……..and we are lagging behind Jamaica, St Lucia, Dominica
By VASANT BHARATH
Trinidad and Tobago currently ranks 105th of 190 countries – in the bottom half – in the creation of an enabling environment for doing business.
That, in essence, means that there are 104 countries in the world where it is easier to do business than Trinidad and Tobago.
Starting and doing business is a nightmare in T&T, judging from the findings in the latest annual Ease of Doing Business study of the World Bank.
This is a dramatic fall from 66 in 2014, when, as Minister of Trade, Industry and Investment, I had worked with relevant agencies to introduce mechanisms to promote efficiency and productivity and to improve regulatory systems.
From a historic high of 66 to a dismal placing of 105!
We had reduced the timeframe for starting a new business from 43 days to three days.
Several other crucial measures were being implemented in 2014 and 2015 to further improve the business climate and to speed up paperwork to make T&T more conducive to investors.
At the rate at which reforms were being introduced, T&T would have approached modern and efficient societies like New Zealand, Singapore, Denmark, Hong Kong, South Korea, Georgia and Norway.
All these hard-worn gains have been abandoned and reversed by the Rowley Government, and now T&T is back to the red tape, bureaucracy, incompetence and wastefulness that is the hallmark of PNM regimes.
We are now witnessing the flight of business operators, such as Unilever, a major product manufacturer and employer.
Arcelor Mittal and other industrial corporations have also fled under PNM rule.
Berger Paints recently announced their closure after 68 years in business in Trinidad and Tobago.
Doing business is once more bogged down in protracted bureaucracy at a time when the country requires domestic and international investments to boost a stagnant economy.
Imbert made no mention of the Ease of Doing Business index
In his budget address, Finance Minister Colm Imbert made no mention of the Ease of Doing Business index, obviously embarrassed about the abject state of affairs.
So, what does the ease of doing business mean and how important is it to Trinidad and Tobago?
The index is a catch-all term of relevant systems and procedures in establishing a new business in a country.
They include setting up a limited liability company, obtaining construction permits, getting electricity and water, registering property, obtaining credit, paying taxes, trading across borders, enforcing contracts and adhering to labour regulations.
There are rigorous and well-researched benchmarks for these important dimensions, and they are common to all the economies that are analysed by experts of the World Bank.
Trinidad and Tobago has slumped in most of these criteria, and is especially inefficient in dealing with construction permits, registering property, trading across borders and enforcing contracts.
In the region, we are lagging behind Jamaica, which is ranked at 75, St. Lucia (93) and Dominica (103).
An open economy like Trinidad and Tobago cannot flourish without private sector investments, and the Ease of Doing Business index is an appropriate guide to prospective entrepreneurs.
The index is even more important in an era in which investments are no longer constrained by geographic borders.
Business ventures are the lifeblood of an economy, generating income. providing jobs and stimulating activity.
Under the current administration, there has not been a single international investment, compared to the annual US $1.6 billion worth of direct foreign business which was attracted from 2012 to 2015.
As for local Corporations, they have either invested in more business-friendly countries or have simply parked up their
In fact, over the past couple years, there has been a flight of capital valued at more than US $1 billion each year.
A conservative estimate is that at least 50,000 public and private sector workers have lost their jobs over the past four years.
There is over $3.5bn in cash sitting in our banks, looking for an investment home.
Against that debilitating background, Trinidad and Tobago urgently requires capital investments, in order to engender economic momentum.
But instead of creating a more facilitative environment, the Rowley Government has slipped back into bungling and ineptitude in all the essential regulatory processes.
Imbert has acknowledged a flat economic performance in the immediate future, but has clearly not seen the fundamental need for fostering a more attractive investment setting.
As Trade Minister, I appreciated that a good Ease of Doing Business ranking was a warm, open door sign to international companies and an indicator that our country was progressing.
It told the world that we are open for business and we are an ideal home for their investments.
From red tape to red carpet
Indeed, the motto of the Ministry of Trade under my tenure was ‘from red tape to red carpet’.
In 2014, Trinidad and Tobago was among the top 10 economic reformers in the world, and we were credited as being in the frontier of regulatory improvement.
Businesses saw inherent advantages in considering a modern reformist economy, with obvious advantages, incentives and a business-friendly administration.
The decline in the ease of doing business is coupled with a fall in the Global Competitiveness Index (GCI), with T&T now placed 79th out of 141 countries.
GCI assesses institutions, skills, infrastructure, health innovation, labour market and other indicators.
There is evidence that other countries are improving standards and becoming more competitive – while T&T is on a downward slide.
The top countries in the Ease of Doing Business ranking have such features as strong regulatory standards, public service efficiency and effective automated systems.
In some instances, official approvals are granted in a day.
In certain countries, state-of-the-art technology processes applications in record time.
In Trinidad and Tobago, Prime Minister Dr. Keith Rowley has been protesting about the productivity of public officers.
There have been no measures at public service reform.
During my ministerial term, the Customs and Excise Department merged its Asycuda System with the Single Electronic
Window, leading to a fast-paced and well-organised process.
The Ministry which I had the pleasure of leading appreciated the obvious and far-reaching benefits of modernising and improving professionalism and delivery in every area of activity.
That is a cornerstone to making Trinidad and Tobago a more attractive investment destination.
The Unilever story depicts T&T’s sorry state
In contrast, Imbert bemoans the “fragile economic environment”, blaming international economic realities instead of charting T&T’s own course in upgrading the regulatory framework.
The Unilever story depicts T&T’s sorry state.
The company has had a footprint in this country since 1929, through two predecessor companies, and, in 1964, morphed into Lever Brothers.
The company is sending home 285 workers and reviewing its T&T operations.
But in Singapore, where Unilever found a home more than 50 years ago, the situation is dramatically different.
Unilever’s country manager recently said: “Singapore’s superb business infrastructure, excellent human capital, connectivity, and strong base of supporting industries, combined with the support provided by the Singapore Government, make it an ideal place for a regional business
Compare that with the current business environment in T&T under PNM rule and contemplate what the future holds for us under this incompetent bunch.