Home' Trinidad and Tobago Guardian : January 16th 2014 Contents JANUARY 2014 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
"We are looking at doing the project in two
phases. It is well underway. We started a number
of years aback, did a framework for it. There
is push back from the providers because every-
body wants to retain their customers."
He said this initiative will assist in growing
the market. A steering committee has been set
up. This is how it is intended to work.
"When you make a call and the call goes to
a network, it goes first to this database to see
the number you are calling, where that number
is resident. Right now, it is very easy to determine
whether you are on Flow or TSTT s network
based on your number. Once you move around,
the numbers don t mean that much again. You
can have what is considered to be a TSTT num-
ber, but you are on the Flow or Digicel."
The authority is entirely self-funded. Fees
collected are used to operate TATT. Surplus
revenue goes to the Government. It takes for
the year between $40 million and $50 million
to operate the entity.
Telecom contributes about three per cent to
T&T s gross domestic product.
"We would like that (contribution to GDP)
to grow a lot more. We have been in talks with
the Central Statistical Office. We are some times
tagged with another entity when they pool the
revenues and they look at the contribution to
GDP. We have been talking to them to pull out
the telecom s bit (in order) to have a pure assess-
ment as opposed to mixing it (the statistics)
with something else."
Seecheran said further efforts would be made
to try to transform and expand the sector for
"We have five divisions: technical, legal and
regulatory, finance, administration and policy
development, marketing and economics division
as well as human resources. Those are the divi-
sions which are reporting to me."
The total complement of staff in TATT is 80.
Though TATT has adjusted its structure,
Seecheran said it is not an expansion but, in
order to cope with the growing dynamics of
the telecom sector, there was a need to make
Credit rating agency Standard
& Poor s (S&P) is projecting
US$19,000 per capita gross
domestic product (GDP) for
T&T in 2013. GDP is calcu-
lated by adding the value of
all final goods and services produced in the
country during the year. Per capita GDP is
calculated by dividing GDP by the number
of people in the country.
In its January 9 (2014) report, S&P said:
"Rapid growth led by the energy sector more
than doubled T&T s per capita GDP over the
last decade to a projected US$19,000 in 2013.
Its large energy sector sustains long-term
growth prospects and provides fiscal revenues
that should allow the government to maintain
moderate debt levels. At the same time, the
sector exposes the economy to terms-of-
trade shocks. It accounted for 44 per cent
of GDP and 81 per cent of merchandise
exports in 2012. Other sectors of the econ-
omy---the expansion of which could help
attenuate this vulnerability---are developing
As for this year, S&P Ratings Services
"expects per capita GDP to rise by 2.6 per
cent in 2014, thanks to both recovering energy
output and continued growth in the non-
New York-based S&P credit analysts Joy-
deep Mukherji and Roberto H Sifon-Arevalo,
who authored the report, wrote: "Our pro-
jections assume that the country s trend eco-
nomic growth rate is likely (to be) 2.5 per
cent to 3 per cent (2.5 per cent-3 per cent),
with the caveat that projecting energy output
and prices is inherently uncertain. We esti-
mate T&T s gross external financing needs
at 60 per cent of current account receipts
plus usable foreign exchange reserves on
average for 2013-2015.
"The country is projected to remain in a
net external asset position in the coming
years, thanks to persistent current account
surpluses. That said, net external investment
payments could reach one-fifth of current
account receipts in 2013, and we expect them
to remain around this level because of high
profit and dividend repatriation."
S&P said that "a large programme of main-
tenance and technological upgrades in the
energy sector in recent years disrupted both
downstream (refining petroleum crude oil
and processing raw natural gas) and upstream
(exploration and production) activities, cutting
GDP growth. Energy output is likely to expand
in 2014 because of fewer bottlenecks."
Moreover, S&P said, "changes in tax and
other policies in recent years have encouraged
more activity in the energy sector, as we ve
seen in growing private-sector participation
in recent onshore and offshore bidding
rounds. As a result, official reserves of gas
and oil---which had declined in recent years---
may stabilise in the coming years."
S&P said the Government s Heritage and
Stabilisation Fund (HSF), which holds fiscal
assets of about 20 per cent of GDP, and the
country s "investor-friendly policy in the
energy sector should sustain long-term exter-
nal and fiscal flexibility."
S&P expects the central government to
post fiscal deficits of about 2.5 per cent of
GDP through 2014-2015, keeping net general
government debt (including central bank
debt) below 20 per cent of GDP.
"The local currency rating is A , the same
as the foreign currency rating, reflecting the
country s heavily managed---de facto pegged---
floating exchange rate," S&P said. Credit rat-
ings agencies usually issue a rating on the
country s ability to make good on its debts
in its local currency---which it calls its "local
currency rating"---and then also in foreign
currency (mostly the US dollar) which it calls
its "foreign currency rating."
Giving its outlook for T&T for the future,
S&P said: "The stable outlook reflects our
expectation that T&T will continue to enjoy
a sound external profile, thanks to persistent
current account surpluses and largely local
financing of the public-sector deficit. The
increase in exploration activities in the oil
and gas sector in recent years should sustain
energy production over the coming decade,
contributing to economic growth. We expect
that a moderate pace of GDP growth, between
2 and 3 per cent annually, over the coming
three years and limited fiscal deficits will lead
to a stable burden of government debt."
However, S&P said: "A sustained fall in
global energy prices would hurt fiscal rev-
enues, dampen GDP growth, and weaken
T&T s external liquidity. Poor GDP growth
could result in a rising general government
debt burden, which unexpected contingent
liabilities from public-sector enterprises could
exacerbate. Failure to take timely and sufficient
steps to address the deterioration of the coun-
try s fiscal and external profile could result
in a downgrade."
Success in boosting energy exploration and
production, as well as in enlarging down-
stream activities, could improve GDP growth
prospects over the next three to five years,
S&P said. That, along with steps to strengthen
non-energy fiscal revenues, would gradually
improve government finances and reduce the
sovereign s debt burden.
S&P said: "Stronger public finances and
better external liquidity would improve the
government s capacity to withstand the neg-
ative impact of a potentially sharp fall in
energy prices. Under such a scenario, we
could raise our ratings on T&T."
US$19k per capita
GDP for T&T in 2013
From Page 4
As for this year, S&P
"expects per capita GDP
to rise by 2.6 per cent in
2014, thanks to both
recovering energy output
and continued growth in
the non-energy sector."
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