One key strategy for improving the performance of Trinidad & Tobago’s economy is strengthening the country’s base of small and medium-sized enterprises (SMEs). Developing this class of businesses is expected to help create formal sector jobs, diversify GDP, and reduce dependence on oil and gas exports.
The government is undertaking several initiatives to support small businesses through agencies such as the National Entrepreneurship Development Company (NEDCO) and the Ministry of Social Development and Family Services (MSDFS). NEDCO offers loans and mentoring services to local entrepreneurs who are currently struggling to secure financing from traditional banking institutions. The company has its main office in Port of Spain and four satellite entrepreneurial development centres in other parts of the country. The MSDFS, for its part, offers a micro-enterprise and training grant to entrepreneurs. The grant programme offers funding of up to TT$5000 ($742) for residents who are over the age of 18 and working to launch a small business venture.
Although the government is working to provide support to SMEs, it is still in the process of defining a clear strategy for pursing economic development in sectors beyond oil and gas. “While there is much discussion on the need for further diversification of the Trinbagonian economy, the real issue to be tackled is what to diversify in. There is a very limited list of scaled tangible commodities and services in which the country can be globally competitive,” Mitchell de Silva, the vice-president of the American Chamber of Commerce in T&T, told OBG. “Additionally, the process of economic diversification should be followed by a diversification of thinking and methodology at all levels of society.”
In the search for industries where T&T has the ability to grow and mature, tourism and hospitality has been highlighted. The World Travel & Tourism Council estimates that the tourism industry directly represented 2.8% of T&T’s GDP in 2017 and 2.9% of GDP in 2018. Tourism currently supports over 23,000 jobs in the country – about 3.7% of total employment – yet the industry is generally regarded as operating far below its potential capacity. While a new five-star Sandals resort in Tobago – which is still in the negotiation phase – is expected to provide a boost, T&T can further increase investment in the sector by encouraging smaller, local operators. SMEs can participate directly as boutique hotel owners or independent travel agencies, for example, or indirectly by acting as industry suppliers.
In a related, niche segment, T&T is working to promote and expand the country’s yachting environment. The yachting industry currently supports around 180 firms and over 1700 jobs, but has the potential to expand. The government is aiming to draft new legislation to make it simpler for foreign yachts to enter and exit T&T, and is also developing a marketing plan to promote the island as a destination for yacht owners.
Another area in which SMEs can add to economic development is in the construction sector, which is already one of the largest employers in the country, comprising 16% of the labour force. T&T’s FY 2018 budget includes a provision that provides a TT$100,000 ($14,800) bonus to developers who build and sell approved low-income housing units. This programme can be supported by projects carried out by small and medium-sized construction companies.
The government is also looking for ways to orient construction activity towards rehabilitating and modernising the country’s tourism offerings. In FY 2018 T&T raised the reimbursement limit for capital expenditure on hotel room renovations from 25% to 50% per room, and increased the property upgrade reimbursement cap from TT$750,000 ($111,200) to TT$1.5m ($222,500). Meanwhile, the Small Approved Tourism Properties programme raised the allowable reimbursement per room at SME facilities from 20% to 40%, and increased the property reimbursement limit from TT$75,000 ($11,100) to TT$150,00 ($22,200).
In addition to tourism, another service sector in which T&T is trying to enlist more SMEs is the budding IT and business process outsourcing (BPO) sector, which currently employs over 1400 people. The Trinidad and Tobago International Financial Centre in Port of Spain is working to attract a greater number of foreign BPO operations, and one international energy company has already relocated its North American Petroleum Accounting Office to the capital.
The government is looking to create a range of programmes to bolster the growth of this sector and aims to engage more technology entrepreneurs in actively developing an IT ecosystem in the country. One way to accomplish this will be by fostering partnerships between government agencies, local universities and private sector companies.
Shifting focus to the rural regions of the country, agriculture is a sector that has the potential to develop significantly beyond current levels, driven by independent farmers and small cooperatives. Agriculture currently accounts for less than 1% of GDP; as a result, the country’s food import bill totalled TT$56.9bn ($8.4bn) between 2003 and 2016. Boosting agricultural output would provide jobs and income in rural areas, while alleviating pressure on T&T’s balance of payments and foreign exchange needs.
The government offers many incentives to farmers, including tax concessions on vehicles, equipment, raw materials and other inputs, as well as subsidised loans. In FY 2018 a TT$20m ($3m) allocation was provided to establish a programme that will award grants of up to TT$100,000 ($14,800) to farmers who have completed training and certification courses to encourage rational and efficient planting. In FY 2017 officials provided training to around 1400 farmers through 85 different courses and distributed 482,100 seedlings. T&T also created the Coconut Rehabilitation and Replanting Programme in mid-2016, which trains smallholder growers in new technology and production processes.
Diversification efforts are being channelled to unconventional sectors, as well, such as the country’s creative industries. The government is looking to leverage the international success of pop artists such as Nicki Minaj, who was born in Port of Spain, and Cardi B, who has family ties to the island nation, by creating an initiative called the Artiste Portfolio Development Programme in FY 2018 for musicians who have the potential to “export” their songs around the globe.
The country also set aside funds in the 2018 budget for an Export Ready Academy and live music district to promote entrepreneurial musicians both domestically and abroad. These programmes complement the Trinidad and Tobago Music Company, a parastatal entity that was created in 2014 with the goal of consolidating and supporting the local music industry. MusicTT, meanwhile, is a subsidiary of the Trinidad and Tobago Creative Industries Company. In August 2018 MusicTT promoted the release of a new song by local artist DJ Bravo that showcases T&T’s cricket and Carnival traditions.
Another celebrated local performer is Calypso Rose, who has had a decades-long career. The music video for her most recent song, “Calypso Blues”, which was released in March 2018, highlights the country’s cuisine and culture. Furthermore, songs by the singer Kalpee had been streamed over 120m times online by mid-2018. The music industry is not likely to become a major national employer, but it increases T&T’s visibility in the region and the world, while giving creatively-oriented SMEs and individuals a potential business avenue.
Another creative industry in T&T is film. The 2018 Trinidad and Tobago Film Festival (TTFF) is scheduled for September 18-25 and will feature movies by local directors such as Mariel Brown, Teneille Newallo and Kim Johnson. “TTFF has a special interest in supporting the work of local filmmakers, and this year we are very pleased with the number of short and medium-length films,” Bruce Paddington, the festival director, said in a press release in August 2018. “The production of a ‘short’ demonstrates the ability of filmmakers to make more films and move on to feature films.”
Under the FY 2018 budget a Production Assistance and Script Development Programme has been created, which provides funding to filmmakers to help with the production costs of locally made movies. The programme will also help initiate the regular broadcasting of local films to a wider audience. One example of a recent film project was the making of the music video for local group Freetown Collective’s song “Space for a Heart”. It was directed by native cinematographer Nadia Huggins and released on July 27, 2018. Although the film industry is unlikely to emerge as a primary source of jobs in the country, additional studios and acting companies may spring up as T&T’s movies gain popularity around the globe.
In order to substantially increase economic activity in sectors other than oil and gas, T&T is engaging with SMEs and entrepreneurs. The country’s support for small businesses in tourism, construction, IT, agriculture and the creative industries will be essential for achieving the long-term economic transformation T&T seeks.
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