Home' Trinidad and Tobago Guardian : July 4th 2013 Contents BG4| COVER STORY
BUSINESS GUARDIAN www.guardian.co.tt JULY 2013 • WEEK ONE
The economies of the Caribbean
are in serious difficulties, so local
companies must look for export
markets out of the region, said
Dr Anthony Gonsalves, senior
fellow, Institute of International Relations,
University of the West Indies (UWI).
He told the Business Guardian by phone on
Monday that local companies do not have to
begin by exporting to far off markets in Asia
or even the European Union (EU) at first, but
it can be done in Central America and the
"Caricom markets are shrinking because of
all the problems they are facing. Their
economies are in a lot of difficulty, so I would
be surprised if T&T businesses are still export-
ing to Caricom the same volumes as in previous
years. Their tourism is in a decline and they
have high debt levels," he said.
Gonsalves advised local companies to look
at the immediate neighbours out of Caricom.
"The next sort of concentric circle is usually
the Dutch- and French-speaking islands, then
Cuba, Dominican Republic and Central Amer-
ica. At a marginal level, they can sell a few
more things and get into those markets. These
are markets in the region where it is easier for
them to get into as there are existing arrange-
ments. In Cuba, there is a trade facilitation
office and there are contacts in the DR, they
also want to set up an office in Panama."
One reason why it is difficult for local busi-
nesses to break into foreign markets is simply
because of their small size and inability to
develop the necessary economies of scale,
"The reason why most of them stay within
Caricom is because of the cost factor. It is dif-
ficult for small firms in small countries to
export at great distances because they have
to develop the logistics, they have to penetrate
markets and develop the economies of scales.
"It is not easy to get the goods on the shelves
in foreign markets. In the United States, if you
go to the large markets, you have to pay a high
price to get your goods on the shelves. Unless
a company has big plants and can support
the marketing economies of scale and pay for
these large super stores, it is more difficult,"
An option is for local businesses is to export
to "ethnic markets."
"This is where they can sell processed food-
stuff that is known here and which Trinida-
dians and West Indians would be acquainted
with. The bigger question is: how to get busi-
nesses to go beyond that and take the risk to
get involved in non-traditional markets."
He said the Asian economies have done well
because of the support their local businesses
"In Asian countries, they support their busi-
nesses until they can stand on their feet. The
governments give them various subsidies, and
in the early stages, a certain amount of pro-
tection. Here in T&T, the T&T Export Com-
pany has begun to do a few things. At the
same time, we are not South Korea, as the
markets are small and not developed."
He suggested initiatives the state can use
to assist businesses to grow to become export
"There can be tax credits, subsidies on train-
ing, subsidies on marketing. Then there is the
national subsidy on energy, which also gives
them some competitive edge, so it has to be
targeted," Gonsalves said.
Gonsalves said the Trade and Investment
Convention (TIC), which was held in June at
the Hyatt Regency Trinidad Hotel, is an impor-
tant avenue in assisting local companies wish-
ing to build international contacts.
"They make a contribution as they bring
together investors and buyers. Some of these
come from various parts of the region and
countries abroad, so that helps them to build
contacts and markets. I think it is useful. There
are also seminars the T&T Manufacturers'
Association (TTMA) has that help them how
to do business standards, packaging and rules
Although he was not present at this year's
TIC, Gonsalves said from what he has heard,
companies and businesses made contacts.
"It is a very competitive world and you need
very much that TTMA members and com-
panies in general are informed and providing
them with more knowledge on how to attack
markets in various parts of the world. It is not
an easy world, especially when there are other
countries out there which are doing more to
stimulate businesses and get them on the
Three weeks ago at an American Chamber
of T&T seminar on trade, Gonsalves said out
of 500 T&T companies that export, only 126
of them export out of the Caricom market
and more needs to be done to help companies
to grow beyond the region.
"We cannot talk about competitiveness until
we talk about firms, as they are the ones who
export. The problems and challenges they
have. I know this country is concerned about
its dependence on oil and gas, the dependence
on the Caricom market. We need to go forward
and diversify, We must look at these 324 firms
and see what can be done for ten per cent to
20 per cent to go outside of Caricom and
areas in which they can be competitive."
Exporting companies must look
beyond debt-ridden Caricom
Continued on page 5
Links Archive July 3rd 2013 July 5th 2013 Navigation Previous Page Next Page