T&T diversifies economy further

PORT OF SPAIN, Trinidad – On Thursday June 12 at the Hyatt Regency Hotel, Port of Spain, in Trinidad the Honourable Patrick Manning, Prime Minister Of The Republic Of Trinidad And Tobago gave an address to the attendees at the Caribbean Investment Forum 2008.

I welcome this opportunity to address you at the end of your two very intense days of discussion, during which you covered so many important and pertinent issues relating to the purpose of this year’s Caribbean Investment Forum organized by Euromoney Conferences. Trinidad and Tobago has been very pleased to host this meeting and I thank and congratulate the organizers for producing this event. I feel assured that all visiting participants have already had a most enjoyable stay in our country.

Global problems

Ladies and Gentlemen, the main purpose of government is the welfare of the people. All economic and social programs must redound to their individual and collective development. It seems therefore that something is going very wrong in our increasingly interconnected world when people all over are being challenged in very fundamental ways.

This stems from four major problems facing the global community. These are high energy costs producing almost universal inflation as well the threat of a global economic slowdown; food prices trending alarmingly upwards; climate change already producing environmental catastrophes; and potential weaknesses in the global financial system emanating in part from the sub prime mortgage crisis in the United States of America. This situation is producing growing feelings of insecurity among entire populations and threatening the stability of society in many countries of the world.

The situation is clearly not a passing phenomenon. Indeed it is now commonly accepted that the days of cheap food and oil are over and that with increasing demand and decreasing supply, we are heading for global crises in both these areas. The signs are there. Food riots as well as protests over the high cost of fuel are already taking place in several parts of the globe. People feel threatened in very fundamental ways.

No country or region can escape the threatening effects of these major problems. We in the Caribbean already know it first hand from the rising prices of food and almost everything else; as well changes in the pattern of rainfall, coastal erosion and increasing severity of hurricanes roaring across the Atlantic.

Caribbean imperatives

We cannot wait for others to lead the way. Whilst, for example, we add our voice calling for a global reduction of green house gas emissions, we must ourselves embark on greater fuel efficiency as well as the pursuit of alternative sources of energy; we must ourselves produce more and consume less; and above all else we must move towards the highest possible level of food production and the stimulation of the agro-industry in the region.

People, the greatest resource

And we must develop the people. The human resource is always the key. Since time immemorial the human race has survived and triumphed by its ingenuity; and it has been proven again and again, throughout the course of human history that, no matter what the situation, where there are people, there is possibility.

Like all progressive governments, now more than ever, we in the Caribbean must focus on the development of our people. We must emphasize education and training, housing, health and individual security. Our education systems must equip our youth for the modern world; we must provide technical and vocational training for those so inclined; housing must be made affordable for improved family and community life; the best possible health care must be accessible for the people; and justice and the rule of law must always prevail for the security of the population who need the environment for the pursuit of individual fulfillment.

Human Development in Trinidad and Tobago.
Let me assure you that this is the process now underway in Trinidad and Tobago. All economic policies and programmes are rooted in the core principle of benefit for the people.

1.Education and Training

We have engineered vast improvements in education and training with focus on quality from Nursery to Tertiary. We are now implementing our policy of seamlessness, facilitating greater progress from one level to the next. We are already moving to be among the few countries in the world to achieve universal Early Childhood Care and Education; improvement of primary education is underway through new schools, technology and planned curriculum reform; and the secondary sector has been modernized with a reformed curriculum, school based management, mandatory teacher professionalisation, new or upgraded schools, and deployment of information technology for improved teaching and learning. As at other levels, tertiary education is now free to all nationals attending accredited institutions in our country.

We have built the new University of Trinidad and Tobago and have increased enrollment at tertiary institutions from approximately nine thousand in 2001 to over forty five thousand at the end of last year, an increase of three hundred percent. Indeed by 2015, we intend to increase to sixty percent the number of secondary graduates attending university and towards this end we have already increased the number of A level places as we move towards our goal of twenty five thousand additional places by that time.

In the area of training we have had a seventy percent increase over the last six years through which close to one hundred thousand young persons have acquired skills for the modern workplace. We have also already incorporated into our tertiary system, our leading technical and vocational education institutions.

2.Housing

Through our very effective housing policy, we have already built over twenty-seven thousand housing units since 2001 and are now achieving our target of eight thousand per year as we continue with this programme. With mortgage subsidies, manageable financing and innovative strategies like the Rent-to-Own programme, we are making these houses accessible to low and middle-income earners. Thousands of families can now secure their own shelter, and grow up the children in an environment of greater security and stability. We shall now move another step forward with our plans to construct new communities in strategic locations throughout the country.

3.Health

We aspire to the best health care possible for our population. We are building new hospitals and primary health care centres, deploying modern equipment and technology throughout the system, and are making health care more accessible to the population through mobile clinics and the provision of medicines free of charge for eleven common ailments. We have achieved a four hundred percent increase in open heart surgeries, now available free of charge for our citizens, and are now doing tissue and kidney transplants as well. We are also succeeding in controlling the spread of HIV/ AIDS and have already achieved a 50 percent reduction in deaths caused by this disease.

We will complete the construction of the Scarborough hospital and build new hospitals in Point Fortin and Sangre Grande. We will replace the Port of Spain General Hospital with a new teaching hospital and establish a new facility to serve the expanding residential, commercial and industrial needs of central Trinidad.

Culture

The arts have a most important role to play in the attainment of our vision of transforming Trinidad and Tobago into a developed nation. Now under construction are two Academies for the Performing Arts in Port of Spain and San Fernando, and another earmarked for Tobago. We have also already introduced into the secondary schools curriculum, dance, drama and the visual arts as examinable subjects; and are establishing drama theatres in all secondary schools of the nation. We have also launched the new National Symphony Steel Orchestra and are in the process of establishing the National Philharmonic Orchestra as well as the National Theatre Arts Company. Additionally, special purpose companies have already been established for the growth of the film and entertainment industries. The artistic and cultural life of Trinidad and Tobago will therefore take a giant step forward in the period ahead.

Better social services and strengthening our communities

Our communities are being strengthened throughout the country. In addition to providing adequate facilities, we have been paying attention to those in need with social sector programmes for, among others, Socially Displaced Persons, Adolescent Mothers, the Differently Abled and our Senior Citizens. We continue to provide unemployment relief and have also increased the Minimum Wage in Trinidad and Tobago. Most importantly, we are also focusing on individual empowerment through various community programmes for skills development. We will now further improve our social service system to achieve more effective and early diagnosis of problems and to ensure that no one falls through the cracks.

Ladies and Gentlemen, we have no doubt that our efforts in all areas of human development will also help all the other initiatives we have taken in our fight with that other global plague, the unacceptable level of criminal activity produced principally by the illegal trade in drugs.

The Economy

Economically, we are doing very well as the macro figures show. We have been growing at an average of 8.3 percent since 2001, having doubled in size from 55 billion dollars in that year to over 132 billion in 2007.We now have one of the highest GDP per capita ratios in the Caribbean and Latin America. We are managing with the worldwide problem of inflation which averaged 7.9 % in Trinidad and Tobago in 2007 and which we must continue to monitor. Over the last six years we have been able to attract over six billion US dollars in direct foreign investment into our country. Fiscal surpluses are a regular feature of our budgeting exercise even whilst we have been able to very significantly reduce both public and external debt with the former being now at 28 percent of GDP and the latter at 5 percent. Our foreign exchange reserves presently amount to approximately US$6.1 billion representing 10 months of import cover, exceeding the international benchmark of three months; and national savings are constantly growing with our Heritage and Stabilisation Fund now at about 2.2 billion US dollars, more than thirteen times since 2001. Our economy’s performance has been rewarded with investment grade status by both Standard and Poors and Moodys two of the world’s most respected credit rating agencies.

But glowing statistics do not by themselves satisfy our aspirations. These must translate into benefits for the people. We are ensuring that our success percolates to all levels of the society. We have generated thousands of new jobs and have already achieved full employment, with jobless levels reaching at 4. 5 % in the fourth quarter of 2007, the lowest since the attainment of our country’s independence. We have achieved an over one hundred percent increase in per capita income and, most importantly, we have reduced poverty levels by half in our country, from 35 percent in 1990 to 16.7 percent at present. We will continue to ensure that economic growth produces improvement in the lives of our people so that our nation is further fortified for present and future challenges.

The Energy Sector

We will therefore further develop our Energy Sector which continues to be the main economic driver and which we have already diversified, with natural gas now a major player. Trinidad and Tobago is presently the number one exporter of LNG in the Western Hemisphere, the world’s leading exporter of ammonia and methanol as well as a major exporter of Direct Reduced Iron.

We continue to have impressive reserves and significant exploration activity persists on land and sea for both oil and gas. A new regime of incentives for deep sea drilling is on the way and we are upgrading our main refinery at Pointe-a-Pierre, including the establishment of a Gas-to-Liquids plant at this location.

Diversification

1.Further downstream of natural gas for manufacturing

But because people are our focus, sustainable development is our goal, and so we are diversifying the economy as never before. We are going further downstream of natural gas to establish a plastics industry through the production of ethylene, polyethylene, propylene and polypropylene; and are also establishing facilities for the production of Melamine, Urea Ammonium Nitrate, a Malaeic Anhydride Processing Facility and an Acetic Acid plant, as well as plants for the production of aluminium and iron and steel.

This will promote a tremendous new wave of industrial activity, generating new wealth and employment, through the manufacture of the great many products for use in construction, agriculture, transportation, health care, and in the household, among others. Our manufacturing sector, which grew by over fifty percent over the last six years will now expand exponentially.

Trinidad and Tobago is about to become the new industrial hub of the wider Caribbean region. New industrial estates are being established as well as port facilities at strategic locations throughout the country.

2.Information industries

The information industries are also on the move with our new technology park and as we implement our national ICT plan and provide ubiquitous Broadband coverage at internationally competitive rates. Software development and testing, computer and electronics manufacturing, radio frequency identification and medical transcription are some of the industries that will be generated. Our country will also be positioned as a destination for outsourcing activity like back office accounting and processing for credit cards and digital signatures.

3.Agriculture

There is also now special focus on Agriculture. Having restructured our sugar industry, we liberated thousands of acres of arable land for food production, placing the nation in a better position to meet the present global challenge with the price of food. Six thousand new farmers have now therefore been created, each with two acres for agricultural production; and seventeen new large farms, of no less that one hundred acres each, are being established, in which private sector participation is invited, for the large scale production of food and food products for local and foreign markets. At the regional level we are participating with our CARICOM neighbours, with plans to utilise for example, the vast acreage of Guyana, for the regional production of food and the growth of agri-business in the region. Indeed, Ladies and Gentlemen, we intend to invest heavily in making Guyana the food basket of the region.

We also want significantly higher levels of private capital in Agriculture and we expect that PCS Nitrogen will serve as an inspiration with its model green house farm now being established on one hundred acres of land in central Trinidad.

4. Tourism

Tourism is also on the move in Trinidad and Tobago. A diversified and enduring product is being created. In addition to the traditional brand of sun, sea and sand, there is now focus on business and conferences; eco-adventure; health; sport; weddings and honeymoons and history and culture. We will also partner more effectively with our regional neighbours in developing and implementing the One Caribbean concept for the growth of the industry.

Visitor arrivals have grown significantly and an increasing number of prestigious conferences are being held in Port of Spain. More are on the way, including the Fifth Summit of the Americas and the Commonwealth Heads of Government Meeting, both of which will be held next year. The Summit will be attended by the thirty four Presidents and Prime Ministers of the Western Hemisphere and fifty four leaders will be present at the Commonwealth Meeting.

We have also made the environment more attractive for capital flows in tourism. The existing room stock is now being upgraded to internationally competitive standards and we are establishing a critical mass of new rooms, led by the luxury five-star end of the market. At least 796 new hotel rooms will be added in our country by the end of 2008. Two new hotels have already been opened; two more are in the final stages of construction, and there are also no less than four additional hotel projects with the high probability of being realized over the next two years.

5.The financial sector

We are also developing the financial sector which already contributes approximately 13.5 percent to the Gross Domestic Product. We will now establish the Trinidad and Tobago International Financial Center and are taking the legal, regulatory and administrative steps towards this end.

The conditions are right. Trinidad and Tobago is now the main capital market for the region. We have the dominant regional stock exchange with a number of regional listings and we are also home to the Regional Credit Rating Agency, CariCris from whom we received a triple A rating. Our ideal location makes the country attractive for international banks and investment firms interested in fostering business in the wider Caribbean and Latin America. Governments and State Corporations in the CARICOM region have been accessing our domestic financial market for bond and bank financing.

At the same time, domestic corporate borrowers are also accessing the financial market to undertake portfolio and other types of investment in CARICOM countries. In fact, the domestic financial system is becoming increasingly regionalized and internationalized. Given this scenario it is an opportune time for Trinidad and Tobago to consolidate its position as the financial capital of the Caribbean.

Supportive of our goal to establish an international financial center is our Heritage and Stabilization Fund which now stands at approximately US 2.2 billion dollars; the establishment of the Caribbean Single Market and Economy (CSME) which will integrate regional financial markets; and the coming Revenue Authority which will increase efficiency and transparency in revenue collection and tax administration as well as improve customer service.

6. Seven new areas of focus