Trinidad & Tobago’s Ambassador to the US, Dr. Neil Parsan in Tampa to discuss business opportunities with the Island
TAMPA – Remarks by His Excellency Dr. Neil Parsan Ambassador of the Republic of Trinidad and Tobago to the United States of America at the 7th Annual International Business Summit hosted by the Tampa Bay International Business Council on March 28:
I am delighted to join you at the 7th Annual International Business Summit this afternoon. I must begin by recognizing the Tampa Bay International Business Council for its kind invitation to participate in this Summit and for the organization’s commitment to promoting trade between businesses in Tampa and the world, the region and Trinidad and Tobago.
I also wish to congratulate the Council and the various organizers and sponsors for convening such an informed and distinguished group for discussions on entrepreneurship, innovation and international trade.
Of interest, the International Monetary Fund, in its January 2013 update of the World Economic Outlook, reported that global growth is expected to be no more than 3.5% this year, not much higher than last year. Weaknesses in the major developed economies are at the root of the global economic slowdown.
This is so particularly in Europe, who is trapped in a vicious cycle of high unemployment, financial sector fragility, heightened sovereign risks, fiscal austerity and low growth. Several European economies and the euro zone as a whole are already in recession, and euro zone unemployment increased further to a record high of almost 12 % this year. Deflationary conditions continue to prevail in Japan.
Also, the US economy slowed significantly during 2012 and growth is expected to remain at 1.7 %, in 2013.
According to the IMF, this pace of growth will be far from sufficient to overcome the continued jobs crisis that many countries are still facing. With existing policies and growth trends, it may take at least another five years for Europe and the United States to make up for the job losses caused by the Great Recession of 2008-2009.
The economic woes in Europe, Japan and the United States are spilling over to developing countries through weaker demand for their exports and heightened volatility in capital flows and commodity prices. The larger developing economies also face home-grown problems, however, with some (including China) facing much weakened investment demand because of financing constraints in some sectors of the economy and excess production capacity elsewhere.
Large emerging markets such as Indonesia, Turkey, Brazil and India are expected to grow, but will not rebound to the high rates achieved in 2010-2011. In August of 2011, economists from Citibank projected average GDP growth of 6% for 2012 in the emerging markets, however by year’s end the actual outturn was only around 4.5%. Low growth in these emerging markets is due, in large part, to fear and uncertainty. Fears persist that further contraction in the markets of the highly advanced economies, will place a further constraint on these highly externalized emerging nations.
Interestingly, while the global economy is set to grow by a sluggish 3.5% in 2013, Africa is projected to grow at rates higher than the global average. The Democratic Republic of the Congo is postured to become one of the world’s fastest-growing countries with the IMF predicted GDP growth of 8.2% in 2013. Representing 40% of the world’s population, 26% of the world’s territory and 15% of GDP the BRIC’ s burgeoning appetite have led them to seek partners across the African continent.
Several factors are behind Africa’s growth including better economic management by African governments, substantial debt relief, increased private capital flows and sustained commodity prices. Let us also not forget that Africa is home to 30% of the world minerals, 42% of the world bauxite, 38% of its uranium, 42% of its gold, 73% of its platinum, 88% of its diamonds and 10% of its oil. Indeed, the investment landscape is changing.
The outlook for the countries in Latin America and the Caribbean is varied. ECLAC – the Economic Commission for Latin America and the Caribbean – estimates that the economies of the region will grow by 3.8% in 2013.
This is mainly due to rising commodity prices and the recovery of the resource rich economies in the region, such as Guyana and Suriname.
The countries without access to a rich pool of resources have not fared as well. Jamaica returned to the International Monetary Fund in February of this year for a loan in the amount of USD$750million, Grenada is set to default on its U.S. and E.C. (Eastern Caribbean) dollar bonds, whilst Belize is currently facing a debt-to-GDP ratio of 92%.
As disincentivising as the aforementioned may seem, there is always hope. We are a resilient species. We are Darwinian by design. We have survived, we are surviving and we will always survive. And we can continue to thrive.
Ladies and Gentlemen, as they say, “if opportunity doesn’t knock, build a door.” This is why I think so many of us have gathered in Tampa today. The time has come to seek out new opportunities, find new partnerships and in so doing, strengthen our resolve to work harder to improve the quality of life for our people and our future generations.
Although the global economy seems to have stabilized, recovery remains weak and uncertainty is still high. Our world is more interdependent than ever. Borders have become more like fishing nets than impenetrable walls, and while this means that wealth, ideas, information and talent can move freely around the globe, so can the negative forces shaping our shared fates. The financial crisis that started in the U.S. and swept the globe was further proof that we can’t escape one another.
This sense of global interdependence has courted us into a global marriage. The thinking has to be that we are in this together – for rich or for poor, for better or for worse. It is essential to we change course in fiscal policy and shift the focus from short-term consolidation to robust economic growth with medium to long-term fiscal sustainability.
Fiscal policies should be internationally coordinated and aligned with structural policies that support direct job creation and green growth. Further monetary policies be better coordinated internationally and regulatory reforms of financial sectors be accelerated in order to stem exchange rate and capital flow volatility, which pose risks to the economic prospects of developing countries. There is also a need to secure sufficient development assistance to help the poorest nations accelerate progress towards poverty reduction goals and invest in sustainable development.
In the US, the priority is to avoid excessive fiscal consolidation in the short term, promptly raise the debt ceiling, and agree on a credible medium-term fiscal consolidation plan, focused on entitlement and tax reform.
The way forward has to be one of Commitment, Cooperation and Communication. These three (3) C’s must be the platform for the three (3) P’s – Public-Private-Partnerships.
This philosophy is already successfully in action. For example, the troika of government, the private sector and foundations is seeking to improve health care for the long term in Rwanda where the launch of that country’s Human Resources for Health program, which addresses a critical shortage of health workers by working with schools in the US. In Haiti, one of the poorest places on the planet, phones have revolutionized the average person’s access to financial opportunity. Until very recently, banks in Haiti didn’t provide loans with only about 10% of Haitians having a bank account. But around 80% of Haitian households have access to a cell phone. So the chairman of Digicel, Irish businessman Denis O’Brien, worked with a Canadian bank, Scotiabank, to provide a service that lets Haitians withdraw cash and make deposits and person-to-person transfers using their mobile phones without a bank account. By the end of 2011, this service had processed over 6 million transactions. All around the world, in poor countries and rich ones, the private sector, governments and nonprofits are combining their skills and resources to form networks of creative cooperation to boost local economies while addressing problems like climate change and poverty. Smallholder farmers in Africa are planting trees so they can not only harvest timber or fruit but also profit by selling carbon credits on the world market.
Ladies and Gentlemen, I stand here opining and quoting international reports. To predict the future is as reliable as our ability to project. Projections are plat formed on the robustness of one’s assumptions. Perhaps you’re familiar with Philip Tetlock’s landmark 2005 UC Berkeley study that looked at 82,000 predictions over 25 years by 300 leading economists. It turned out that expert views were no better than random guesses, and worse, the more famous or eminent, the less accurate the prediction. Pragmatically speaking, a few easy tell-signs are cleverly camouflaged.
Nothing speaks recovery more strongly than the return of the upscale nightlife on a broad scale. If you can’t get a reservation at the latest A-list place in your city consider that a good sign. In a similar vein, rising occupancy rates at the likes of Westin, Sheraton, and Grand Hyatt would represent a very good sign that corporate travelers including meetings and conferences are back in a significant way. The economic disruption has battered traditional second-home markets, from Phoenix to Tampa to the Costa del Sol in Spain, and the demand for such things as boats and recreational vehicles is, of course, way down from its peak during the boom years. In my country when you observe boats and sea-crafts for sale, start worrying.
Fortunately, Trinidad and Tobago’s economy has however, succeeded in weathering the storm and has shown significant resilience during the financial crisis and the subsequent fragile global economic recovery that we are now experiencing. Our low debt-to-GDP levels, strong foreign reserves position and well-capitalized banking system, provided the government with some fiscal space within which to operate.
Additionally, although there was some decline in the energy sector (contributing more than 40% of GDP and approximately 70% of total foreign exchange earnings) the economy was still able to grow by just over 1% in 2012 as a result of improved performance in the non-energy sector.
Growth was reflected in the Services sector, mainly in Finance, Insurance and Real Estate Services, Electricity and Water as well as Personal Services.
We are open for business. We are commitment to reducing the impediments to doing business in my country. In fact you can now register a business within 24-48 hours and we are working to significantly reduce the number of days that it takes to clear a shipment on the port.
The energy sector has undoubtedly driven modernization and has underpinned our nation’s prosperity and standard of living and it will continue to do so for the forseeable future. Our Ministry of Energy has been aggressively promoting our energy sector internationally, targeting investors in the U.S., Canada and the United Kingdom. BP alone expects to invest US$6 billion in our upstream in the next five years.
Our success in the energy sector is undoubtedly powering our growth in other sectors particularly in the maritime sector, ICT sector, creative industry and the light manufacturing sectors.
SPEAK OF CARNIVAL, STEELPAN AND TOURISM
Trinidad and Tobago’s strategic location southern most of the chain of Caribbean islands, below the hurricane belt and its proximity to Brazil and the Amazon River were just some of the reasons why companies chose to establish operations in our twin island republic. There are already close to 350 companies and over 46 shipping lines that are involved directly or indirectly in the maritime sector in Trinidad and Tobago.
ICT contributes an estimated 3.5% to our economy in the areas of telecommunications, and professional services. Trinidad and Tobago with our highly educated work force is an optimal location as access is gained to the Spanish and English speaking countries in Latin America and the Caribbean. The Caribbean offers a large pool of English-speaking talent and is quickly emerging as a credible near shore location for BPO and currently many investment opportunities exist. This includes opportunities in the financial sector, capital markets development, urbanization and infrastructural development projects.
Ladies and gentlemen the manufacturing sector also continues to play a significant role in Trinidad and Tobago’s economy. The largest manufacturing sub-sector, food, beverages and tobacco, recorded 2% growth in 2012 and continued expansion of this sub-sector is projected. We are looking for FDI opportunity in this sector. Opportunities exist for the production of industrial gases and paints, concrete products, steel products and plastics, amongst others.
SPEAK OF AMMONIA, UREA, METHANOL AND THE FERTILIZER INDUSTRY
Trinidad and Tobago ranked favorably in the 2012 Global Competitiveness Report. The Report highlighted many areas in which Trinidad and Tobago has a “notable comparative advantage” – strength of investor protection, judicial independence, mobile telephony, macroeconomic stability and the high quality of our education system. Investor confidence is high. Recently the Hon. Prime Minister of Trinidad and Tobago, the Hon. Kamla Persad-Bissessar announced a new $5.4 billion methanol to DME plant will soon be built. The Project Development Agreement for the new petrochemical plant, which involves the Mitsubishi Corporation, Mitsubishi Gas Chemicals and local partner Neal and Massy Limited, was approved.
This is but one example of my country’s commitment to entrepreneurship, partnership and innovation. Over the next couple of years we will continue on our drive to stimulate economic growth, facilitate diversification and lay the foundation for local economic transformation. I encourage you to join us as we continue to create a more competitive and enabling marketplace for those doing business in Trinidad and Tobago. Our commitment to partnership is reflected in the recently established Global Gas Council (GGC) and the upcoming Africa Americas Business Forum (AABF) in Washington DC.
In concluding, let me say “what we do in life echoes in eternity” – significant events have taken place over the past decade that has re-scripted our planet’s eternity. Undeniably significant stories of major global changes — from climate change to regime change, from the financial crisis to crisis in the Middle East, from peace securitization to poverty eradication, from women’s empowerment to nuclear disarmament.
Amid a global climate marked by worrying economic uncertainty, widening social and gender inequality and growing cries for self-determination we are called upon to act to secure our eternity. Things are not what they used to be. Yesterday was guaranteed. Today is in progress. Tomorrow is uncertain. We live in an imperfect world often seeking perfect solutions. Perfect solutions may never come and while we debate and while we refine resolutions, more and more people are starving, social inequality gaps are widening, our climate is deteriorating and tomorrow is becoming ever more uncertain.
As leaders all, our contribution to mitigating some of these global challenges continues to be molding a society in which we understand that it is important to grow so as to make equal, it is important to make equal so as to grow. Meetings like this one are essential if we are to provide a platform to strengthen the partnerships between our counties, our countries, our continents, our world; partnerships which must be strengthened if we mean business about providing new possibilities for our people.
