company or any other economic entity in Trinidad and Tobago, in services or goods, the consideration is simpler. They are not concerned with fanciful economic theories and reasoned arguments. They will consider the business case, the benefits of exporting or the growth prospects of their business. The answer for service operators is more than likely negative. Only the Economic Partnership Agreement (EPA) with Europe includes preferential access for services exporters. On the goods side, the answers will depend very much on who you ask. If a trader’s product has been included in the agreement and if they have been active in a particular market then they are likely to have benefitted. If not, invariably their response will be negative.

At the moment, Trinidad and Tobago businesses have access to more markets on a preferential basis than any of their CARICOM counterparts.

This derives from a longstanding Government policy seeking to expand market access opportunities for business. The current administration has taken this policy a step further by actively pursuing bilateral partial scope agreements, in other words, agreements between Trinidad and Tobago and markets in Latin America.

The agreements referred to above are: • Economic Partnership Agreement with Europe

• Agreement on Trade and Investment between CARICOM and Venezuela • CARICOM-Colombia Trade, Economic and Technical Cooperation Agreement • CARICOM-Cuba Trade and Economic Cooperation Agreement • CARICOM-Dominican Republic Agreement to establish a Free Trade Area • CARICOM-Costa Rica Free Trade Agreement • Trinidad and Tobago-Panama Partial Scope Agreement • Trinidad and Tobago-Guatemala Partial Scope Agreement (not yet in force) • Trinidad and Tobago-El Salvador Partial Scope Agreement (not yet in force)

concentrated among the More Developed Countries (MDCs) of CARICOM and overall trade balances had hardly been positively affected. Subsequently a formal study2 was commissioned to find the reasons behind this disappointing performance.

That study found, for instance, there were few non-tariff barriers to trade among members with which agreements were signed. There was, however, limited official export promotion and market development support for firms seeking to export to these markets (with the exception of Trinidad and Tobago). Relations with importing associations in partner countries that could promote exports from CARICOM were minimally developed. Perhaps most The scope of these varies; the Agreements with importantly, they identified significant supply Europe and the Dominican Republic are the challenges for CARICOM. most comprehensive in terms of coverage for product exports from Trinidad and Tobago. “Core problems underlying supply side The later partial scope agreements include constraints that mitigate against CARICOM more restrictive coverage but are still exports to BTA (bilateral trade agreement) advancement from the most-favoured-nation partners (section 3.3) are the smallness of most treatment enjoyed by all members of the World CARICOM companies, exacerbated by the absence of local or regional value chains, and Trade Organization. the established market and trade patterns which But, how successful, have these agreements favour exports to traditional markets. The been? Two more recent answers are provided absence of local value chains and clusters also by the United Nations Economic Commission means that successful export performance of for Latin America and the Caribbean (ECLAC) individual companies do not spill over to other and BKP Consulting for CARICOM. ECLAC firms, making it difficult to replicate summarized that: “In spite of the various trade successes.”3 agreements negotiated, CARICOM export performance has not improved significantly Other elements impacting the success of these and there has been little movement up the value agreements at the CARICOM level were: chain, particularly since subregional economies • Divergent interests within CARICOM have been unable to transform their production • Provisions not reflecting private sector interests as these interests largely weren’t systems in order to take advantage of the market involved in the negotiation access opportunities provided by these trade arrangements. In addition, production and • Low rate of ratification by CARICOM members exports of Caribbean goods are extremely specialized and along with its services sectors • Insufficient product coverage, limited overall scope, use of seasonal tariffs have been declining in competitiveness”.1 The CARICOM Secretariat had in 2010 • Institutions and non-core provisions of the Agreements not being implemented fully. reached much the same overall conclusion. It found that exports to the markets with which trade agreements were signed had not One point of agreement though is that Trinidad significantly improved. They were and Tobago exporters tend to have benefitted

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Feature most from existing trade agreements. In contrast to other countries in the region they do benefit from programs of support from the government. In addition they tend to be more closely involved in the preparation for these negotiations than other countries’ private sectors even having attended the negotiation of same. It does seem that as a result they have been more successful in getting products of interest included in the agreements.

Nonetheless, the performance in Trinidad and Tobago and these agreements could also be improved.

Trinidad and Tobago has done a decent job of putting in place official support agencies in markets with agreements. There are embassies in Brussels, London, Venezuela and Costa Rica and there is even a Trade Facilitation Office (TFO) in Cuba. I truly believe, however, that prospects in the Dominican Republic have been harmed by the lack of an official government presence in Santo Domingo. Another specific deterrent from my perspective is the product coverage of these agreements. Granted by definition most of these only include partial liberalization, another challenge is the high degree of complementarity between products produced

here and in many of the markets with which we are negotiating. This means that many directly competitive products are excluded from trade either at the behest of one private sector group or another. Normally, it must be said Trinidad and Tobago has been the less aggressive partner – also due to the restrictions of the CARICOM treaty which impacts on the offer which negotiators from Trinidad and Tobago can reasonably put forward. Still, I would think that negotiators on both sides understand the inherent limitations of working with less than full product coverage.

we have been able to in the past of creating conditions for firms to be competitive without the cover of tariff protection.. We need to create more businesses, and improve current businesses, to the point whether a competitive without the cover of tariff protection. So we have to identify existing exporters that have already reached that point, replicate their success where we can and take that knowledge into future trade negotiations. So, do trade agreements work? Within the limitations of the space I can only answer yes, but partially.

Deeper studies have shown that are inherently many more factors that impact on the ”Success” In addition, despite the prevalence of services of the trade agreements. Trinidad and Tobago in our economy and the more recent attention has benefitted more from trade agreements on promoting the export of services, we have than elsewhere in the Caribbean. It is clear. not found a way to include significantly Hence this country shall continue its quest for include its market access as part of negotiations new negotiating partners and trade agreements to date. Certainly, international trading rules 1 Sheldon McLean and Jeetendra Khadan, “An make this a difficult proposition, as do our assessment of the performance of CARICOM existing CARICOM commitments. But extraregional trade agreements: An initial scoping exercise,” in ECLAC – Studies and Perspectives perhaps it is time to consider, in the usual Series – The Caribbean – No. 41, 2015, pg. 5 open dialogue between the public and private 2 bkp Development Research and Consulting, sectors, other approaches for educating this “Identification and assessment of the underlying reasons affecting CARICOM’s trade performance the relevant service companies in the benefits under the existing bilateral trade agreements with of trade liberalization. Finally, it is clear that the Dominican Republic, Costa Rica, Colombia, Cuba we too suffer from supply-side constraints. and Venezuela,” 2014 3 Ibid, pg. 10 As a country, we have to do a better job than Contact • Vol.15 No.2 2015

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Feature

Competing on the World Stage - sharing success strategies

By Natalie Dookie

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egendary CEO, Jack Welch says, "If you don't have a competitive advantage, don't compete."

According to the Global Competitiveness Report, 2014-2015, Switzerland certainly competes, it ranked number one among 144 economies in the Global Competitiveness Index. Professor Dr. Philippe Gugler, Head of the Center for Competitiveness of the University of Fribourg (Switzerland) and Chairman of the European International Business Academy (EIBA) shared with CONTACT how Swiss firms are getting it right. "Swiss world leaders are competing in high value segments. They focus on unique value proposition strategies that create high level productivity. Innovation is the core of their value creation. Their targets are specific. They choose carefully the type of customers to be addressed and the specific customers’ needs to be served. This strategy is successful in different kinds of industries from the coffee market (e.g. Nespresso) to the pharmaceutical market (e.g. Novartis). These firms are facing strong competition in the home market and abroad. Switzerland does not have any industrial policy. It is perhaps one of the keys to Swiss firms’ competitiveness."

Do these competitiveness strategies differ for SMEs and BRICS markets? Dr. Amit Kapoor, President and CEO at the Indian Council on Competitiveness, who is also Honorary Chairman of the Institute for Competitiveness in India and an Inductee in the Harvard Business School’s - Competitiveness Hall of Fame 2012, elaborates: "Indian SMEs are globally competitive in a certain set of industries like automobiles, pharmaceuticals, information technology, knowledge

outsourcing and apparels. Each of the firms has had a distinct set of advantages that is driven by excellence across the value chain of business. At the industry level, one finds that each of these players has had a considerable degree of internationalisation, is part of the global value chains and have distinct competitive advantages." "What we see in India is the emergence of clusters across industries. The notable ones are automotive that have emerged in Gurgaon, Pune, Aurangabad, Sanand and Chennai whereas for IT and KPO the location is Gurgaon, Pune, Hyderabad, Bangalore and Chennai. Firms within various industries are focusing on marketing and branding of products, quality improvements and delivering value. The enterprises within the SME space have clearly understood that profitability is driven by controlling cost advantages or enhancing value presented to the customer. Also, another driving force for Indian enterprises has been labour arbitrage that has helped various enterprises build capabilities that are distinct."

The retail industry is usually the first to feel the impact of economic down and upturns, therefore firms have to be competitive in order to survive. Michelle Grant, Head of Retailing at Euromonitor International shares her insight.

"Sustained and meaningful global growth requires a combination of local knowledge, suitable retail premises and a proven business model. Successful multi-national retailers truly understand shoppers in different markets and adjust their prices, products and stores to meet their needs. These retailers also keep an eye on the latest in technology and harness it to improve the shopper experience."

As the Winner of the Caribbean Exporter of the Year Award 2015 as well as the Trinidad

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

and Tobago Chamber of Industry and Commerce's "Internationally Known... T&T Owned" Champion of Business award 2014, Kama Maharaj, Founder/Managing Director, Sacha Cosmetics, has certainly aced the retail industry. He shares his strategies for success: "Companies must differentiate in a meaningful way, develop a niche and target their market.

Sacha initially exported slowly and kept refining its products in order to be competitive and eventually superior in every category such as lipstick and power. We are also on the cutting edge of social media and have secured huge success with international video bloggers.

Businesses should not compete on price, as then you will only have a commodity and not a brand. It is important to build not only a brand but also brand equity."

Adam Stewart, Chief Executive Officer, Sandals Resorts International, with corporate offices in Jamaica, shares his tips for competing in a luxury category, "In the case of Sandals and Beaches Resorts, we sit alone in an enviable position at the very top end of the all-inclusive sector and therefore our strategy is relatively simple: we invest in luxury. I have never heard a guest complain about too much luxury and so that’s our guiding light. We have committed to continuous investment in our product: rooms and suites, new exciting bar and restaurant concepts, new amenities, new partnerships with world-renowned companies and the ongoing development of our people to ensure they’re providing our guests with the absolute pinnacle of customer service before, during and after their stay. It’s what sets us apart."

How does the rum and world famous bitters used in some of the cocktails served at the Sandals bars compete? Douglas Henderson,

Feature Executive Manager Sales & Marketing, Angostura Limited says, “Angostura competes on the world stage, as such we need to ensure the quality standards in our products, processes and people are world class. This is an ongoing process and one which we are committed to.”

"Guyanese firms are adopting information technology as a competitiveness tool," says Nizam Hassan, General Manager, Guyana Marketing Corporation."Guyanese companies recognise that to remain competitive in the global marketplace, they have to adapt and adopt strategies that will keep their companies, products and services in demand by customers. The ‘free market’ has made the marketplace open to all, as such, companies with greater efficiencies are able to offer their products and services at competitive prices and conditions. Some

Guyanese companies are making greater use of IT in the provision of services to their customers, whilst others have been expanding distribution capacities. Still others have been repackaging and re-sizing their product offerings to meet consumer requirements.

It is becoming clearer to Guyanese companies that they have to listen and respond to the consumer to remain competitive. Generally, the message is clear; adapt, adopt, improve or fade out of the market."

And as it begins, so it ends, with the customer experience - Group Sector Head - Services at the Ansa McAl Group, Ian Galt, adopts the adage "customer is king" as his competitiveness strategy. Companies must recognise that, "Services is not an industry - services is a culture." "Every team member needs to be trained in customer empathy – it is not a job for everyone. In fact, customer

empathy is not restricted to problem-solving, since a frustrated customer will want his feelings acknowledged before they are ready to accept any solution. Customer empathy is about being really genuinely concerned about a customer problem and owning it to closure. It’s as simple as that." The longer the problem awaits resolution, the bigger the problem is in the eyes of the customer – problems should be acknowledged and dealt with at the first and earliest opportunity.

Every team member should be empowered up to a specific monetary amount, to deal with a customer service issue. "Always apologise (for any inconvenience). Always thank (for the opportunity to serve)". In the Services culture, it is important to, "create some emotional cookies - under commit and over deliver on any service related issue and always do what you say you will do for a customer."

Contact • Vol.15 No.2 2015

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Feature

Increasing productivity - more than a formula

By Vernon Khelawan

roductivity is a word that is bandied around Trinidad and Tobago almost on a daily basis and many times in different contexts and while there is no true measurement of the productivity of the national workforce, productivity, positive or negative, depends on who is speaking and to whom since it varies from sector to sector and industry to industry. Wikipedia describes it this way: Productivity is an average measure of the efficiency of production. It can be expressed as the ratio of output to input used in the production process. Minister of Planning and Development, Senator Bhoe Tewarie had this to say about productivity in Trinidad and Tobago, “The competitiveness of a company, of industry and of a country depends on productivity and it is clear that productivity in Trinidad and Tobago needs a boost. Trinidad and Tobago needs to be more productive and competitive. We are not where we need to be.

“The TTMA is very concerned about the level of productivity in Trinidad and Tobago, because any drop in productivity erodes the country’s competitiveness.” He said the country’s manufacturers must now operate in a global environment and therefore was in competition with countries like India, China, the United States and even some countries closer to our shores, making it imperative that we strive to keep on the rise at all times. Ramdeen spoke about the long weekend syndrome which seriously affects many manufacturers. He said it is not secret that workers capitalise on public holidays to stretch the weekend and even if a holiday falls midweek, workers are known to be absent either the day before or the day after.

This is a situation that continues to erode the country’s competitiveness. Ramdeen, who is also a lecturer at the Arthur Lok Jack Graduate School of Business, admitted that “...productivity was indeed a serious problem in our country and it was necessary that a holistic conversation “Government has increased the minimum wage be initiated to involve stakeholders to deal with twice and we are witnessing a second round of the issue head-on.” wage increases through negotiations within a five-year period so workers should be better Articulating the worker’s viewpoint using a disposed to be more alert and productive in their trade union perspective, CONTACT spoke to place of work”, added the Minister. “It is President of the Communication Workers Union important, however,” he continued, “for (CWU) John Julien who stated, “Productivity organisations and workers to work collaboratively can be referred to as the capacity to perform to make work environments conducive to higher tasks in an efficient and professional manner. productivity. It is also important for work itself In order for there to be workplace productivity to be made more meaningful so that the value of there must be teamwork and a shared vision of productivity becomes obvious. “The tone of where the business is heading. As such, the role leadership, the habits of culture, style of of everyone in the industry or business must be management and effectiveness of supervision valued and all stakeholders inclusive of workers are also important to productivity. These can representatives and staff must feel empowered affect disposition and attitude. At the core, and encouraged to contribute ideas.” Julien productivity depends on how you tap spirit and added that it was an internationally accepted energy. If there is spirit alive and energy ablazing belief that a greater emphasis should be placed in a location or on a project, then productivity on improved individual and organisational will soar. So inspirational leadership and a culture productivity to ensure the creation and that motivates, can make a big difference in levels sustainability of greater national wealth and of productivity achieved,” Minister Tewarie prosperity for workers, citizens and other stated. The Trinidad and Tobago Manufacturers’ beneficiaries. He said, “The most single-factor Association (TTMA) is an organisation which productivity measure is labour productivity, is greatly impacted one way or the other by which can be expressed in terms of output per productivity. CONTACT spoke to its Chief worker or per hour worked. Labour productivity Executive Officer, Ramesh Ramdeen, who said, is therefore used to determine the efficiency of

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Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

an organisation and at the national level, it can be used to determine a nation’s standard of living relative to the other nations.” Continuing, Julien agreed that as working class citizens most of the workers’ lives at the workplace, but he asked the question. “Is it enough to simply have a job and get a pay cheque at the end of the month?”

He added, “Surely that is not acceptable.” He said, “This business has to be driven by efficiency and achievement which would produce tangible results for the organisation and favourable rewards for the employee. While productivity is a major concern for employers, lower productivity levels cannot be blamed on the employees entirely. Factors such as workplace environment, working conditions, compensation packages and workplace culture all influence productivity.”

Dr. Goran Hutlin, Executive Director of the Employment Sector of the International Labour Organisation (ILO) has said, “Sustained productivity improvement depends on the enterprise’s human capital, that is the skills, knowledge, competencies and attitudes that resides in the employee…and its social capital, namely trust and confidence, communication, co-operative working dynamics and interaction, partnership, shared values, teamwork etc.”

Professor of Business and Society at Cass Business School at City University London, Peter Fleming, wrote recently that a study of overworked management consultants in the United States, found that 35 percent employed in the occupation actually “faked” an 80-hour work week. He wrote, “For various reasons these individuals pretended to sacrifice themselves on the altar of work and still got everything done.”

Fleming stated, “Like it or not we are moving into a post-work future. According to some estimates, half the eligible global workforce is currently unemployed. Technical innovations are exponentially automating routine, manual labour and now cognitive work too. Our workcentric society is swiftly becoming obsolete. No matter how much governments bribe the business sector with tax breaks and subsidies to keep people employed in needless jobs, the necessity of work is rapidly disappearing.”

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Feature

Labour - a key to competitiveness

By Nazma Muller

avid (not his real name) has been in Trinidad for the last seven years.

For the first five years he worked at different fast-food outlets until he could save to start out on his own. He now has his own food business, a new car and he lives in a middle-class neighbourhood. But he still has to work six days a week, from 3:00 pm till midnight, on his feet most of the time, and he is renting the three-bedroom house that he shares with his brother.

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who are employed in the CEPEP and URP today would be very productive people if they went to various other countries because they would have no choice but to be part of the workforce. It is not that they are incapable and unable to perform these functions - it is an attitudinal cultural issue. We are at a juncture that we need to deal very seriously with,” he said.

After the meeting, Bharath told reporters that he hoped to begin the process of With Trinidad and Tobago experiencing a formalising the absorption of CEPEP workers severe labour shortage, employers may think into the private sector within a month. “It is importing workers or regularising illegal not a simple thing whereby you can just immigrants is the solution. And it is – partly. import labour,” he said. “You’ve got to look Especially since many have degrees, like at the other side of the issue which is that David, who studied English at university and there are social costs, there are issues could, with some training, work as a translator regarding burdening the health sector, other or a tutor for locals studying his native tongue. issues of schools, transportation. “Obviously However, neither he nor his brother wants to the more people you bring into a programme work for a Trinidadian boss; they prefer to like that, you have impacts on other social be their own. aspects of the economy.” he said.

For those who are unionized, the gains made through collective bargaining have made their jobs secure and fairly well-paid by regional standards. However, the private sector that is non-unionised, such as the immense and constantly growing fast-food franchises, is considered unattractive because of the low wages and long hours. In the absence of flexitime, the option of working from home, and State-subsidised nursery, daycare and babysitting services, single parents prefer to work for a few hours a day as part of the Community-based Environmental Protection and Enhancement Programme (CEPEP) and Unemployment Relief Programme (URP).

At the T&T Manufacturers’ Association’s AGM in April at the Trinidad Hilton, Trade Minister Vasant Bharath conceded that “governments past and present have, to some extent, crowded out the private sector.”1 “Now what that has caused is an attitudinal problem more so than a skill-set issue. Many 1

Arthur Lok Jack, Chairman of Associated Brands Industries Limited, told the TTMA’s AGM that the labour shortage was preventing the manufacturing sector from expanding its production. However, his workers knew they would not be fired easily because it would be difficult to find replacements, so they behaved, Lok Jak said, “in the worst possible way”. He continued: “We tried psychology, training this, that and the other. High absenteeism is the final result; the reason for that is a low unemployment rate of three percent.”

One solution to T&T’s labour shortage and resulting lack of competitiveness is the tripartite model, and among the most successful of these is the Singapore model of tripartism. Although Singapore is much more homogenous than T&T in terms of demographics, its history and culture, it may be possible to adopt and adapt some of the key lessons of its impressive track record of peaceful industrial relations.As it stands,

T&T’s unpredictable industrial relations climate can be intimidating for foreign investors, and all of the major players will agree that an alternative solution is urgently needed. Singapore’s model of tripartism has been referred to as a “social partnership” between the Government, employers and workers, where all parties still represent their own interests, but they also negotiate and align these towards national objectives of economic and social development.

Germany and Austria also use this type of centralised tripartite social partnership, and labour economists have long noted that countries with some form of tripartite partnership experience better economic and social outcomes, including efficiency, growth and social equity. Singapore’s tripartite model institutionalises structures and processes that bring together and align interests between the State, the private sector and the labour force.

The trade unions encourage continuous learning and upgrading of skills, which in turn creates a pool of high-quality human capital for employers to choose from. In return, the employers contribute to economic growth and the transfer of knowledge and skills to the labour force.

But key to this model is the need for workers to compromise on wage increases and benefits in return for national economic growth, which will sustain employment and overall wages through redistribution of revenue. Singapore’s unions take the broader view of supporting employment for all workers, rather than protecting only unionised ones.

The Government’s role then would be to leverage culture, structures and leadership within the tripartite partnership to chart a new national course for growth. The State must also provide resources such as convening capital and labour where necessary to attain national objectives.

(“State blamed for labour shortage: Bharath - Imported workers not an option”, Trinidad Guardian, Friday, April 24, 2015.)

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Feature

Combatting white collar crime

By Gavin Luke he 2014 Global Corruption Perception Index, published by Transparency International, ranks Trinidad and Tobago unfavourably at 85 out of 175 countries. It can easily be assumed that the recent FIFA investigation will further deteriorate our standing. Such reports can impact negatively on a country’s international image, economic growth and Foreign Direct Investment. The index serves as a reminder that all sectors of any economy must take responsibility for regulating itself to improve its external imaging. The Federal Bureau of Investigations (FBI) defines White Collar crime as "those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence". This includes crimes against resources and assets and even environmental and health and safety law violations.

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In Trinidad and Tobago, based on the crime statistics of the Police Service, an average of 271 persons were prosecuted over the period 2001-2004. These were mostly crimes pertaining to fraudulent activities conducted by employees against employers. However apart from those are crimes that can occur via corruption in State-owned projects, money laundering, conveniently using oversees consultants, fraudulent invoices, the absence of functional procurement policies and even poor governance and inaccurate reporting on the part of both the private and public sector.

Specifically by virtue of our geographic location in relation to drug producing countries and the apparent strength of our financial systems we remain attractive for the purposes of “cleaning” illicitly obtained proceeds which in itself questions the integrity of our frameworks. It should be noted that Money Laundering can also occur outside the recognized financial system via such avenues of casinos and online gambling and high value asset acquisition.

The Financial Intelligence Unit (FIU) of Trinidad and Tobago, incorporated under the Financial Intelligence Act of 2009 functions

to investigate money laundering, Suspicious Activity Reporting(SAR), confiscation according to the Proceeds of Crime Act 2000 and implement compliance programmes by financial institutions. The FIU has improved on the level of reporting white collar crime and according to their recent reports, Suspicious Activity Reporting increased from 111 to 617 reports over the period 2010 to 2014. A notable 199 reports in the most recent numbers are related to potential money laundering issues. The Caribbean Financial Action Task Force (CFATF) an organization of states and territories of the Caribbean basin has agreed to implement common counter-measures against money laundering.

The CFATF’s expectations focus around making the money laundering legislation more effective by way of convictions, which itself raises the question of enforcement in spite of growing SAR statistics. A number of key and core recommendations extended by the CFATF remain unaddressed or incomplete. If our global reputation is to improve, resolution of areas of noncompliance must be reviewed.

Specific to the Public Procurement and Disposal of Public Property Act, 2015, it became law on January 14, 2015. The Act seeks to reform the procurement laws of Trinidad and Tobago in keeping with principles of good governance, such as accountability, integrity, transparency, and value for money. It defines “Public Procurement” as the acquisition of goods, works or services involving the use of public money. “Public Property” means real or personal property owned by a public body inclusive of Executive, Judicial and Presidential authorities. The challenges of this initiative is that it must now justify itself by established guidelines, standardised bidding documents, procedural forms and relevant documents for use in public procurement to build confidence in its purpose. The Act stipulates that failure of compliance without reasonable justification can lead to conviction and a fine of $100,000.00. T&T must continue to seek success in its efforts by being fully committed

to international efforts to combat money laundering and corruption in particular. With the government being the largest purchaser of goods and services in the country, procurement cannot be perceived to rely on a few preferred contractors. Greater transparency must occur via comprehensive databases on public procurement and tenders received inclusive of the value of contracts and other information of public interest.

Beyond Compliance and Enforcement, deterrents must also include tagging works or services or retention or disposal of public property that is not done in accordance with the Act as being voidable. Ensuring best practices on matters of procurement will also mean the relevant institutions take the lead in educating business people and suppliers to become more in tune with proper standards, accreditations and the correct contract development protocols.

Specific to the FIUTT’s Annual Report of 2014, Director Susan Francois cited improvements that would include increasing the outreach and awareness for SARs reporting, redefining the offence of Money Laundering to make it easier to prove and continuous National Risk Assessments to continuously identify vulnerabilities in our systems for white collar crime. Apart from the highly trained senior staff at the FIUTT the need is for more specialist skills and expertise in the field of forensics and audits in the wider business community and moreso in the areas of Anti-Money Laundering legislative and financial crime detection and prevention. On the flip side the consideration of protective legislation for whistleblowers also becomes an issue. Further recommendations could also include tighter controls and supervision for credit unions and even measure to restrict criminal interests in gambling and betting houses. With the existence of Integrity in Public Life Act of 1987, this must prove to be a functioning Act. Should all else fail, maybe an overhaul and cultural reboot can commence with Integrity and Ethics conversations at primary schools to perhaps put the next generation in better standing.

Contact • Vol.15 No.2 2015

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Feature

The Diversification imperative

By Ewart S Williams and Richard P Young o any casual observer, Trinidad and Tobago is a striking example of a developing country that has made good use of its natural resource endowment - oil and gas - to increase its level of development and raise the living standards of its population. However, notwithstanding various attempts over the past few decades, “to sow the oil”, the development of a competitive, dynamic and innovative nonenergy export sector has been illusive.

Trinidad and Tobago is, by international standards, a very small oil producer. At its peak in 1978, oil production averaged 230,000 barrels per day. Oil gave way to natural gas in the 1990s and in 2006, oil and gas output reached 800,000 barrels per day oil equivalent.

While the new gas discoveries, combined with the surge in international oil prices, resulted in a major economic boom from the late 1990s, these factors also significantly increased the economy’s dependence on the oil and gas. Heavy dependence of an economy on one sector has always been recognized as a major source of economic vulnerability.

The risk is compounded if the dominant sector is mineral resource-based. In such circumstances, the case for diversification rests on several grounds.

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manufacturing sector, around the middle of the 1970s, the Government of the day embarked on a strategy which essentially involved using the new discoveries of natural gas to expand the frontiers of the energy sector. This strategy, which gave rise to the creation of the Point Lisas Industrial Estate, has come to be considered as a model of downstream energy sector development for small countries.

As a result of this strategy, Trinidad and Tobago is now a major exporter of methanol, ammonia and urea. With our four Liquefied Natural Gas (LNG) plants, Trinidad and Tobago was up to recently, the major supplier of LNG to the East Coast of the U.S. For many, the Point Lisas complex remains our most visionary economic decision since Independence.

To compound the situation, since 2002, there has been a steady fall in the level of proven oil and gas reserves. The 2014 Scott-Ryder report puts the level of proven gas reserves at the equivalent of eight years, and for oil, twelve years.

Admittedly, interest in oil and gas exploration has been on the increase. Even if ongoing exploration activities are successful, the changing global supply situation, reflecting the boom in shale gas production could seriously alter the global supply/demand balance with negative consequences for long term oil and gas prices. (It is worth noting that Trinidad and Tobago is a high cost oil and gas producer and that deep-water exploration is a high cost business. If oil prices plateau at around US$ 60 per barrel as many analysts expect companies would certainly need to re-assess their exploration plans and some will certainly shift investment to lower cost producers – the newly-emerging oil and gas producers. The future is indeed stacked against our energy sector).

Unfortunately, however, this impressive petro-chemical complex has made our economy even more dependent on oil and gas. Moreover, the vulnerability of the economy has remained, given the dependence of the petro-chemical sector on gas and the At the very least, an intensification of the high degree of price correlation between oil diversification effort is urgently need to protect and gas. against the downside risk of imminent oil and gas depletion and/or the radical changes that Firstly, diversification provides some Running Out of Time are likely to be faced by the Trinidad and insurance against the inherent volatility of The uncertain outlook facing our energy Tobago petroleum sector. mineral resource prices. Secondly, mineral sector, because of both external and domestic resources are not large employers of labor factors, now makes the need for the A reasonable conclusion is therefore that, and create few sectoral linkages. Thirdly, and diversification of the economy both urgent while oil and gas have been mainly responsible perhaps the most compelling reason, is that, and critical. for the high living standards enjoyed by the at some stage, the natural resources will be Trinidad and Tobago population, it is highly fully depleted and the economy will need to Global energy markets have recently unlikely to be able to take us much further. undergone major structural changes, which There is no doubt that it would take a more have alternative growth engines. have contributed to a decline of about fifty diversified economy to maintain or enhance Point Lisas: Expanding the Frontiers of per cent in world prices over the past nine our current living standards. In the jargon the Energy Sector months or so. While not as dramatic, gas of the economists, economic diversification As far back as in 1969, stated strategy of the prices have also seen an appreciable decline. has now become a necessary precondition for First Comprehensive Five-year Development As regards domestic supply, oil production our medium term sustainability.

Plan was “ to convert the rents from the is now a mere 85,000 barrels per day and offshore economy to build a vibrant, natural gas output has also been on the Another article will discuss the role of an internationally competitive onshore decline. In fact, the current shortage of natural International Financial Centre as one pillar economy”. Following failed attempts to gas supplies has raised questions about the of a feasible diversification strategy. establish a viable, globally–competitive light future viability of the petro-chemical sector.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

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Feature

“Be in the world not just of it”

By Catherine Da Silva

lobally business leaders have common denominators of resilience and fortitude that puts down the first layer for achieving phenomenal goals, sustainable plans and legacies. The above title is quoted from Dave Ramkissoon, Chairman of the EIL Group of Companies, who believes that to be a keen competitor requires a most evident presence in life that engages with relevant and sometimes seemingly insurmountable challenges.

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The company, which has managed to carve out a competitive edge, has been in business some 30 years. Competitiveness pertains to the performance of a firm or country and its ability to sell and supply goods and services in a given market relative to performance indices from other sub-sectors within similar markets .

The World Economic Forum defines competitiveness as a set of factors or indicators which determine the level of productivity of a country in its overall performance. Its Global Competitiveness Report lists the following as the top 12 benchmarks of competitiveness: Institutions, Infrastructure, Economic environment, Health and Primary education, Higher Education and Training, Goods and Market efficiency, Financial market development, Technological readiness, Market size, Business sophistication, and Innovation.

In 2014 T&T ranked 89th out of the 144 measured, with countries such as Singapore, the USA, Thailand, Germany, Japan, Hong

Kong, Netherlands, UK, Sweden, Norway quarterly newsletter and regular team meetings being among the top ranked competitive including an earmarked Innovation committee nations in recent years. affords EIL the opportunity to track and harness strategies for continuous improvement.

The Founding Chairman of the EIL Group "We are serious about creating and managing of Companies cites innovation as a key a culture of innovation," he says. element in ensuring a competitive advantage.

The Group's business portfolio comprises Ramkissoon lists EIL’s 5 pillars for growing EIL, Agos and Century Eslon - acquired over its people: Strategy that is People centred; the past 7 years. According to Ramkissoon, Leadership with professional and personal it starts with how a company employs, humility; Culture of execution/action oriented; motivates, and retains its human resources. Enabling environment -one that that thinks, In the execution of human potential, creates and manifests results better, faster and innovation flourishes. It is the coup de gras, with fine tuned accuracy and Process charting. says Mr Ramkissoon who also favours spirit- Support for all organisational processes and centred leadership. Human response, goals are linked to total efficiency and performance and surpassing usual effectiveness for zero defects approach to performance standards comes from the "head business. and heart" of business. He equates Innovation in the midst of this as the engagement of EIL's Process Management system is aligned business wisdom, including thinking "outside with its Board’s overall strategic plans. It of the box". "You only know a leader when further forms the framework for good they face the perfect storm." governance and performance thereby adding greater value to its competitive advantage.

In 1981 Ramkissoon started the Ramkissoon credits EIL's conformance and company Dave Enterprises with the nurturing of good ethics and governance to production of Electrical products and a small EIL's ability to enter otherwise difficult team. Today EIL employs over 600 persons markets of North America and other foreign and has excelled as a major non-oil exporter markets that demand "above board" behaviour. to Canada, the USA CARICOM, Brazil and “Doing the right thing inspires the right thing other non-English speaking markets. Export and builds intrinsic value and demand for accounts for over 75 percent of the main your products or services, he says. “Customers revenue centres of EIL. understand when they are doing business with an efficient entity and ultimately they choose Ramkissoon notes that “To penetrate non- a supplier of this stature.” traditional markets we have invested heavily in training, implementing robust management He closes on a favoured quote from founder planning and performance measurement of South West Airlines, Herb Keller:"No grief schedules with reward and for our team as a goes unattended, no joy unshared. Each natural by-product for exceptional achievement is celebrated and those requiring performance. Communication via our help receive it

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

What every business person should know

CHILE

Trade Shows 2015

CONEXPO Latin America! - October 21-24, 2015, Santiago, Chile Breaking New Ground in Latin America! The owners and organizers of the world-renowned construction equipment trade show, CONEXPO-CON/AGG in Las Vegas, are bringing 100 years of experience to the Southern Hemisphere. This exciting new event launches October 21-24, 2015 in beautiful Santiago, Chile.

The Show will bring together international experts, equipment, and groundbreaking technologies. Subsequent shows will be held in various cities throughout the region to create a cohesive network between manufacturers, distributors, and their customers from all over Latin America.

Visit: http://www.conexpolatinamerica.com/eng/ We’ll see you at the show!

TRINIDAD AND TOBAGO Cooperation Agreement between T&T Chamber and Cuba Chamber On 11 and 12 June, 2015 the Trinidad and Tobago Chamber of Industry and Commerce (T&T Chamber) led a Fact Finding Mission to Cuba with a delegation of seventeen companies. Participating companies included food and beverage, pharmaceuticals, construction, energy services, furniture, shipping, travel and tourism and banking. The T&T Chamber and the Chamber of Commerce of the Republic of Cuba signed a Cooperation Agreement on 11 June, 2015 with the objective of promote and strengthen expansion of trade, economic ties and contacts between the business communities of Cuba and Trinidad and Tobago. Both parties also agreed to exchange information on direct investment opportunities and related regulations facilitating the establishment of contacts on a corporate level in both countries.

For further information on accessing the services available under the Cooperation Agreement please contact the Trade and Business Development Unit at 637-6966.

Trade and Investment Conference, July 8th & 11th 2015, Centre of Excellence Trinidad and Tobago TIC takes place at the crossroads of the Americas, in Trinidad and Tobago, the region’s financial capital and the largest economy in the Caribbean, with strong links to Central and South American companies and businesses from around the globe!

The multi-sectoral tradeshow brings together local, regional and international businesses. Exhibitors with thousands of products meet hundreds of buyers seeking new suppliers, goods and services. With structured networking events, a cutting-edge business education programme and assistance from an experienced team on hand to provide expert guidance and matchmaking services, you’re sure to succeed at TIC! http://tic-tt.com/index

UNITED STATES ASIS International 61st Annual Seminar - September 28 – October 1, 2015, Anaheim California The comprehensive array of the hottest topics spanning across industries will provide the tactical ideas and inspiration you need to solve your toughest challenges.

The educational offerings at ASIS 2015 and (ISC). Congress span industries and disciplines to address the complex challenges facing today’s security management and cyber security professionals. From current and emerging issues to industry best practices, you’ll find a wealth of information and topics to choose from.

There’s something for everyone in this peer curated program. https://securityexpo.asisonline.org/Pages/default.aspx POWER-GEN International 2015 - December 8-10, 2015, Las Vegas POWER-GEN International is the world's largest power generation event focusing on the industry's latest innovations, technical trends and business strategies.

POWER-GEN International includes a broad range of qualified power professionals with the power to purchase. Throughout the years, POWER-GEN International has covered it all, providing a world stage for the innovations, ideas and solutions that have formed our industry.

With a record-setting expected attendance of more than 22,000 attendees and 1,400 exhibitors, there's simply no other place to be for education, networking and new business development. http://www.power-gen.com/index.html

Communications Committee The Communications Committee is a Boardappointed Committee of the Chamber, chaired by the sitting President. Its role is to conceptualise and execute the Chamber’s communications strategy as guided by the Board of Directors. As such the committee oversees the publication of CONTACT magazine, three weekly newspaper columns, a weekly radio programme, media releases and other electronic newsletters and bulletins.

Guardian newspaper. CONTACT may be read online at www.contact-tt.com.

The weekly “CONTACT with the Chamber” radio programme airs on I95.5 FM at 7:25 a.m. each Tuesday. It represents a Chamber editorial and is voiced by the Chamber’s Chief Executive Officer, Catherine Kumar.

Programmes are available on the Chamber’s website www.chamber.org.tt and Facebook.

Each CONTACT magazine is thematic so that two thirds of the articles explore the issues related to the particular theme. The magazine is distributed free of charge to Chamber members. Complimentary copies are given to Members of Parliament, diplomatic missions, hotels and subscribers to the

The main issues that form the basis of the Chamber’s lobbies are largely reflected in the newspaper columns. Since 2004, the Chamber has maintained three weekly newspaper columns - Wednesdays in the Business Express and Thursdays in both the Guardian Business and the Newsdays Business Day. Writing on the premise that all issues which affect the

national landscape also affect business, the columns serve to express Chamber opinion and policy. Topics for articles have included the economy, trade, crime, education, agriculture, health, the environment and culture. The committee encourages Chamber members to submit columns or ideas for columns on topics of interest. Columns may be between 700-900 words in length and the Chamber reserves the right to publish, subject to review by the Committee. The weekly columns may be accessed on the Chamber’s website at www.chamber.org.tt.

For further information on this committee kindly contact Halima Khan, Communications Officer, Marketing and Communications, at 637-6966 x 1227 or email hkhan@chamber.org.tt.

Contact • Vol.15 No.2 2015

29

30

Finance & Economy

Economic and Financial Statistics Trinidad and Tobago Table 1: Summary of Balance of Payments INDICATOR Current Account Trade Balance Exports Energy Non- Energy Imports Energy Non Energy Services (Net) Income (Net) Transfers (Net) Capital and Financial Account Private Sector Direct Investment Portfolio Investment Commercial Banks Other Private Sector Capital* Public Sector** Overall Balance

2009 1,632.8 2,241.2 9,221.4 7,884.6 1,336.8 6,980.2 2,845.6 4,134.6 381.7 -1,017.1 27.0 -2,345.4 -2,622.8 709.1 -62.9 -701.7 -2,567.3 277.4 -721.6

2010 4,172.3 4,735.4 11,238.9 9,314.9 1,924.1 6,503.5 2,664.4 3,839.1 487.6 -1,079.5 28.8 -3,753.9 -3,213.9 549.4 -67.3 493.9 -4,189.0 -540.9 418.4

2011r 2,898.5 5,433,0 14,943.9 12,597.5 2,246.4 9,510.9 4,308.5 5,202.4 506.3 -3,073.9 33.1 -2,145.9 -1,850.5 770.6 -84.7 -309.8 -2,226.6 -295.4 752.6

2012p 823.6 3,918.0 12,983.4 10,569.3 2,414.1 9,065.0 3,942.0 5,123.0 261.2 -3,389.5 33.1 -1,445.6 -819.6 772.1 -445.8 -668.7 -477.2 -626.0 -662.0

Source: Economic Bulletin February 2015 r- revised p – provisional p Provisional. Central Bank estimates for the period Mar ch 2012 to September 2014 are based on comparative mirror trade data with the rest of the world, and supplemental data on activity in the energy sector.

2013p 1,828.6 3,898.8 12,769.6 10,854.2 1,915.4 8,870.8 4,891.9 3,978.9 272.4 -2,367.7 25.1 -1,042.3 -1,106.2 1,169.9 -100.1 94.1 -2,270.4 63.8 786.3

Jan-Sep 2013p 2,996.9 4,270.9 10,168.3 8,643.1 1,525.2 5,897.4 3,318.6 2,578.8 350.1 -1,651.0 26.8 -2,770.0 -2,452.9 793.2 -50.4 81.3 -3,2770 -317.2 226.8

Jan-Sep 2014p 1,797.5 3,268.6 9,082.2 7,719.9 1,362.3 5,813.7 2,597.1 3,216.5 278.8 -1,749.6 -0.3 -1,665.2 -1,454.1 703.7 -104.6 -117.1 -1,936.1 -211.1 132.3

* **

Includes Errors and Omissions.

Includes Official Borrowing, State Enterprises, Heritage and Stabilization Fund, Other Assets and Other Liabilities. *** End of Period.

Table 2: Ease of Doing Business Index

Year

Ranking

2015

79 (out of 189 countries)

No. of Reforms 3

2014

66 (out of 189 countries)

1

Ease of Doing Business 2013

69 (out of 153 countries)

2

2012

76 (out of 183 countries)

0

2011

97 (out of 183 countries)

0

2010

81 (out of 181 countries)

0

Source: Ease of Doing Business co-published by the World Bank and the International Finance Corporation (Various Years)

Regional Indicators Table 1: Real GDP Growth: Selected Caribbean Countries (Percent) Country

2010

2011

2012

2013

2014

2015f

2016 f

2020 f

The Bahamas

1.5

1.1

1.0

0.7

1.3

2.3

2.8

1.5

Barbados

0.3

0.8

0.0

0.0

-0.3

0.8

1.4

2.0

Belize

3.1

2.1

3.3

1.5

3.4

2.0

3.0

2.5

Dominican Republic

8.3

2.8

2.6

4.8

7.3

5.1

4.5

4.0

Guyana

4.4

5.4

4.8

5.2

3.8

3.8

4.4

3.2

Jamaica

-1.5

1.4

-0.5

0.2

0.5

1.7

2.2

2.7

Suriname

4.2

5.3

4.8

4.1

2.9

2.7

3.8

4.2

Trinidad and Tobago

-0.1

0.0

1.4

1.7

1.1

1.2

1.5

2.0

Latin America & Caribbean

6.1

4.9

3.1

2.9

1.3

0.9

2.0

3.0

Source: WORLD ECONOMIC OUTLOOK: UNEVEN GROWTH—SHORT AND LONG-TERM FACTORS

f: Forecast

Table 2 Selected Caribbean Economics: Real GDP, Consumer Prices, Current Account Balance Real GDP

Consumer Prices Projections

Trinidad and Tobago

Current Account Balances

Projections

Projections

2014

2015

2016

2014

2015

2016

2014

2015

2016

1.1

1.2

1.5

7.0

7.3

5.7

8.3

5.2

4.4

Barbados

-0.3

0.8

1.4

1.9

1.3

1.4

-9.3

-5.1

-5.9

Jamaica

0.5

1.7

2.2

7.1

5.9

7.1

-6.4

-5.0

-4.6

Guyana

3.8

3.8

4.4

1.0

1.2

2.6

-15.9

-16.4

-21.9

Dominican Republic

7.3

5.1

4.5

3.0

1.6

3.5

-3.1

-2.4

-3.0

Suriname

2.9

2.7

3.8

7.0

7.3

5.7

-7.3

-7.8

-6.9

The Bahamas

1.3

2.3

2.8

1.2

2.3

1.6

-21.6

21.6

-8.2

Source: WORLD ECONOMIC OUTLOOK: UNEVEN GROWTH—SHORT AND LONG-TERM FACTORS

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Finance & Economy

31

Economic and Financial Statistics Regional Indicators Table 2: Doing Business 2015 ICountry Jamaica Trinidad and Tobago Dominican Republic Antigua & Barbuda Dominica Grenada Suriname Regional Average (Latin America & Caribbean)

Ranking 58 79 84 89 97 126 162 100

DB 2015 Reforms 3 3 3 0 0 0 1

Source: The World Bank & International Finance Corporation: Doing Business 2015

International Indicators Table 1: Advanced Economics - Quarterly GDP Growth Quarterly Per Cent Change 2014 QII 4.6 0.8 0.1 -1.9

QI -2.1 0.9 0.3 1.6

United States United Kingdom Euro Area Japan

Sourced: tradingeconomics.com

QII 5 0.6 0.2 -0.6

2015 QI 0.2 0.3 0.3 0.4

QIV 2.2 0.6 0.3 0.4

QII 2.81 f 0.62 f 0.23 f 1.1 f

F: Forecasts

Table 2: Rate of Unemployment in Developed Countries Quarterly Per Cent Change 2014 Sep 13 7.2 8 7.

11.9 4

May 13 7.6 7.

12 4.1

United States United Kingdom Euro Area Japan

Jan 14 6.6 6 7.

11.8 3.7

2015 Sep 14 5.9 56 11.5 3.6

May 14 6.5 2 6.

11.6 3.5

Jan 15 5.7 5.7 11.4 3.6

Apr 15 5.5 5.6 11.3 3.4

Sourced: tradingeconomics.com

Table 3: Advances Economics: Real GDP, Consumer Prices, Current Account Balance and Unemployment Real GDP

Advanced Economies United States 4,5 Euro Area Japan 4 United Kingdom Canada Other Advanced 6 Economies

Consumer Prices1

2014 1.8 2.4 0.9 -0.1 2.6 2.5

Projections 2015 2.4 3.1 1.5 1.0 2.7 2.2

2016 2.4 3.1 1.6 1.2 2.3 2.0

2014 1.4 1.6 0.4 2.7 1.5 1.9

Projections 2015 0.4 0.1 0.1 1.0 0.1 0.9

2016 1.4 1.5 1.0 0.9 1.7 2.0

Current Account 2 Balances Projections 2014 2015 0.4 0.6 -2.4 -2.3 2.3 3.3 0.5 1.9 -5.5 -4.8 -2.2 -2.6

2.8

2.8

3.1

1.4

1.1

1.9

4.8

4.9

3

Unemployment

2016 0.4 -2.4 3.1 2.0 -4.6 -2.3

2014 7.3 6.2 11.6 3.6 6.2 6.9

Projections 2015 6.9 5.5 11.1 3.7 5.4 7.0

2016 6.6 5.1 10.6 3.7 5.4 6.9

4.3

4.7

4.7

4.6

Source: WORLD ECONOMIC OUTLOOK: UNEVEN GROWTH— SHORT- AND LONG-TERM FACTORS Note: Data for some countries are based on fiscal years. Please refer to Table F in the Statistical Appendix for a list of economies with exceptional reporting periods.

1 Movements in consumer prices are shown as annual averages. Year-end to year-end changes can be found in Table A6 in the Statistical Appendix.

2 Percent of GDP. 3 Percent National definitions of unemployment may differ.

4 Based on Eurostat’s harmonized index of consumer prices.

5 Exculdes Lituania. Current account position corrected for reporting discrepancies in intra-area transactions.

6 Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries but includes Lituania.

Contact • Vol.15 No.2 2015

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Finance & Economy

Economic Outlook OUTLOOK Global growth is likely to strengthen in 2015 especially as the U.S. economy recovers. The International Monetary Fund (IMF), in its latest forecasts, put global economic growth at 3.5 percent in 2015, up from an estimated 3.3 percent in 2014. This growth will be assisted by the low oil price environment, which is expected t o persist for much of 2015. Growth in advanced economies is estimated at 2.4 percent in 2015 compared to 1.8 percent in 2014, largely on account of increased momentum in the US economy. However, activity in the Euro area is expected to remain relatively subdued in 2015 as economies, particularly those in the periphery, grapple with financial fragmentation, high debt and elevated unemployment. Deflation risks are also becoming more prominent. Emerging and developing economies will continue to contribute the bulk of global growth, but the pace of growth will be decidedly slower because of domestic structural issues as well as adverse exogenous factors. As advanced economies continue to expand, the Caribbean region is likely to benefit through increased tourist arrivals. This could be an important fillip for growth in the tourist-?dependent economies, though easing of travel restrictions on Cuba could result in some destination diversion within the Caribbean .In addition, and ongoing macroeconomic challenges in a number of Caribbean economies may limit growth prospects.

Downside Risks to global growth include increased geopolitical tensions, financial market shocks in response to monetary policy

normalization in the US and macroeconomic disappointments in systemically important countries. Regarding Geopolitical tensions, increased strife in the Middle East Or further unrest between Russia And Ukraine Can trigger a sharp rise in oil prices, a disruption in the transportation of natural gas or crude oil or an escalation of sanctions and counter--?sanctions, thereby disrupting trade and finance. The Risk of deflation in several advanced economies, particularly in the Euro area, continues to pose a threat to global activity. Meanwhile A faster--?than-?expected increase in US Interest rates may ignite significant capital outflows in several developing and emerging economies, giving rise to possible sharp asset re--?pricing and currency volatility.

With The expectation of slightly higher levels of domestic energy production, real GDP Growth in Trinidad and Tobago is expected to increase in 2015. Non-energy GDP growth, however, may moderate due to falling domestic demand as the government’s ability to stimulate activity could be constrained by lower revenues. The January 2015 Recalibration of the national budget signals a downshift in government expenditure, but the impact on growth may not be as severe given that spending in critical areas such as healthcare, education, housing and security will continue. Unemployment is expected to remain low, but inflationary pressures may persist given the volatility in food prices.

The Chamber’s “CONTACT with the Chamber” radio series The Chamber's "CONTACT with the Chamber" radio series is a five minute programme which airs every Tuesday at 7:25 a.m. on the I95.5FM morning show. This programme is voiced by the CEO of the Chamber, Catherine Kumar and is one of the means by which the Chamber communicates with members and the public at large. The series focuses on business-oriented subjects, social responsibility and other issues affecting our country.

We also open our doors to all members interested in coming on board as short-term sponsors of “CONTACT with the Chamber”, for packages of one, two or three months.

Sponsorship is at a cost of TT $900.00 per programme. Your organization will be credited on I95.5FM and recognized through other communications produced by the T&T Chamber.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

For more information on sponsorship and branding opportunities please contact: Halima Khan, Communications Officer, Trinidad and Tobago Chamber of Industry and Commerce Columbus Circle Westmoorings P.O Box 499 Port of Spain.

Tel: (868) 637-6966 Ext. 1227 Fax: (868) 637-7425 Email: hkhan@chamber.org.tt Website: www.chamber.org.tt

Finance & Economy

35

First quarter 2015 review Local Market Summary The performance of the Indices on the local equity market was mixed for the First Quarter of 2015 (Q115). The Composite Index rose a minimal 0.29 per cent or 3.34 points to close the three month period at 1,154.25, the All Trinidad and Tobago Index declined 0.57 per cent or 11.22 points to end at 1,971.96 and the Cross Listed Index closed Q115 at 44.12, up 5.75 per cent or 2.40 points. In Q114, the Composite Index, All Trinidad and Tobago Index and Cross Listed Index posted declines of 1.16 per cent, 0.33 per cent and 5.68 per cent respectively. The advance to decline ratio ended the quarter at 10 to 15.

commanding 21.58 per cent of the market with 3,708,034 shares traded. The second volume leader was Sagicor Financial Corporation (SFC) with 14.83 per cent of the trades for the quarter or 2,548,155 shares traded. National Commercial Bank Jamaica Limited (NCBJ) followed with 12.21 per cent of the total volume traded or 2,098,447 shares changing ownership. Next was First Citizens Bank Limited (FIRST) which captured 10.46 per cent of the market activity in Q115 with 1,797,566 shares crossing the floor of the exchange. Next was Jamaica Money Market Brokers Limited (JMMB) with 10.05 per cent of the trade volume or 1,727,886 shares traded.

Q115 also saw 60,000 Sagicor Financial Corporation Convertible Redeemable Preference (SFCP) shares traded with a value of US$66,000.00. The price remained unchanged at US$1.10.

On the TTD Mutual Fund Market, a total of 5,319,157 CLICO Investment Fund (CIF) units traded in Q115 with a value of $120,742,775.40. CIF’s price fell 2.39 per cent or $0.55 to close Q115 at $22.51.

The major advance for Q115 was NCBJ, up a noteworthy 35.65 per cent or $0.41 to end the period at $1.56. National Flour Mills Limited (NFM) was next, up 30.43 per cent or $0.35 to $1.50. The third major advance was Guardian Holdings Limited (GHL), which rose 9.43 per cent or $1.25 to close at $14.50.

Trading activity on the First Tier Market for Q115 declined 52.76 per cent with 17,184,377 shares changing hands compared to 36,377,788 shares traded in the corresponding quarter in 2014. When compared to the previous quarter (Q414), volumes traded were also down 27.16 per cent from 23,590,706 shares traded. The value of shares traded fell 34.53 per cent from $327,889,600.28 in Q114 to $214,659,676.87 in Q115. Q115 on Q414, the value of shares traded decreased 25.58 For Q115, One Caribbean Media Limited per cent from $288,443,104.23.

(OCM) was the major decline, down 10.80 per cent or $2.70 to end at $22.30. This was For the period under review, Trinidad Cement followed by Massy Holdings Limited Limited (TCL) was the volume leader (MASSY) which slipped 7.69 per cent or

$5.25 to $63.00. SFC rounded off the bottom three, falling 6.39 per cent or $0.38 to $5.57.

First Quarter Dividend Payments

Highlights for the First Quarter of 2015 March 2015 • Republic Bank Limited announced that the Ghana Securities & Exchange Commission approved its Offer Document, which has been delivered to HFC Bank in accordance with the provisions of Ghana’s Code on Takeovers & Mergers (the Code). The Offer to all shareholders of HFC Bank is at a price of GHS1.60 (approximately USD 0.44) per share payable in cash.

The Offer is subject at all times to the provisions of the Code and the Listing Rules of the Ghana Stock Exchange, which governs the mandatory offer process. Republic Bank is committed to following the timelines of the mandatory offer process. This includes a requirement that HFC Bank circulates the Offer Document to all shareholders within 15 days of the date of receipt of the document.

Shareholders of HFC Bank will have until 7th May 2015 to accept the offer, and it is estimated that the offer process will be completed by 21st May 2015.

• Scotiabank Trinidad and Tobago Limited (SBTT) and The Bank of Nova Scotia (BNS) jointly announced that BNS will transfer all of its 50.901% shareholding (89,761,887 ordinary shares) in SBTT to Scotiabank Caribbean Holdings Ltd. (SCHL), its 100% owned regional financing and holding subsidiary in Barbados. The transfer of shares took place on the Trinidad and Tobago Stock Exchange by way of an approved “put through” of shares, all requisite local regulatory approvals have been obtained by the parties. SCHL has no intention of acquiring any additional shares in SBTT in the foreseeable future.

Contact • Vol.15 No.2 2015

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Finance & Economy

• Trinidad Cement Limited advised its Shareholders that the Rights Issue Offer was opened at 9 a.m. on Tuesday 10th March and closed at 4 p.m. on Tuesday 31st March, 2015.

• After announcing in January that GraceKennedy USA LLC expanded its own distribution in the New York, Atlanta and Florida markets, the company advised of a deal with American beverage giant AriZona Beverages USA, LLC., to distribute its Grace beverages. Under the arrangement which began this month, Arizona will distribute Grace Beverages to convenience stores, independents and on premise locations –including restaurants and bars - across New York and New Jersey, with discussions now in place for distribution to Texas and other states in short order. This agreement will expand the distribution of Grace Beverages beyond the traditional Caribbean and Hispanic trade to the urban mainstream consumer in the US North East. Grace Kennedy USA LLC will continue to distribute Grace Beverages directly to the major retail chains in the North East going forward.

February 2015 • The Trinidad and Tobago Stock Exchange Limited (TTSE) received notice that at a meeting of the Board of Directors of TCL held on Friday 06th February, 2015, the Board passed a resolution to raise capital through a Rights Issue of 124,882,568 new shares at a price of TT$2.90 per share. Subject to obtaining all necessary approvals and the removal by Shareholders of the 20% restriction on share ownership (as per Article 5, Schedule 2 of TCL’s Articles of Continuance), Shareholders will be offered the right to purchase one new share for every two shares held.

• Approval granted by the Shareholders of Massy Holdings Ltd. (“the Company”) for the voluntary delisting of the Company’s Shares (“the Shares”) from the Barbados Stock Exchange (“BSE”).

• Agostini’s Limited acquired 100% of the shareholding in Facey Trading Limited, a Barbadian fast moving consumer goods (FMCG) company, which has been in business for over 23 years. Agostini’s views this acquisition as an important strategic investment and we expect to grow this business and build a strong presence in the Barbados market in the coming years.

• On January 14, 2015, Stone Street Capital Limited (SSCL), a company registered in

Trinidad & Tobago, acquired 740,349 shares Key Rates in Flavorite Foods Limited at a price of $4.80 per share. This acquisition increased SSCL’s shareholding from 6,266,415 units to 7,006,764 units in Flavorite Foods Limited, which represents approximately 90.1% of the issued and fully paid up capital of Flavorite Foods Limited.

January 2015 * Agostini’s Limited acquired a 40% shareholding in Desinco Limited, a Guyanese fast moving consumer goods (FMCC) distribution company. Desinco, which has been in business for over 20 years, is well established in the distribution trade and is a respected member of the Guyanese business community.

Fixed Income Market Summary According to the latest Monetary Policy Announcement issued by the Central Bank of Trinidad and Tobago (CBTT), headline inflation slowed for the third consecutive month in February 2015 to approximately 6 per cent from 9 per cent in November 2014.

As stated in the report, the main contributor to the decline in headline inflation was a deceleration in food inflation arising from higher food supply and favourable weather conditions. In March 2015, the yield on the 3-month Open Market Operations (OMOs) rose to 0.39 per cent from 0.30 per cent in February 2015 and the 1-year issue rose to 1.39 per cent from 1.08 per cent. The Central Bank increased the Repo Rate, the rate at which it lends to commercial banks, for a fourth consecutive time by 25 basis points to 3.75 per cent.

Energy Prices

Global Market Indices

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Jamaica Market Summary For Q115, the major benchmark, the JSE Market Index, advanced 7,451.29 points or 9.76 per cent to end at 83,804.68. The advance to decline ratio was 23 to 9. Trading volumes in Q115 resulted in 274,377,723 shares crossing the floor of the Jamaica Stock Exchange. Q115 on Q114, market activity fell 68.31 per cent from 865,794,267 shares traded in Q114. The value of shares traded for Q115 amounted to J$3,700,195,041.16. This represented an increase of 5.75 per cent on Q114’s total of J$3,498,951,609.78. National Commercial Bank of Jamaica Limited (NCBJ) was the volume leader with 16.93 per cent of the market or 46,458,933 shares traded. The major advance for the quarter under review was Mayberry Investments Limited (MIL), up 38.16 per cent or J$0.58 to close at J$2.10. This was followed

by NCBJ which posted a gain of 35.08 per cent or J$6.49 to end Q115 at J$24.99. Next was Jamaica Stock Exchange Limited (JSE), which increased 27.39 per cent or J$0.43 to J$2.00.

In Q115, Hardware & Lumber (HL) led the declines, falling 11.21 per cent or J$0.89 to J$7.05. Jamaica Producers Group Limited (JP) was next, down 10.86 per cent or J$1.90 to J$15.60. Berger Paints (Jamaica) Limited (BRG) followed with a 6.94 per cent drop of J$0.12 to close the quarter at J$1.61.

38

Energy Update

Deep Water Discoveries the last frontier

By David Renwick, Energy Journalist HBM (Gold)

V

incent Anthony Pereira, president and country manager of BHPBilliton Petroleum Trinidad and Tobago, claims not to be having any sleepless nights. If so, it is probably his tennis-playing and gymnasium activity that makes him so tired he can't stay up, because, under normal circumstances, he should be tossing and turning in his bed in the wee hours.

Only slow, incremental increases in land production are expected in the immediate future. Off the east coast, the one prominent oil producer, Repsol, could only deliver 11,776 b/d on average in 2014, as against 11,916 b/d in 2013. BP, also on the east coast which is mainly a gas producing province these days, made a tentative step back into the crude output business in 2014, extracting around 2,000 b/d, but it has a very long way to go to achieving anything like its former glory as Why do I say that? Because Mr. Pereira is the company which originally opened-up the totally in control of exploration activity in east coast to oil production.

Trinidad and Tobago's deep water region (1,000-3,500 metres), widely regarded as the Off the north east coast, BHPBilliton last remaining area under this country's Petroleum T&T has also seen its block 2c oil jurisdiction that is capable of delivering a production slide further – from 10,206 b/d on major new hydrocarbon discovery to rival the average in 2013 to 8,352 b/d on average in land and west coast provinces. BHPBilliton 2014. No crude oil at all is yet produced off Petroleum T&T has been awarded all nine the north coast of Trinidad. Only Trinmar in deep water blocks allocated by the ministry the Gulf of Paria off the west coast, Petrotrin's of energy and energy affairs to date. It has offshore unit, is managing to hold up – 21,769 partners, it is true – BP in blocks 14 and 23a, b/d on average in 2013, edging forward to BG in blocks 3, 5, 6 and 7 and Repsol in 22,464 b/d on average in 2014. During one block 23b – but as the designated operator, it month in 2014, the State company had bears the ultimate responsibility for success squeezed 23,685 b/d out of its fields, so the – or failure. average itself illustrates the fluctuating nature of crude production.

Now why is success so important? Because Trinidad and Tobago needs a major new boost I trust the above convinces you that the country to its current hydrocarbon production, needs a new oil source that can give a boost particularly the oil part of it. The traditional to unstable production and maintain the plateau sources of crude are declining – state-owned at a much higher level.

Petrotrin, for example, on overage lifted 460 fewer b/d from its onshore acreage in 2014 So back to BHPBilliton Petroleum's efforts than it did in 2013 (12,879 b/d as against in deep water.

13,339 b/d). Only the efforts of the independents, as the lease operators (LOs), Though Mr. Pereira insists that he sleeps farm out operators (FOs) and incremental soundly, he does admit that his company is production service contractors (IPSCs) are taking “an enormous risk,” coughing-up the known, helped save the day on land (7,844 major portion of the US$1 billion exploratory b/d among them on average in 2014 compared cost, for deep water activity, which includes with 7,789 b/d on average in 2013). the largest 3D seismic ever run by an

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

international oil company (IOC) anywhere in the world and the subsequent sinking of several wells. So the deep water campaign has already delivered one world first and, who knows, there may be others to come.

Now what is the prognosis for a successful outcome?

Ministry of Energy and Energy affairs (MEEA) in-house estimates of the crude oil potential in the deep water range from a low of 3.1 billion barrels to a high of 8.2 billion barrels. It also has estimates of gas potential too – between 11.4 to 37.8 trillion cubic feet (tcf) – but everyone is focussed on crude as the desired hydrocarbon and the one that will contribute where it is most needed: gas production in Trinidad and Tobago has actually held up better over the years than crude production. Minister Kevin Christian Ramnarine struck a positive note when he addressed the 20th Caribbean Geological Conference in Port of Spain in mid-May. “The deep water has some key geological ingredients,” he pointed out. “Firstly, we have the depositional environment. Secondly, we have the source rock in the form of the Cretaceous. Thirdly, the 2D seismic that was acquired in 2002 and re-processed in 2011, shows the existence of big reservoir systems and large traps. These two features will be made much easier to understand using the recently-acquired 3D seismic, which was of high quality and has allowed for faster processing.”

All major river/delta systems in the world have led to the discovery of hydrocarbons, the Minister stressed. “Oil has been found in the deep water Gulf of Mexico, related to the depositional environment of the Mississippi river system. Oil discoveries in deep water

39

Energy Update west Africa are related to the depositional environment of the Niger river system. Oil discoveries in deep water Brazil's Santos basins is a product of the depositional environment of the Amazon river system.”

speaks to the capability of the people involved.

We have been willing to look at this in many different ways to try and see how we can parallel process things that historically run in series. We have driven productivity into this process which has given us a great outcome So why not offshore Trinidad and Tobago, which allows us to drill a well in 2016.” whose depositional environment “is a product of the Orinoco river system”? If discoveries What's more, BHPBilliton Petroleum is not are made, Minister Ramnarine suggests, fazed by the fall in the international oil price quoting from geologist Anthony (Tony) Paul between the time it initialled its PSCs and “they could be extremely large and have now. While exploration is being cut back in highly productive wells.” Precisely the other parts of the world, the same is not true characteristics needed to give the Trinidad of Trinidad and Tobago and BHPBilliton in and Tobago oil sector the kick-in-the-pants particular The BHPBilliton Petroleum Trinidad it needs. and Tobago President looks at it this way: “Our industry is a very, very long-term The Minister's cautious enthusiasm is matched business. What we do occurs over decades by that of the company responsible for the and in many time spans of governments deep water assault itself. Mr. Pereira because governments change while all of these emphasises that “we fundamentally believe investments are taking place. So we have to in the hydrocarbon system which is at work hold a long-term view while, at the same time, here.” “Trinidad and Tobago is an established ensuring that we can manage through the hydrocarbon theatre. It sits within a deltaic short-term.” framework that is one of the very significant deltaic systems in the world.”

The BHPBilliton Petroleum approach to oil price instability is “a deep focus on our BHPBilliton Petroleum executives have been operating and capital productivity so that we extolling the Trinidad and Tobago deep water can expand our margins, grow our returns, as “unique”, “very exciting” and “capable of regardless of where price goes.” Pereira becoming the petroleum division's third core concedes that “we can't control the oil price area after the US and Australia.” The company but we can control the cost of what we do and has assigned some of its most brainy people the efficiency with which we do it. Our focus to processing and interpreting the 3D seismic is not on the oil price at a particular time, and identifying the best locations in which though, of course, we have to pay attention to drill, with the first well slated for 2016. to it. Our focus is ensuring that we are continuously driving efficiency and Pereira confesses that he is “stunned” that he productivity into our systems, because we could start the first exploratory well so believe this gives us a long-term competitive quickly. “We have optimised the schedule advantage.” enormously,” he says. “Moving from the signing of the production sharing contract As far as the deep water is concerned, since (PSC) to drilling in the deep water in three production from any successful exploration years is an enormous accomplishment. “won't start until the early 2020's” it is virtually Enormous. I can't stress that enough. It just impossible to know what the oil price will be

then, which means it could well be somewhat higher than it is now. However, “based on our view of what prices will be over time, we are still hugely confident of our ability to develop the deep water, if we are successful in finding hydrocarbons.”

Other energy companies in Trinidad and Tobago seem, somewhat surprisingly, to be taking a similar view. As Minister Ramnarine has himself pointed out, there are seven drilling rigs currently active in Trinidad and Tobago waters. Total rig days amounted to 2443 in 2014 and in the first four months of 2015, had increased by 8% over the corresponding period in 2014. “Despite the drop in oil prices,” the Minister notes, “drilling activity in 2015 will be higher than in 2014. We must sustain that level of activity even in the face of depressed prices.”

Pereira has an interesting take on why energyrelated activity has not slowed down in Trinidad and Tobago as it has elsewhere – because the country is less “oily” than other producing countries and more “gassy”. “The industry here is different in that it does have a heavy gas bias and gas prices have been a bit more sticky than oil in terms of coming down. So there is a bit of a buffer there.”

Another factor would be that energy businesses in Trinidad and Tobago “have been built very efficiently. It doesn't mean to say that companies won't have to look at their cost structures but we have both been around long enough to know that commodity cycles come and go. We have seen it all before. The thing for me is that the industry has always worked through these events and come out stronger in the end.”

Let's hope that, in Trinidad and Tobago's case, that new “strength” includes successful exploration in the deep water.

Contact • Vol.15 No.2 2015

40

Energy Update

Energy Statistics In this SECOND quarter issue of CONTACT for 2015, we continue our evaluation of the current statistical data arising from Trinidad and Tobago’s prosperous energy sector. We place special emphasis on crude oil, and natural gas production under both time-series and cross-sectional circumstances.

Table E.1 – Crude Oil & Condensate Production by Companies for January to February 2014 and January to February 2015 (Barrels of oil per day) Company

January

February

January

February

January

February

2013

2013

2014

2014

2015

2015

BG REPSOL

978

952

778

795

832

961

13,295

12,519

9,582

11,111

12,632

12,540

BPTT TRINMAR

8,561

9,638

6,540

10,726

13,109

12,960

21,229

21,509

22,178

23,048

21,796

21,985

Table E.4 - Ammonia Production for January to February 2013, January to February 2014 and January to February 2015 (Tonnes) Company

January February January February January February

YARA

2013

2013

2014

2014

2015

2015

18,518

18,713

22,503

21,789

23,893

18,593

TRINGEN 1

35,546

35,418

37,811

34,099

0

0

TRINGEN 2

45,996

40,397

44,609

43,345

54,403

62,422

174,551 172,698

153,871

TEPGL

2,245

1,667

1,305

1,271

1,050

1,080

PCS NITROGEN

EOG

1,671

1,956

1,565

1,440

1,296

1,403

POINT LISAS NITROGEN

57,951

48,525

59,263

53,185

51,536

49,368

BHP

11,478

10,958

9,478

9,434

8,089

8,235

477

530

357

374

405

391

CNC

53,332

50,344

55,189

48,815

39,606

43,800

NITROGEN 2000

38,746

48,126

48,485

25,140

47,075

41,850

3,709

3,449

12,323

1,509

5,156

3,048

402,433 394,367

372,952

PRIMERA PETROTRIN

13,688

13,417

13,058

13,184

12,937

12,873

TEPL

472

543

442

556

473

456

AUM-NH3

BGCB

931

1,399

1,105

1,114

910

731

TOTAL

NHETT

87

65

83

78

76

83

NMHERL

113

126

103

133

105

118

PETROTRIN (FO)

959

962

787

788

684

759

PETROTRIN (LO)

5,800

5,804

6,208

6,171

6,413

6,445

PETROTRIN (IPSC)

492 5

09

1,129

1,157

2,800

2,742

3

6

6

8

3

5

507

290

292

295

359

329

22,552

22,817

22,836

22,920

24,333

24,146

BOLT MORA LAND SUBTOTAL MARINE SUBTOTAL

60,437

60,032

52,160

58,765

59,637

59,681

TOTAL

82,989

82,850

74,996

81,685

83,970

83,827

179,245 170,674 173,241

433,043 415,646 453,424

Source: Ministry of Energy and Energy Industries, Vol. 52 No.2 & Vol. 50 No. 2 & Vol. 50 No. 1-11

Table E.5 - Ammonia Export for September to November 2013 and September to November 2014 (Tonnes) Company

January February January February

Source: Ministry of Energy and Energy Industries, Vol. 52 No.2 & Vol. 51 No. 1-11

Table E.2 – Natural Gas Production by Company for January to February 2013, January to February 2014 and January to February 2015 (mmscf/d) Company

January

BPTT

February

January

February

2014

2014

2015

2015

YARA

24,720

24,685

24,678

0

50,102

24,707

TRINGEN 1

58,324

0

45,126

49,224

6,000

17,000

TRINGEN 2

26,986

52,429

43,216

58,092

12,750

64,579

116,588 134,210

135,343

123,997

160,124

PCS NITROGEN

181,469

POINT LISAS

2013

2013

2014

2014

2015

2015

NITROGEN

45,063

25,000

69,156

34,500

30,814

73,720

2,446

1,906

2,344

2,181

2,125

CNC

44,638

33,647

68,707

57,946

72,209

56,163

NITROGEN 2000

42,483

51,060

55,564

44,206

52,062

58,296

0

0

0

0

37,500

0

303,408 440,657

379,311

385,434

454,562

TRINMAR

EOG

20

15

13

18

14

14

5

5

4

4

3

5 552

495

504

571

566

519

1,061

1,007

1,049

1,026

975

955

433

416

426

419

379

371

BHP REPSOL TOTAL

January

2013

2,403

PETROTRIN

BG

February

January February

2013

35

35

29

26

30

30

4,453

4,429

3,998

4,403

4,101

4,052

AUM-NH3 TOTAL

423,683

Source: Ministry of Energy and Energy Industries, Vol. 52 No.2 & Vol. 50 No. 2 & Vol. 50 No. 1-11

Source: Ministry of Energy and Energy Industries, Vol. 52 No2. & Vol 50 No. 2 & Vol. 50 No. 1-11 *Figures in red are preliminary

Table E.3 – Natural Gas Utilization by Sector for January to February 2013, January to February 2014 and January to February 2015 (mmscf/d) Sector

Table E.6 - Methanol Production for September to November 2013 and September to November 2014 (Tonnes) Company

January

February

January

February

January

2013

2013

2014

2014

2015

2015

TTMC I

30,458

664

34,862

29,548

23,354

25,062

January February January February January February 2013

2013

2014

2014

2015

2015

February

Power Generation

290

297

298

306

285

291

CMC

41,758

40,502

43,315

41,329

39,433

34,233

Ammonia Manufacture

599

623

597

608

5,546

550

TTMC II

40,549

40,932

45,526

40,670

35,060

34,066

Methanol Manufacture

576

572

533

549

540

525

MIV

48,059

46,440

45,885

17,025

40,784

39,659

50

73

64

41

59

52

TITAN

69,565

63,579

41,193

38,336

62,744

53,284 114,059

Refinery

115

76

113

126

89

114

Cement Manufacture

14

15

12

10

13

13

Ammonia Derivatives

26

26

24

26

22

21

Small Consumers

12

11

11

11

27

26

Gas Processing

29

30

27

27

11

11

Liquified Natural Gas (LNG)

2,417

2,389

2,005

2,385

2,263

2,189

TOTAL

4,128

4,111

3,685

4,050

3,854

3,792

Iron & Steel Manufacture

ATLAS

129,579

138,473

125,541

130,143

128,098

M5000

161,717

130,611

119,373

144,219

149,467

111,671

TOTAL

521,685

461,201

455,696

441,270

478,940

412,034

Source: Ministry of Energy and Energy Industries, Vol. 52 No.2 Vol. 50 No.2 & Vol. 50 No. 1-11

Source: Ministry of Energy and Energy Industries, Vol. 51 No. 8 & Vol. 50 Nos 1-8 *Figures in red are preliminary

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

42

Energy Update

Energy Statistics Table E.7 - Methanol Production for September to November 2013 and September to November 2014 (Tonnes) Company TTMC I CMC

January

February

January

February

January

2013

2013

2014

2014

2015

2015

30,754

9,224

0

0

9,570

28,639

Chart E.4 Ammonia Production (Tonnes)

February

200,744

206,916

199,942

184,004

250,008

136,432

TTMC II

0

0

32,971

44,626

35,412

28,384

MIV

0

0

0

0

0

0

TITAN

62,551

35,387

67,100

31,496

48,171

35,324

ATLAS

130,596

78,863

125,711

129,713

145,376

75,029

M5000

124,981

37,027

43,415

49,582

0

61,385

TOTAL

549,626

367,416

469,138

439,422

488,537

365,193

Source: Ministry of Energy and Energy Industries, Vol. 52 No.2 & Vol. 50 No.2 & Vol. 50 No. 1-11

Chart E.1 - Crude Oil Production by Company (barrels per day)

Chart E.5 Ammonia Export (Tonnes)

Chart E.2 Natural Gas Production by Company (mmscf/d)

Chart E.6 Methanol Production (Tonnes)

Chart E.3 Natural Gas Utilisation by Sector (mmscf/d)

Chart E.7 Methanol Exports (Tonnes)

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

exporTT

44

Creating a competitive Trinidad and Tobago through exports

By Jamila Greene, Export Officer, Export Promotions Unit, exporTT Limited

C

ompetitiveness is an economic productivity born from a collective set of policies and institutions in a country that can result in development and national prosperity. The resulting productivity is measured through a comparison of what countries put out on the global market, more commonly known as exports. An export is the movement of goods, investment and skills from one country to another. Trinidad and Tobago’s thrust to become competitive is a unique story executed in tandem with changes to the national and international landscape.

The Case of Trinidad and Tobago Trinidad and Tobago demonstrates features of what economists term a dual economy – a thriving energy sector that drives the nation’s economy and non-energy sectors that contribute only marginally. On the nonenergy front, the manufacturing and agricultural sectors contributed approximately 5.6% and 0.5% to Gross Domestic Product (GDP) in 2014 respectively.

There are a number of economic indicators that can be utilized to measure a country’s competitiveness.

The Revealed Comparative Advantage (RCA) measures Trinidad and Tobago’s exports by product and industry in comparison to the world. Based on 2008-2010 data, the country’s energy products, except crude oil, had a strong to medium comparative advantage on the world market. In contrast, only a few manufacturing products demonstrated a comparative advantage.

The export of Trinidad and Tobago’s manufacturing products, with the exception of a few, have largely been limited to the Caribbean Community (CARICOM) region.

It has become such a prominent destination for a number of reasons: • Low tariff barriers to trade • Less administrative burden • Close geographic proximity • Cultural similarities (history, language, political systems etc.)

• Smaller population

any market is research. What should be considered in a research exercise?

1. The consumer – what drives them to buy?

2. The cost – cost related to market entry and penetration of a product.

3. The competition – who are your competitors and what are their prices? exporTT found that Trinidad and Tobago’s manufactured products are more price competitive in CARICOM than in Central America. There a number of reasons for this. Firstly, there are more brands of products in Central America, making the competition stiffer. Secondly, Central American countries have a plethora of Trade Agreements regionally and extraregionally that make the cost of trade cheaper.

It isn’t always necessary to compete on price, here are some other ways to export a product: 1. Bulk Sales Companies can sell the product but not the brand in large quantities.

2. Private Labeling The brand is owned and managed by a Buyer in a foreign country which allows market branding, packaging and sales to be handled by the Buyer.

3. Contract Manufacturing A local exporter contracts a manufacturing firm in a foreign country to source raw materials and manufacture their product in the market of choice.

This completely avoids the costs associated with exporting.

Innovation Trinidad and Tobago presently manufacturers a large number of traditional products that are dominated by large international brands which often-times dominate the market. While this obstacle can be overcome by choosing niche markets that are untapped by these brands, another way it to manufacture and export innovative products. Innovation is not always possible at the company start-up phase. Mature companies can also innovate their products after it has penetrated Other than the aforementioned, extra-regional exports the market to ramp-up their sales or acquire a new has been stymied by the need for greater variation in market share. Examples of product innovation can the products offered and the way they’re offered on the include: international market. This is known as product differentiation.

1. Packaging size Manufacturers can create a size of a product that is Challenges to Competitiveness – Product new or less used for the specific market to differentiate Differentiation their product. For example, in Latin America, Differences in product play an integral role in why a consumers purchase on a need-basis. It was found person buys a product. What successfully differentiates that consumers were less likely to purchase a pack a product in a market is not standard but differs by of cheese normally sold in 12 to 24 slices. Retailers consumer, culture and economy. Let’s focus on price in these markets have broken down the traditional and innovation. packages and sold cheese by the slice or smaller units (2 – 6 slices) normally presented in a plastic Price bag. This difference, presents an opportunity for a Price can play a leading factor in a consumer’s decision brand of cheese that presents a package fitting of to purchase any product in some markets, but not all the market’s preference. Opportunities are not limited markets. The first step when considering exporting to to this product.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

2. Product use While a product may be traditional, its use could be untraditional. Therefore, a company that creates haircare products may decide to create a shampoo for different hair types and age groups. The same can be done for any product.

3. Taste A product can be manufactured to suit the taste palate of a specific consumer or country. For example, Coca Cola, while it is the same soda drink, the company manufactures the product in each country to suit the taste of its consumers. Therefore a Coca Cola manufactured in Belgium, would have a slight variation in taste when compared to the same product made for Trinidad and Tobago. exporTT offers Research and Development Grants to persons who are seeking to utilize advanced technology and innovative ideas within their business. There are also other programs to consider. The Ministry of Planning and Sustainable Development has two (2) programs; Idea 2 Innovation and The Global Services Promotion Programme, which act as an incubator to bring innovative products and services to life.

Who is exporTT Limited? exporTT was created by the Government of the Trinidad and Tobago to be the driving-force for the development of an internationally competitive and vibrant export sector, contributing to the economic diversification of the country. Our services include: 1. Capacity Building 2. Training 3. Primary and Secondary Market Research 4. Matchmaking Services 5. Assistance with participation in Trade Fairs/Shows 6. Hosting of Inward and Outward Trade Missions At present the company has executed work in CARICOM and various Latin American markets. Work is expected to continue into the European Union markets. For the services industry the main sectors of focus are Energy, ICT, Construction and Professional Services. exporTT is also actively working on developing the country’s international country brand, which in itself, has value in creating a competitive Trinidad and Tobago.

The country’s thrust towards diversification can only be achieved through increased competitiveness. As we move further away from the stronghold of CARICOM, competition becomes fiercer and our companies must be ready to compete. This requires doing comprehensive research on markets inclusive of consumers and competitors to understand ways in which a product can be competitive. exporTT Limited has the confidence in our exporters’ ability to adapt, innovate and maneuver their way into new markets.

We are here to support in any way we can.

46

TDC

Trinidad and Tobago: Where the World Meets

W

hile Trinidad and Tobago’s economic base is built on the profits of the energy sector, as global tourism booms the local Meetings, Incentives, Conferences and Exhibitions (MICE) sector is set to become a strong competitor.

The development of MICE tourism in Trinidad and Tobago is in line with international trends identified by the World Travel and Tourism Council 2014 Report which showed tourism directly contributing US $3.6 trillion dollars to the global economy, outperforming sectors such as retail, financial services and manufacturing. In the local context, tourism's direct contribution in 2014 was estimated at 3.2 per cent of total GDP (US$.76 billion), which is projected to increase to 3.3 per cent by 2025i, with MICE tourism expected to play a significant role in this growth.

The local MICE sector has shown steady and sustained growth, and with the establishment of the Trinidad and Tobago Convention Bureau (TTCB) in 2009, Trinidad & Tobago is on its way to becoming the Meetings & Conferences Capital of the Southern Caribbean. A one-stop shop for international meeting planners, the TTCB provides unbiased advice, professional support and facilitation for the hosting of events in Trinidad and Tobago.

In addition to acting as a liaison between international meeting planners and local suppliers, the TTCB offers a number of complimentary services. Some of these services include site inspections, conference publicity, airport meet and greet, welcome packages for delegates, and coordination of tours. The TTCB strongly promotes Tobago as the perfect pre or post conference tour option, with its tranquil beaches and award winning eco-tourism. Tobago is also an ideal location for a meeting or corporate retreat as a number of hotels on the island have meeting facilities.

In 2015, Tobago’s stock of MICE facilities received an additional boost with the opening of the will culminate with the first ever International multifunctional Shaw Park Complex with a 5,000- Panorama on August 9, 2015. seat main hall.

In a continued drive to promote the destination, the Considered an invaluable resource by meeting TTCB successfully executed its first North American planners, the TTCB facilitated over thirty conferences Road Show in May 2015 with stops in three key in 2014, including the Caribbean Medical Providers cities: New York, Washington D.C. and Atlanta.

Practicing Abroad (CMPPA) Conference. The North America represents Trinidad & Tobago’s CMPPA group had such a positive experience in number one source market for meetings and Trinidad that they will be returning in 2015 to host conferences. In addition to one-on-one meetings, their conference in Tobago at the Magdalena Grand the TTCB conducted a destination presentation to Beach & Golf Resort. a diverse audience of meeting planners, association heads, Caribbean associations and Universities.

In 2015, the TTCB will also assist with a number of Focusing on the targets that are deemed to be the major conferences including the inaugural most lucrative for Trinidad and Tobago, the Road International Conference and Panorama (ICP) on Show educated over 200 decision makers on the August 4-9, 2015, hosted by Pan Trinbago. The ICP unique selling points of the destination. This initiative is expected to generate several leads for conferences and events and will assist in building awareness of destination Trinidad & Tobago.

With Trinidad & Tobago poised to become a major player in the international MICE market, the TTCB stands ready to welcome regional and international delegates to our shores. For more information, please contact the Trinidad & Tobago Convention Bureau at conventionbureau@tdc.co.tt or 1-868-675-7034-7 or visit our website at www.gotrinidadandtobago.com/trinidad/meetings i World Travel & Tourism Council Report 'Travel & Tourism: Economic Impact 2014, Trinidad and Tobago'

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Telecommunications Authority of Trinidad and Tobago

48

Adapting to Changing Times Then & Now within the Telecommunications and Broadcasting Sectors in T&T

“

T

ATT is proud of its role played to date in ensuring that Trinidad and Tobago has kept pace with global developments, adhering to industry standards and best practice whilst meeting the burgeoning and rapidly evolving demand from service providers and consumers”. Mr. Selby Wilson, Chairman, Board of Directors of TATT stated in TATT’s 2015 Annual Report.

Over the last decade, the telecommunications and broadcasting landscape internationally has seen progressive change. ICT development has fundamentally shifted the way in which we communicate. Modern technology and the agility of these sectors have allowed us to move away from a world where having a fixed landline was the main form of communication, to a mobile-first centric world.

Adapting to these changes, the Telecommunications Authority of Trinidad and Tobago (TATT) has steadfastly pursued legislative and strategic policy development, modernisation of sector infrastructure, service and standards improvements coupled with robust regulatory oversight to ensure significant market development in the sector whilst driving innovation and sustainability.

As a result the telecommunications and broadcasting sectors have enjoyed steady growth, moving from an estimated with US$357 million in gross revenues generated in 2004 to an estimated US$864 million in 2013.

In 2004 there were 319,000 fixed line subscriptions and no mobile phones by 2013 fixed line subscriptions had reduced to a little over 291000 subscriptions whilst there was a whopping 1.9M mobile subscriptions. Mobile Internet came on the scene in 2007 with just over 10,700 subscriptions moving speedily to 450,624 as at December 2013.

The trend continued into 2014 with preliminary data gathered for TATT’s Annual Market Report 2014: Telecommunications and Broadcasting Sectors, showing that as at December 2014, mobile Internet subscription rose to 570,000 from 450,624 as at December 2013, and mobile voice subscription increased to 1,980,000 from 1,943,873 as at December 2013. The recent World Economic Forum’s Global Information Technology Report 2015, ranked Trinidad and Tobago at number thirty one (31) out

of one hundred and forty three (143) countries for Monitoring System. The BMS is an essential tool mobile telephone subscriptions. used by the Broadcast Complaints Committee to retrieve content related to complaints made against It is anticipated that this rate of growth will continue television and radio broadcasters. over the next few years due to increased network enhancements by providers, innovative bundle TATT upgraded the BMS last year to increase the packages of data and services on offer and storage capacity to 180 days, increase television increased use of smart devices. Communication monitoring to 20 channels and provide the capability is no longer constrained by distance and time. of offline backup. The system acquired in 2009, Having affordable and easy access to Internet and had a 50 day storage capacity. mobile services has fostered the cultural shift to connected living where at a touch of a keystroke Facilitating Infrastructural Development we communicate with anyone anywhere during the As part of its mandate to encourage infrastructural conduct our daily lives. development in the local ICT sector TATT facilitated the implementation of an Internet Exchange Point Strengthening Monitoring and Regulation (IXP). The IXP provides a meeting point for all local Since TATT began operations over 10 years ago, Internet Service Providers (ISPs) to exchange this organization has striven to ensure the Internet traffic originating and terminating within telecommunications and broadcasting sectors have Trinidad and Tobago. The new local IXP brings the kept abreast with the latest technologies and following benefits to local internet users: innovations along with ensuring this organization 1. Reduced latency i.e. the Internet traffic does has the internal capacity to effectively regulate not have to go out to a foreign internet exchange these sectors. point and then be routed back to its local destination which lengthens the transaction Within its operations TATT has been focussing on time. enhancing a number of areas in relation to its 2. A convenient point for the hosting of a copy of regulatory mandate. Just recently TATT acquired major search engine(s) which will improve the a new Spectrum Monitoring System (SMS) in order response time for Internet browsing. to effectively and efficiently perform its function as 3. Security of information being sent. Once Internet the manager of this country’s spectrum resource. traffic leaves local shores, there is always an The system is comprised of two (2) mobile associated security risk. monitoring vehicles and three (3) fixed monitoring 4. Encourages the development of local hosting stations. The fixed stations at Mt. Hope Medical facilities.

Sciences Complex and Sevilla were upgraded to the new system whilst very soon the third station From March 2015, all seven ISPs operating in the will be completed in Tobago. TATT invested in the country commenced exchanging internet traffic on SMS to monitor radio frequencies, in order to the IXP. Traffic statistics can be viewed at manage spectrum use and locate unauthorised www.ix.tt/statistics/. users. The new SMS replaces the old system that Since its establishment just over ten years ago, was set up in 2007.

TATT has worked to ensure the continued rapid development of the sectors encouraging The new SMS can monitor between 20 MHz to advancements in many areas including wireless 8000 MHz spectrum ranges, whereas the old networking, high speed data services and voice system was only able to monitor up to 3000 MHz. communications over the Internet.

The new SMS also includes additional features and functionalities, such as improved capacity to Chairman Wilson continued in the 2015 Annual accurately locate transmitters.

Report “we remain committed to facilitating further growth, access and innovation in the TATT is also mandated by Section 18 (1) (m) of telecommunications and broadcasting sectors. We the Telecommunications Act to address complaints continue to forge ahead with a consumer oriented in relation to broadcasting content. In May 2009, focus and consultative approach that will be TATT commissioned its Broadcast Content beneficial to the people of Trinidad and Tobago.”

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

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IFC

Trinidad & Tobago an Emerging International Financial Centre Transforming the nation’s economy through financial sector development TRINIDAD AND TOBAGO’S ECONOMIC LANDSCAPE Trinidad and Tobago (T&T) has long been recognised as the financial hub of the Caribbean and as the leading producer of oil and gas, which accounts for approximately 40 percent of the GDP. High revenues from the petrochemical industry have provided the catalyst for major development, allowing the country to become known as the region's most industrialised nation. During the seven-year period beginning in 2000, T&T’s economy experienced higher growth than its Latin American and Caribbean neighbours. In 2009, oil prices started declining, slowing the country’s growth and contracting the economy. While oil and gas production and refining continue to thrive locally, diversification of the economy has become an important policy, vital for long-term, sustainable economic growth.

As part of this economic diversification, the Government has identified several industries that will aid in building news sectors. One of the major imperatives is further development of the financial services sector, which already contributes 15 percent to the GDP. THE ROLE OF THE TRINIDAD AND TOBAGO IFC A key step in promoting T&T’s investment opportunities was the establishment of the Trinidad and Tobago International Financial Centre (Trinidad and Tobago IFC) in 2008. Since inception, the Trinidad and Tobago IFC has contributed to diversifying the economy and creating sustainable, high-value employment. With a mandate of driving the expansion of the financial sector, the Company has implemented robust campaigns and created strategic partnerships to achieve the goals of developing the Capital Markets and establishing a Financial Institutions Support Services (FINeSS) industry. In order to entice respected international financial institutions to seriously consider Trinidad and Tobago the Trinidad and Tobago IFC has focused its efforts on enriching the following competitiveness factors, which are used to rank IFCs: • Business Environment Factors • Human Capital • Infrastructure Factors • Financial Sector Development • Reputational and General Factors Attracting International Capital Markets Investments The Trinidad and Tobago IFC has embarked on an effort to create an ecosystem that would attract toptier international players in Capital Markets to our shores. In this regard, the focus has been on the development of transformative IFC-specific legislation and building international partnerships and recognition to enable the country to achieve listing on leading IFC Indexes such as the Global Financial Centres Index (GFCI).

Creating the Legislative Environment A new suite of IFC-specific legislation will create a fully transparent, robust yet flexible and responsive framework that will serve as a platform for international banks and financial institutions wishing to do business with, and through, our IFC. This will establish a Financial Services Authority, with a court to address disputes and a business development arm. The legislation will create the ideal business environment, and in five years, as much as TT$6 billion is expected to be contributed to the country’s GDP along with an estimated 20,000 jobs.

Capital Markets International Recognition & Partnerships Another key thrust was the International Recognition Campaign, designed to position the country as an emerging global financial centre. The Company participated in round tables in New York and London hosted by industry opinion leaders including LatinFinance, The Banker Magazine and the Financial Times, to sensitise key players and position the country as a bridge to Latin American markets.

A landmark of the campaign was the Caribbean Investment & Finance Forum (CIFF), held in Port of Spain during March 2015. Co-hosted by LatinFinance and the Trinidad and Tobago IFC, the forum attracted hundreds of regional and international public and private sector leaders, the world’s leading financial institutions and global investors. During the forum, Mark Yeandle, co-creator of the GFCI and associate director of one of London’s leading think tanks, the Z/Yen Group Limited, commented positively on the sector’s development and the Trinidad and Tobago IFC’s role. Another highlight was the formalisation of an agreement between the Company and the Toronto Financial Services Authority (TFSA), aimed at fostering greater information sharing and encouraging Canadian firms to establish operations here. Already recognised as the Caribbean’s financial centre, with US$12 billion worth of debt issued over the last decade, the forum was a critical part of the Company’s strategy to introduce T&T to the world as a potential leader in global finance.

Finance Cognizant that this country’s profile as an international financial hub depends in part on training professionals, the Company has embarked on a drive to create the Trinidad and Tobago Institute of Finance, along with the University of Trinidad and Tobago (UTT).

Partnerships with recognised training institutions like The New York Institute of Finance and the Chartered Institute of Securities and Investment have also been established.

The Financial Institutions Support Services (FINeSS) Industry The FINeSS proposition is geared towards operations in Finance and Accounting (F&A) and Banking, Financial Services and Insurance (BFSI) Business Process Outsourcing, referred to as BPO. The Company developed a focused, two-phase strategy to build inward investment, targeting both financial institutions and BPO providers.

Creating the Enabling Environment In 2013, the Trinidad and Tobago IFC spearheaded amendments to the Free Zones Act, the Customs Act, the VAT Act and the Corporation Tax Act. The following year, the Company partnered with NIIT Uniqua, a leading global talent development corporation in the BPO domain, to train local finance and accounting professionals. The Company also outfitted an area that will be designated a ‘free zone’ and used as an incubation space to demonstrate the F&A BPO concept. This will facilitate in the shortterm, 80-100 high-value F&A BPO jobs, the foundation for the creation of over 500 jobs.

Capitalising on Early Successes Last year, Scotiabank launched its regional shared services centre, a “single-enterprise” free zone employing over 400 persons. This Company-enabled project was operational less than a year after RBC Royal Bank opened its back-office service centre, supporting clients in Trinidad, Suriname and the Dutch Caribbean. nternationally, the Company attended key conferences to promote T&T’s BPO value proposition. Inward missions were hosted including high-level visits from Genpact, the world’s Creating New Capital Instruments second largest BPO provider, and other leaders like The Trinidad and Tobago IFC is working with CE Payments, Hinduja Global Services, Quatrro stakeholders to examine the landscape, discover Global Services and Zensar. gaps and identify projects and products to fill those gaps. One such project is our proposed Risk Capital A CLEAR PATH TO DIVERSIFICATION Financing Model, where private sector and The roadmap is well defined for the Trinidad and Government join forces to invest in expansion-ready Tobago IFC as are the potential benefits to the county SMEs, critical for economic growth and diversification. should our mandate be achieved. There are many more milestones to be marked, however, the goal Establishing a Trinidad and Tobago Institute of of economic transformation and T&T emerging as an International Financial Centre is that much closer.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

EMA

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Environmental Philanthropy A Competitive Advantage

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hilanthropy can often be the most costeffective way for a company to improve its competitive context, enabling companies to leverage the efforts and infrastructure of nonprofits and other institutions. The more closely a company’s philanthropy is linked to its competitive context, the greater the company’s contribution to society will be.

However, within the context of environmental philanthropy, many companies increasingly desire to simply appear “green.”Companies as diverse as Bank of America, Genzyme, IBM, and Toyota are constructing or have already moved into green buildings that are certified by the US Green Building Council. The Agricultural Development Bank (ADB) recently launched its online banking and SMS texting services to reduce operational costs, increase productivity, efficiency and enhanced levels of service.

This technological move has also added to ADB’s Corporate Social Responsibility (CSR) initiatives with regards to its reduction in the use of paper towards conserving our environment.

Some of these actions by the corporate and business sector may seem to be insignificant, but for others the organisations are giving back to their communities and regions, and for the most part their efforts are welcomed by employees, consumers, investors, regulators, and the public. Companies have a lot of power in the community and in the national economy.

They control a number of assets, and may have thousands, even millions in cash at their disposal for socially conscious investments and programs. Some companies may engage in "greenwashing", or feigning interest in corporate responsibility, but many large corporations are devoting real time and money to environmental sustainability programs, alternative energy/clean technology, and various social welfare initiatives to benefit employees, customers, and the community at large.

According to the United Nations Industrial Development Organisation (UNIDO) ‘Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders’. CSR is generally understood

as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-LineApproach”), while at the same time addressing the expectations of shareholders and stakeholders.

A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes.

In the case of Cisco, its CSR vision is to build environmental sustainability into each business function and process. Cisco’s efforts include aggressive targets to reduce greenhouse gas (GHG) emissions from their operations and suppliers worldwide. In 2012, Cisco completed two 5-year GHG emission reduction goals and announced 5 more targets in 2013. According to Cisco’s 2014 CSR report, Cisco:

Partnering with non-governmental organisations and community-based organisations involved in the environment are also valued mechanisms whereby businesses and corporate entities could get involved in CSR initiatives and build their public portfolio.

Corporate entity, Atlantic has been successful in this joint-conservation initiative through its partnership with Turtle Village Trust. Their efforts focus on protecting and conserving the sea turtle population while building awareness of the need to save our five species of sea turtles (Loggerhead, Green, Leatherback, Hawksbill and Olive Ridley), which were also designated as Environmentally Sensitive Species in 2014.

Corporations that can demonstrate a significant impact on a social problem will gain more credibility than those that are merely big givers. The acid test of good corporate philanthropy is whether the desired social change is so beneficial to the company that the organization would pursue the change even if no one ever knew about it. The Environmental Management Authority (EMA) also encourages individuals, businesses and corporate entities to get involved with environmental projects through its Biennial Green Leaf Awards project which recognises various entities for their sustainable contribution towards our environment. More recently the EMA launched a recycling project wherein it is seeking capable individuals, firms, NGO’s and CBO’s for proposed business opportunities in the field of recycling.

• Installed 3 solar photovoltaic (PV) systems at facilities in Texas and Bangalore, India, that will produce 2 million kilowatt hours of electricity annually, saving over $380,000 and preventing more than 1150 metric tonne of carbon emissions each year • Achieved a 30% absolute reduction in Scope 1 and 2 GHG emissions worldwide, from a FY07 baseline.

• Reported that 100% of our key manufacturing and logistics suppliers reported their GHG Simply obtaining the required approvals and emissions to a Carbon Disclosure Project (CDP). certificates from the EMA will position your organisation one step closer towards adhering to In Trinidad and Tobago (T&T) significant and varied environmentally sound practices. However CSR opportunities exist for businesses to get involved goes beyond what is prescribed in law. It relates to in the environment. The T&T Chamber of Industry the act of giving back to society, contributing to its and Commerce made this more a reality for people, the community and the environment and businesses through the establishment of a CSR building goodwill among the citizenry. Environmental committee in 2007 to provide support and CSR no longer is a one off activity such as a random assistance in areas relevant to its members. The tree planting exercise or beach clean-up activity, Committee’s mission is to build a platform for but is a sustained commitment to our environment learning, advocacy and technical assistance that investing in the merits of such activities and nurturing enables every business to be an active partner in the project into one that is sustainably beneficial for creating a socially and environmentally sustainable all – people centred, environment oriented and profit Trinidad and Tobago (www.chamber.org.tt). driven.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Columbus Communications

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Advanced Video Service for Flow Customers Flow prioritizes access to quality content; seeks to make high definition television the new standard

F

low launched its Advanced Video Service (AVS) in Trinidad in February 2015 giving customers access to an exciting new platform for television. Considered to be the future of cable television, AVS builds on the features that Flow cable customers are accustomed to; full suite of digital, High Definition (HD) viewing choices and built-in cloud storage to now include, even more viewing features and options.

Simply put, AVS is ‘television over the Internet’.

Through this platform, customers’ TVs are connected to the web via a dedicated broadband device giving them access to thousands of hours of programming from which to choose. In addition, with customizable features like parental controls, menu options, and more, AVS can be modified to fit any customer’s specific taste or needs.

Perhaps one of its biggest advantages over traditional TV is that High Definition (HD) programming is a standard feature of AVS. Now, customers are no longer required to pay additional fees to access HD channels. Instead, an array of HD channels are now included in Flow’s base packages so that customers

can finally get the most out of their HD televisions.

Customers have access to 12 HD channels with the Starter package; 34 with Basic; 41 with Extended Basic; and 47 with Premium. So, regardless of subscription choice, with AVS everyone will enjoy high-quality content.

Other unique features of AVS include: Play from Beginning (a cool feature that allows the viewer to restart any show currently in progress and enjoy it as if it had just begun); Pause or Rewind Live TV (allows the viewer the ability to watch a show on their terms and not miss a minute of action); Improved On-Screen Navigation (more colorful icons and text that is easier to understand); Revamped Menu (translucent to allow the viewer to see and hear content whilst navigating and generally easier to search for content).

Another advantage of the Flow AVS platform is the cloud storage capabilities, which allows customers

to record their favorite shows and movies in the cloud.

Cloud Storage is an advance form of data storage where your content is stored in an external server or site ensuring safety, availability and accessibility in the event of equipment failure, so that the viewer can watch whenever it is convenient. Particularly, customers can record one or multiple shows in advance, control the storage of past recordings, playback saved content at their leisure, all the while knowing their recordings are backed up and safe in the cloud – regardless of a potential hardware failure.

And, if the built-in storage is not enough, there are alternative cloud package options that offer up to 100 hours of additional storage. For the majority of Trinidadians, AVS is an exciting and new television viewing experience that gives them control over what they watch and how they watch it. While many are still without this kind of on-demand access to HD content, all of that is about to change as Flow begins making AVS – the global standard for Pay TV platforms – a Caribbean standard.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

Are you looking for an ideal location to host your Private Meetings, Training Sessions, Product or Media Launches, Christmas Cocktails or even your Wedding Receptions?

Then your Chamber is here to meet your needs!

Duncan Campbell Meeting Room

WM Gordon Gordon Board Room

Leon Agostini Conference Hall

Events have become the hallmark for many Corporate Communications and Marketing Divisions and finding that ideal venue is perhaps one of the most important aspects to the success of all activities. At the Trinidad and Tobago Chamber of Industry and Commerce we pride ourselves in providing rooms for small and medium sized functions. Our venue, at Columbus Circle, Westmoorings, has been rented by many members and non-members.

Named after the Chamber’s first President, our Leon Agostini Conference Hall, accommodates Theatre seating up to 200 persons and Banquet seating of 180 (rectangular tables) or 120 (round tables). Our Duncan Campbell Meeting Room can accommodate Theatre seating up to 40 persons and Round table seating up to a maximum of 16 persons. Our special offer to weekend clients is the WM Gordon Gordon Board Room which accommodates up to 14 persons in comfortable executive style.

As a “One Stop Shop” we provide complete services - Wheel-chair access, Parking, High Speed Internet access, Catering, Audio and Video, all in our air- The Chamber’s staff stands ready to assist and will work with you in ensuring the conditioned facility. Our rates are among the lowest, given our secure and scenic success of your event. Upon request we will assist with the coordination at a location. As a member of the Chamber your rental fee is discounted by 10%. reasonable fee.

We invite you to contact Eustace Pierre at 637-6966 ext. 286 or epierre@chamber.org.tt so that a tour of our facilities can be arranged.

Thank you for your continued support and we look forward to welcoming you.

PwC

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Cyber risk is more than an IT issue, its a business issue A PwC perspective

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ore than 9,700 security, IT and business executives found that the total number of security incidents detected climbed to 42.8 million this year, a 48% increase over the last two years.

Verizon’s 2015 2014 Data Breach Investigations Report estimates that 700 million breaches cost organizations approximately $400 million. A cybercrime report by security firm Symentec reports that 431 million adults, more than a million a day fall victim to some form of cybercrime each year. Not surprisingly, PwC ‘s Global Economic Crime Survey ranks cybercrime as the fourth most reported type of crime with 75% of respondents reporting increases in cyber-attacks over previous years. PwC’s 18th Annual global survey cybersecurity ranks cyber security as the number one concern among CEOs. While information security risks have dramatically evolved over the past few decades, the approach that institutions use to manage them has not kept pace. The traditional information security model — one that is controls and compliance based, perimeteroriented, and aimed at securing data and the back office — does not address the realities of today.

Cyber risk management is a complex problem, requiring executive management engagement, ongoing governance, risk management techniques, threat correlation, collaboration throughout the organization, and adoption of a new business operating model. The ultimate objective of cyber risk management is to build cyber resiliency, where an organization’s systems and operations are designed to detect cyber threats and respond to cyber events to minimize business disruption and financial losses.

Top-down commitment and un-wavering support is essential to improving your defense position Building a robust cyber risk management program is a complex but worthwhile endeavor. A cyber risk

management program should be one of many components of your overall business risk environment that feeds into the enterprise risk management framework. While this doesn’t eliminate cyber risks, it allows you to manage those risks through an informed decision-making process.

The executive management team should recognize its leadership role in setting the proper tone and structure for enabling cyber resiliency throughout the organization. They should also recognize the importance of mitigating cyber risks as an essential task in maintaining the on-going success of their institution.

4. Identify cyber threats - Effective cyber risk monitoring focuses on building a sustainable and resilient approach to putting intelligence inputs from various teams under a common lens to quickly correlate threats in real time. Organisations should establish a robust threat-analysis capability built on shared intelligence, data, and research from internal and external sources.

5. Improve your collection, analysis, and reporting of information - Organizations should ensure their cyber risk operations team supports three primary functions to build robust cyber and technical threat intelligence capabilities. These are: We recommend executive management take the collection and management, processing and following steps: analyzing, and reporting and action.

1. Establish cyber risk governance - The foundation of a strong cyber resilient organization is a governance framework for managing cyber risks. This is established by deciding who will be on each of the teams, and setting up operating processes and a reporting structure. Connections should also be made to other risk programs such as disaster recovery, business continuity, and crisis management.

6. Plan and respond - The development of prepared responses — playbooks — is a necessary step in adequately planning and preparing responses to cyber events. Using the intelligence gathered throughout the playbook development process, each playbook says who should take action, what their responsibilities are, and exactly what they should do. Executive management should also frequently revisit cyber intelligence gathering techniques, leverage and update cyber insurance options, and 2. Understand your cyber organizational upgrade cyber security technologies. boundary - An organization’s cyber vulnerabilities extend to all locations where its data is stored, The benefits of becoming cyber resilient cannot be transmitted, and accessed — by employees emphasized enough. Cyber resilient organizations themselves, its trusted partners, and its customers. are better positioned to keep pace with evolving Organizations should also consider new areas such threats, thereby helping them to avoid financial as big data, analytics, and social media. damage, negative publicity, and loss of customers’ trust.

3. Identify your critical business processes and assets - Organizations should determine what PwC helps organisations and individuals create the comprises their most valuable revenue streams, value they’re looking for. We’re a network of firms business processes, assets, and facilities. We refer in 158 countries with more than 195,000 people to these collectively as “crown jewels.” After these who are committed to delivering quality in assurance, are identified, understand where they are located tax and advisory services. and who has access to them.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

ACCA

58

Talent management and SMEs

By Brenda Lee Tang, FCCA Head of ACCA Caribbean

S

mall and medium sized enterprises - or SMEs as they are more commonly known - make a considerable and significant contribution to both the global and national economy.

ACCA estimates that they account for two thirds of employment (67 percent) and more than half of all output in the private sector globally. Among the OECD countries, they are believed to account for 30 percent of exports and 10 percent of foreign direct investment and they are seen as the main source of new job creation.

SMEs can make a positive contribution to economic development as drivers of growth and ‘civil society builders’. The SME sector’s ability to adapt to rapid changes in the business environment, such as the increasing momentum of globalisation, its resilience and flexibility, and its potential for innovation make the sector a reliable source of new jobs - even though individual businesses may not be. These characteristics need to be fostered for the benefit of economic development across the world.

But what about SME owner-managers fostering themselves and their employees? Talent management – the fostering of staff and employees – is an often overlooked aspect of a SME’s own development.

Talent management is often thought of as something only big business does, that it is for corporate organisations with large human resources

departments who have the money, time and other resources to recruit, develop and retain their talented employees in a way that small business would not be able to do.

It is for this reason that owner managers need to constantly improve how they recruit, retain and train their employees, no matter how small or large their business is. Investing in their people is key to success, even if a SME is a micro business with Research from ACCA showed that talent one or two employees. development programmes in large firms were hit in the global downturn, with recruitment put on hold Nurturing and fostering talent does not have to be and investment in training reduced. What was also expensive, and it can pay dividends in terms of surprising was that talent management in large motivation of staff and their commitment to the small companies was much more informal, because business; training might be in customer service, in spending had to be reined in. pitching for new business, in business planning or in dealing with new technologies or in how to access But the reality for the SME sector is that they often finance. “do” talent management without the formal processes, systems and budgets that are so often used by their Most of this development could happen organically larger counterparts, who can rely on human resources and innovatively as the SME sector is already known departments to source and running training and for being innovative in their approach – not only development events. innovative in their business offering, but also innovative in their approaches to doing business.

But since both staff and management in SMEs are time-poor, their ability to access formal training SMEs can be an excellent breeding ground for depends very much on the manner in which this is developing new talent, but the challenge for the delivered.

SME owner once they have developed their talent is to know what to do when their talent flies the nest.

However, talent management isn't just about ensuring the business has access to the right skills in the The owner-manager might find seeing their expertly short term. A growing issue for SME owner-managers trained employee move on, perhaps to start up their is business succession. Many SME owners do not own SME; but they should rest assured their support consider what will happen when their organisation and their development has in some way helped to grows, and also when the time comes for them to develop an individual and by knock-on effect the step down or sell their business. And preparing a economy too. Talent management can be both a successor or mentoring promising staff doesn't always strategic and an altruistic act. come naturally to entrepreneurs.

Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt

SERVING THE CARIBBEAN

An Approved Mediation Agency registered with the Mediation Board of Trinidad & Tobago The Centre’s Mediation Programme is Accredited by the Mediation Board of Trinidad and Tobago

The Centre provides public and customized in-house training in ADR & related fields, such as Mediation, Negotiation, Arbitration, Conflict Resolution, Stress & Anger Management, Self Management for the Busy Executive, Dealing with Difficult People, Critical Thinking For more information contact: THE DISPUTE RESOLUTION CENTRE, Ground Floor, Trinidad and Tobago Chamber of Industry and Commerce Building, Columbus Circle, Westmoorings.

Tel: (868) 632 4051 or 637 6966 Fax: (868) 632 4046 or 637 7425 E-mail: drc@chamber.org.tt

59

Welcome to New Members BRONZE John Chapman Address: 6 Tank Rd Off Picadilly, Rd #2 Signal Hill Tel: 620-3900 Email: jnchapman@gmail.com BRONZE General Safety Networking Limited Address: Lot #430 Phase 4 2 Harold Joseph Place, Malabar, Arima Tel: 482-7283 Fax: 739-1422 Bronze Tobago Agro Processors Association

Address: #36 Rockley Vale, Scarborough, Tobago Tel: 310 0612 Website: www.facebook.com/tapa

Diamond S.C.G.(Caribbean) Group Ltd. Address: #5 Keate Street, Port of Spain Tel: 625-3788 Fax: 623-4056 Email: marketing@scgcaribbean.com

Gold Kapok Hotel & Restaurant Co. Ltd. Address:16-18 Cotton Hill, St Clair, Port of Spain, Bronze Tel: 622-5765 Kronus Geological Services Ltd. Fax: 622-9677 Address: 15 East Hill, Unit 2, Cascade, Tel: 221-2119 Bronze Fax: 221-2119 Dominic Wilkes t/a Mobile Rehab Email: vkj@kronusgsl.com Address: 63 Jasper Avenue, Port of Spain Tel: 637-9257 Email: wilkes565@gmail.com Contact • Vol.15 No.2 2015

SERVING THE CARIBBEAN

An Approved Mediation Agency registered with the Mediation Board of Trinidad & Tobago

The Provider of Choice for Professional Mediation & Arbitration Services: Corporate, Commercial, Construction, Engineering, Medical Negligence, Personal Injury, Intellectual Property, Human& Industrial Relations, Insurance, Debt Recovery, Sport, Land, Estate & Family Business Disputes

For more information contact: THE DISPUTE RESOLUTION CENTRE, Ground Floor, Trinidad and Tobago Chamber of Industry and Commerce Building, Columbus Circle, Westmoorings.

Tel: (868) 632 4051 or 637 6966 Fax: (868) 632 4046 or 637 7425 E-mail: drc@chamber.org.tt

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Trinidad and Tobago Chamber of Industry and Commerce • www.chamber.org.tt