Trinidad and Tobago has taken notable steps to improve the business environment

Trinidad and Tobago was one of 10 countries identified by the World Bank in its “Doing Business 2015” report as having improved the most in terms of the ease of doing business through 2013-14. Of the 189 countries assessed by the organisation, T&T’s overall rank was 79th. By this measure, it compares favourably with other CARICOM and Latin America countries.

Rapid Improvements

For the 2015 report, T&T’s overall ranking increased by 12 spots over the previous year, making the country one of the top-10 most improved. Of the other biggest movers, most countries were among the lowest ranking overall, and therefore any improvements had the potential to significantly boost standings. These included Tajikistan (166th), Benin (151st), Togo (149th), Côte d’Ivoire (147th), Senegal (161st) and the Democratic Republic of the Congo (184th). Other countries that achieved improvements in at least three of the 10 aspects considered by the World Bank included Ireland (13th), the UAE (22nd) and Azerbaijan (80th).

In T&T, the authorities made positive changes in three areas in 2013-14. They made it easier to start a business, to obtain credit and to resolve insolvency. The government’s new online platform for businesses reduced the registration time from 38 days to 14.5. Meanwhile, credit bureaux in T&T now cover about two-thirds of the adult population, in line with norms in OECD countries. Across Latin America and the Caribbean, the corresponding figure is 39%. Finally, according to the World Bank report, the new solvency law “strengthened protections of secured creditors’ rights in insolvency proceedings, giving greater flexibility in enforcement actions”.

E-Government Services

Further improvements to T&T’s ease of doing business ranking appear likely for 2014-15. The government has introduced a single electronic window (SEW), known as TTBizLink, which dramatically reduces the time and paperwork that must be completed by importers and exporters. Previously, trade transactions required the submission of forms to six different government agencies, but through the SEW, traders can now submit all the required details electronically through a single website.

As of late March 2015, TTBizLink also allows businesses to undertake a number of transactions such as applying for import/export permits and licences; applying for import duty concessions; registering companies; registering with the National Insurance Board of T&T; registering with the Board of Inland Revenue and for value-added tax; registering with the Central Tenders Board; and submitting documentation for the arrival and departure of shipping vessels.

The government hopes to extend the ambit of the SEW so that it includes a broad variety of transactions that consumers and businesses conduct with the government. Singapore-based company Crimson Logic has been charged with executing the project. Siddharth Priyesh, the regional manager of the company, told OBG that such transactions would include processing of import duty concessions, company registration and work permits. Priyesh indicated that the SEW should link nine government ministries and 25 agencies by mid-2015. He also noted that the 46 services that will ultimately be available through the SEW, making it one of the world’s most comprehensive e-business platforms.

This is in the context of the government’s promotion of ICT generally, and the proposed development is outlined in a plan for the 2014-18 period called SmarTT. Government-owned firm iGovTT, which reports to the Ministry of Science and Technology, is an ICT consultancy that promotes the overall evolution of ICT in T&T, and movement towards e-government generally. iGovTT manages two platforms that enable e-government: ttconnect and GovNeTT. ttconnect is primarily used for providing government services to the public while GovNeTT is a secure wide area communications network for the government and its agencies.

New Procurement Law

In its “Global Competiveness Report 2014-15”, the World Economic Forum (WEF) found that inefficient government bureaucracy and corruption were the two most problematic factors for doing business in T&T. However, the new Public Procurement and Disposal of Public Property Law should help perceptions on both accounts, replacing the previous legislation for government procurement. According to the T&T Chamber of Industry and Commerce (TTCIC), the old law was “highly bureaucratic and with little connection to a sophisticated market place”. Further, it was “largely confined to the tendering stage of the procurement cycle, with little reference to the critical design and execution stages”.

Although acknowledging that further progress needs to be made, the TTCIC has suggested that, in addition to improving anti-corruption standards in line with the government’s international obligations, the new law will provide better financial oversight and control; boost transparency of public spending; improve the integrity of the procurement process; and “systematically bring all agencies’ spending public money under a single, overarching legal and regulatory framework that effectively covers all stages of the procurement process”.

Limiting Spending

Randall Karim, director of policy and strategy at the Ministry of Trade, Industry, Investment and Communications, told OBG, “The new law should stop leakage of public expenditure if fully implemented.” The government’s current expenditure rose from TT$41.65bn ($6.4bn) in the year to September 2011 to TT$53.26bn ($8.21bn) in the same period for 2014. He said the new law will be similar to Jamaica’s procurement law, which seems to be working well.

Following his visit to T&T in January 2015, Elie Canetti, head of the IMF mission to the country, noted that, once implemented, “the new [procurement] law should help to improve expenditure efficiency and allay concerns regarding corruption.” He also welcomed moves by the Central Bank of T&T (CBTT) to deal with shortages of foreign exchange, which remained a “critical headwind” for the economy through 2014. “We are encouraged, therefore, by the central bank’s exchange injections until the backlog of orders is eliminated. It will be essential to continue to meet foreign exchange demands in a timely manner in order to restore the market’s confidence,” he added.

Legislative Changes

Four recent pieces of legislation should help strengthen T&T’s financial services sector. Introduced to parliament in April 2015, the new Insurance Bill will replace the previous sector legislation from 1980. The new bill incorporates the minimum continuing capital and surplus requirement regime that is a central feature of the regulations in Canada, and has broad support from the insurance companies.

Another piece of new legislation undergoing review is the Credit Union Bill, which will transfer responsibility for the oversight of credit unions to the CBTT. This change is in line with international best practices, and will take into account the findings of the Commission of Enquiry into the collapse of the Hindu Credit Union. Credit unions have previously been overseen by the Cooperative Development Division under the Ministry of Labour and Small and Micro-Enterprise Development.

The third of the new laws, the Occupational Pensions Bill, updates the previous law governing pension plans, which are already overseen by the CBTT. The Unit Trust Corporation (UTC), T&T’s major mutual fund firm, is working with the CBTT to update the relevant law, which has not been changed since the creation of the UTC in 1982 by an act of parliament. According to the IMF, “The [new] law will need to cover a number of instruments and practices developed since then and clarify UTC’s ownership structure and governance.”

Finally, a new law is also set to require formal licensing for real estate agents, which has the potential to significant reform the sector considering that, as of mid-2014, only one-third of the 1500 agents were licensed.

In the short term, progress towards the passage of the new legislation may be delayed by the forthcoming elections, due to take place in autumn 2015. However, by early 2016, it should be clearer how the new procurement law is being implemented along with potential new or updated financial laws. It is also reasonable to expect that the government will have made more progress expanding the SEW’s services. As the ease of doing business improves, perceptions of T&T’s competitiveness may also change for the better.