Home' Trinidad and Tobago Guardian : July 6th 2017 Contents JULY 6 • 2017 guardian.co.tt BUSINESS GUARDIAN
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The Trade and Investment Convention (TIC)
turns 18 today.
Ribbons will be cut, speeches will be made,
and for another year T&T's manufacturing
sector will present itself to the world.
There is however, a huge shadow being cast
over industry in T&T---declining competitiveness.
As recently as May, the chairman of one of T&T's major
conglomerates belaboured the issue, noting with much dismay
that losing our competitive edge across many industries places
the country as a whole at risk.
Additionally, in the last Global Competitiveness Index put
out by the World Economic Forum in 2016, T&T fell five spots;
moving from 89 to 94 on the list of the most globally compet-
itive countries (there are 138 countries on the list).
Jamaica and Barbados rank higher than Trinidad at 72 and
But should we really be surprised?
A spiralling crime rate, (on average more than one murder
a day), a huge disconnect between wages and productivity,
declining energy sector output, chronic foreign exchange short-
ages, unconscionable public service bureaucracy, nightmarish
traffic and trade unions who tell foreign companies to "take
their rig and go" (which they did incidentally, making it an-
yone's guess what will happen to the local offshore platform
fabrication industry in the future) are among the contributing
factors that have been ongoing for years.
In terms of manufacturing, no doubt this sector will feel
Cost escalations associated with all of the above will put
that industry in a precarious position.
For now, T&T remains the manufacturing heart and soul
of the Caribbean but the obvious question is: how long can
A good insight into this conundrum comes from two of the
larger manufacturers in T&T: Nestle and Unilever.
Admittedly they are foreign companies, but they operate
in the same environment and under the same constraints as
In an interview with this publication last year, country head
of operations for Nestle T&T Michel Beneventi stated that
Nestle pays the highest price for milk in T&T.
Comparing countries among whom the Swiss food manu-
facturing giant purchases milk, Beneventi noted that milk from
T&T's dairy farmers costs US$0.64 per litre, while dairy farmers
in countries such as Ecuador and France are paid US$0.54 and
Making matters worse is the fact that this price includes a
subsidy of $1.50 provided by the State.
Beneventi also said something that should send chills down
the spine of local dairy farmers: "It may, in fact, be cheaper to
import a finished product as some of Nestle's competitors do."
Beneventi's assessment of the situation is beautiful in its
simplicity: milk farmers need to get more competitive if they
are to remain in business and in effect keep Nestle as a sat-
Pablo Garrido, chairman of Unilever Caribbean Ltd, lamented
the same issue in both Unilever's 2016 annual report and its
2017 first quarter financial statements.
"The current foreign exchange climate continues to be a
key concern. We do expect to see sustained cost pressure,"
Unilever's predicament, sadly, is not new.
Way back in 2010, then Unilever managing director Roxanne
de Freitas bemoaned the challenges of keeping a manufacturing
enterprise competitive in T&T calling it a "constant fight"
Seven years later and nothing has changed.
In fact, it has gotten worse.
So, what does all of this mean for T&T and where do we
go from here?
Well, Harvard professor Michael Porter offers some sage
"National prosperity is created, not inherited. It does not
grow out of a country's natural resource endowments, its la-
bour pool, its interest rates or its currency value. A nation's
competitiveness depends on the capacity of its industry to
innovate and upgrade. Ultimately, nations succeed because
their home environment is the most forward-looking, dynamic,
Food for thought.
ENGAGING OUR READERS
In keeping with the thrust of the digital era, we are
opening up this publication by making it more reflective
of a wider range of businesses and industries, and by
soliciting feedback from you, our readers.
You can now connect with us on Twitter through
@businessguardianTT and send your thoughts, sug-
gestions and feedback to our Facebook page, Business
We look forward to engaging with you as we continue
to promote free enterprise in T&T.
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