Home' Trinidad and Tobago Guardian : January 12th 2017 Contents BG20 | COMMENTARY
BUSINESS GUARDIAN guardian.co.tt JANUARY 12 • 2017
Transitioning to the new normal
Today we conclude the two-part series
started last week, outlining our outlook
for 2017. The highlights of 2016 have been
holistically reviewed to convey a mean-
ingful and empirically sound forecast.
Part 1 was published last week.
The domestic situation
Having registered consecutive
quarters of decline, it was
clear that going into the fis-
cal year 2016/17, the Prime
Minister urgently needed to
implement measures which
would simultaneously reduce expenditures and
increase revenues as the recession continues.
As reported in the mid year review 2016,
there was a decline in the expenditure fig-
ure, which fell by TT$5.525 billion. Since the
collapse in oil and gas prices in 2014, T&T has
lost TT$20 billion in annual revenue which
has accounted for lowered revenue figures.
The Government subsequently has de-
vised initiatives to treat with the revenue
shortfall of TT$6.034 billion (for fiscal year
2016/2017). These include:
Legislative amendments were made to fa-
cilitate changes to the value-added tax (VAT)
system. A significant number of items which
were previously zero-rated were returned to
the vatable category and simultaneously VAT
was reduced from 15 per cent to 12.5 per cent.
Time will tell if these changes achieved the
targeted increase in taxes.
Plans were also articulated to re-introduce
the Property Tax Act and to introduce the In-
surance Bill 2016 and the Gaming and Betting
Bill 2015; the latter two being geared toward
enhancing AML/CTF compliance.
The full operationalisation of the Public Pro-
curement and Disposal of Public Property Act
has been promised for the first part of 2017,
and along with it will be expected changes
to the system for procurement. It will repre-
sent a major transition, and to facilitate this,
there must be a simultaneous readying of both
government and public and private contracts
under the Act.
Also needed are structural and procedural
shifts away from the Central Tenders Board
to the appointment of the Procurement Reg-
ulator and the Review Board under the Act.
More than likely, the expertise of a consultant
would be required to drive this major change
initiative, and realize a smooth transition to
If properly implemented on a timely basis,
the above would potentially make a positive
impact on Government revenue, as well as
enhance perceptions of good governance.
Difficulty in accessing foreign exchange per-
sists and this has proved quite challenging for
businesses and consumers. Many commercial
banks have had to limit the sale of currencies
on a monthly and even daily basis, with dif-
ferent banks taking different approaches. It
is expected that such shortages will continue
into the latter part of 2017, when the foreign
exchange market is likely to register some relief
with the commencement of new natural gas
production from bpTT.
Notwithstanding, in the interim period the
T&T Chamber has embarked upon a series of
business-building initiatives to bolster capac-
ity and capability to export, thereby increasing
foreign exchange earnings.
The Government has committed to further-
ing its programme of divestment of State En-
terprises. This is in keeping with a view long ex-
pressed by the T&T Chamber that Government
needed to play a facilitating role for business,
rather than compete with the private sector in
the business arena. In 2017, Government in-
tends to pursue the partial divestment of Lake
Asphalt to an international strategic partner,
who can successfully market T&T's natural as-
phalt and diversify the company's product line.
Chamber in the new normal
Though many of the economic projections
from major global institutions point to slow-
er economic growth and greater uncertainty
worldwide, the T&T Chamber remains opti-
mistic that the natural resilience and creativity
of our people would help us to weather the
Working with our members and the wider
business community is of optimum importance
in 2017, to help them adapt to this new normal
and, ultimately, emerge successfully in the end.
In addition to these efforts, the T&T Cham-
ber will provide more immediate growth op-
portunities to its members and the national
business community, particularly in the sphere
of trade negotiations and trade missions.
Over the past six years, the government has
made significant strides towards enhancing
commercial opportunities for T&T exporters to
Latin American markets, through negotiation
of multiple partial scope trade agreements.
These countries include El Salvador, Gua-
temala and Chile. A prime example is the
recently concluded agreement with Panama
which came into force in October 2016. The
Government will continue its work to final-
ise trade agreements with El Salvador and
Guatemala in 2017.
Currently, discussions are ongoing with re-
spect to engaging Chile in the negotiation of a
partial scope trade agreement. In all instances,
the T&T Chamber, through its international
trade negotiations unit (ITNU), ably provided
much needed Private Sector input to inform
The T&T Chamber has been actively engaged
in work to ensure that the business commu-
nity is prepared to take full advantage of ex-
isting and potential opportunities under the
negotiated Economic Partnership Agreement
(EPA) between the European Union (EU) and
Promoting the interests of our members
in these markets and preserving the present
market advantage of our domestic manufac-
turers and service providers, remains high on
The ITNU has also been seeking new oppor-
tunities for members in external markets, both
within Caricom and in extra-regional markets.
With plans to continue the successes of past
trade missions to Cuba and Panama, the ITNU
will lead trade missions to markets of key inter-
est for its members. Guided by research con-
ducted in 2016, the ITNU will soon announce
which markets were selected by members for
the next T&T Chamber trade mission which
will take place in June 2017.
There is no denying that as a nation, we are
in a crisis; but all is not lost since adversity can
stimulate innovation, creativity and ingenuity.
"Never let a good crisis go to waste" is a say-
ing famously attributed to Winston Churchill.
And so, our capacity to rebound will be tested
in the coming months, even as we grapple with
this new normal.
What is required now is a dynamic shift in
the way we do business. This year may well
be the catalyst for jumpstarting the plans,
projects and programmes on which we, as a
nation, failed to follow through before.
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