Interview: Gervase Warner
What effect has government deficit spending had on the overall economy of the country?
GERVASE WARNER: Deficit spending has not corrected the course of the economy as hoped. It did, however, postpone the pain, maintain the social fabric and keep the country together. Social, political and economic issues tend to converge, and all governments must find a way to manage the complexity of all three. The current government has focused on fiscal stabilisation and correcting the economic freefall faced at the start of its term. As such, it has brought in a level of fiscal discipline.
Despite this, we have not experienced the real economic recovery we expected, and as such we need to examine the cost of our inputs, the quality of our outputs and the productivity of our capability – all of which will take a lot of work. Trinidad is still experiencing characteristics of a downturn. For example, lower-cost vehicles are being consumed at a faster rate than midrange vehicles were during 2014-16, and consumers are incredibly sensitive to supermarket prices. Being able to offer value to the population is therefore critical.
How are developments in technology improving the retail space in Trinidad & Tobago?
WARNER: The Caribbean tends to lag in terms of the deployment of technology. Part of the issue is the structure of the countries here. For example, online grocery shopping is lagging in adoption because most of our countries lack the economies of scale to justify the investment in complex and costly dedicated distribution centres required for efficient delivery of this service. T&T, however, is successful in utilising social media and engagement, which are important to digital commerce. Customer interaction and feedback via social channels are common, and businesses must pay attention to online exposure because a small issue can tarnish a reputation and cause shoppers to look elsewhere.
Future innovation such as the rollout of automatic ordering will confer a stronger interface between retailers and suppliers. The arrival of self-service and self-checkouts at supermarkets across Trinidad is welcome, but it is not an easy system to implement because of the technology and security needed. The first self-service pilot should come on-line by 2020, which will be a major step forward for T&T.
To what extent could prioritising certain industries help increase overall productivity?
WARNER: Singling out a specific industry such as agriculture for diversification has proven to be a task that does not bring great return on investment. In the past the government identified several priority industries including film, ship repair, tourism and agro-processing. In reality, however, businesses will seek out the right opportunities and work in industries that make the most economic sense for them.
To boost economic productivity the right structures need to be in place. In agriculture, for example, we need safety, security and policing so that, in the case of stolen crops, for example, the perpetrators are brought swiftly to justice. We must also make it easier to do business in T&T and remove barriers to growth such as slow bureaucracy and the tedious steps needed to complete projects. There are too many obstacles deterring investors from entering the market – even if you manage to get past the red tape, there are secondary risks such as petty and serious crime.
The government could spend more time addressing inefficiencies and the factors that have led to poor productivity. If they were able to successfully solve these issues, businesses, investors and entrepreneurs would be able to identify more opportunities in a larger number of industries, which would in turn lead to increased levels of investment and growth. For the most part, the strategy of focusing on certain industries or providing incentives to boost a single industry has not been effective; we should instead focus on improving the ease of doing business across all sectors of the economy.
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