The Report: Trinidad & Tobago 2018
Trinidad and Tobago has one of the largest economies in the English-speaking Caribbean, with a GDP of $22.2bn in 2017. Given that the energy sector is responsible for around one-third of economic output, T&T has faced similar challenges to other hydrocarbons-based economies since the fall in global oil prices in 2014, including a widening fiscal deficit. Ongoing reforms seek to address issues such as inefficient public spending and tax collection, as well as excess employment in the public sector, and observers are optimistic that growth will return in the near term.
Country Profile
Trinidad and Tobago possesses robust institutions, with a stable democratic system and strong regional and international ties. Nevertheless, the country has faced a series of corruption cases, and a number of initiatives have been launched to combat this issue. T&T faces further challenges related to unemployment, particularly among the young, along with law and order, though figures remain below that of neighbouring states. Furthermore, recent economic and political instability in Venezuela has led to a rise in the number of refugees in the country. This chapter contains an interview with President Paula-Mae Weekes; and a viewpoint by Luis Alberto Moreno, President, Inter-American Development Bank.
Explore chapterEconomy
With global energy prices recovering and a new natural gas project now on-line, some predict an end to T&T’s recession in 2018. In May 2018 the Ministry of Finance reported that as energy activity recovers and other sectors begin to grow, tax revenues will likely exceed expectations, and the fiscal deficit was revised down from 3.1% of GDP in 2018 to 2.5%, compared to 8% in 2017. However, while a rebound in the energy sector is welcome, it is other industries that require the majority of government focus if the country is to become sustainably diversified and financially secure for the long haul. This chapter contains interviews with Allyson West, Minister of Finance; Patricia Ghany, President, American Chamber of Commerce of Trinidad and Tobago; and Derek Chin, Chairperson, Movie Towne.
Explore chapterBanking
The banking sector in Trinidad and Tobago maintained profitability and consolidated its financial stability in 2017, in conjunction with broader improvements in economic health. Banking is poised to play an important role in supporting the country’s continued development, with executives in the sector expecting T&T’s solid economic performance in 2018 to continue into 2019. In a May 2018 public address, Colm Imbert, the minister of finance, announced that the country was on the road to an economic rebound. In the near term, domestic banks are seeking to hone their competitive edge and enhance their capacity for dealing with technological change as the economy evolves and expands. This chapter features interviews with Ronald Harford, Chairman, Republic Financial Holdings; and Karen Darbasie, Group CEO, First Citizens Trinidad and Tobago.
Explore chapterCapital Markets
Economic growth is expected to gather speed in 2018 and 2019, and the Trinidad and Tobago Stock Exchange could benefit through higher share prices and more players becoming involved with the exchange. Even if T&T’s road to economic recovery is long, companies with a healthy cash flow have the option to return a higher percentage of their earnings to shareholders. Increasing dividend pay-out ratios would defend the yields earned by investors in a difficult economic environment. New tax measures may offset incremental economic growth in the near term, however, and affect the earnings of the country’s listed companies. In FY 2018 a change was implemented to the tax regime that subjects companies earning over TT$1m ($148,300) per year to a marginal tax rate of 30%, up from 25%. This increase could deflate the impact of companies on the Composite Index by a few percentage points. This chapter includes an interview with Hadyn Gittens, CEO, Trinidad and Tobago Securities and Exchange Commission; and a viewpoint by Gregory N Hill, Managing Director, ANSA Merchant Bank.
Explore chapterInsurance
While an ongoing scarcity of foreign exchange (forex) poses a challenge for the sector, macroeconomic conditions are expected to continue to recover, which bodes well for the industry. Though penetration levels remain low, Trinidad and Tobago exhibits strong growth potential, with a comparatively wealthy population and rising demand for health and life insurance products. Moreover, improvements to the regulatory framework, notably the Insurance Act of 2018, appear set to ease business operations and increase consumer confidence. With recovery setting in, downward pressure on premiums may ease; however, industry stakeholders will need to keep costs down and preserve competitiveness to take full advantage of the opportunities to expand market share. This chapter features an interview with Jacqueline Quamina, Chairman, National Insurance Board.
Explore chapterRegional Relations
Trinidad and Tobago has played a crucial role in the integration of the Caribbean, particularly among the Anglophone countries of the region, for decades now. A promoter of the Treaty of Chaguaramas in 1973, the first step towards deeper regional integration after the mixed fortunes of the establishment of the short-lived West Indies Federation between 1958 and 1962, T&T subsequently became a founding member of the Caribbean Community (CARICOM). Between 1998 and 2013 T&T’s share of total intra-CARICOM exports rose from 37% to 70%, with Jamaica being the principal importer of T&T exports over this period. Alongside T&T, the international organisation currently has 14 full members, five associate members and eight observers. This chapter contains an interview with William Warren Smith, President, Caribbean Development Bank.
Explore chapterEnergy
The oil and gas industry has long been the driver of Trinidad and Tobago’s economy. In 2017 the petroleum sector accounted for 33.7% of GDP, according to the “Review of the Economy 2017” report by the Ministry of Finance. T&T plays an important role as a gas supplier for the Latin American and the Caribbean market, given that Peru is the only other exporter of liquefied natural gas (LNG) in the region. Falling global oil prices and a drop in production have spurred T&T to consider more stable sources of energy to boost its economy. However, despite increasing interest in renewables, the country is still focused on developing its natural gas segment. Upcoming gas projects, including the Dragon gas field deal with Venezula, and recent output figures are encouraging a positive outlook for the sector, with the rebound in gas production levels expected to continue on an upward trajectory. This chapter contains interviews with Franklin Khan, Minister of Energy and Energy Industries; Claire Fitzpatrick, Regional President, BP Trinidad and Tobago; and Mark Loquan, President, National Gas Company of Trinidad and Tobago.
Explore chapterIndustry & Retail
Manufacturing plays a key role in the non-energy economy, of which it is the second-largest component. It is also a significant employer, accounting for 8% of the active workforce as of the third quarter of that year, per the most recent central bank figures. While the outlook for manufacturing remains challenging, performance figures indicate some measure of success in broadening the country’s economic base, using manufacturing as a key driver. Building momentum and sustainable growth will be dependent on the government’s continued focus on diversification. In response to the changing retail landscape, the MoTI launched a new consumer policy in March 2018 to align the market with domestic, regional and international trends and norms, thus allowing consumers and suppliers to participate with confidence. Changes in the sector had created deficiencies in consumer protection in several areas of the old legislation; for example, there was no protection for consumers making digital transactions. The new policy seeks to address the legislative, administrative and enforcement needs of the evolving market, improving the foundation on which to build sustainable retail growth and development. This chapter contains an interview with Mikaeel Mohammed, CEO, SM Jaleel.
Explore chapterConstruction & Real Estate
The construction sector has the potential to satisfy the housing demands of Trinbagonians, improve the transport infrastructure and support economic growth over the long term. Local professionals have been largely responsible for the built environment of Trinidad and Tobago until recently, and the domestic sector still has strong potential to develop local capabilities outside T&T. However, proper planning is required to ensure that the sector can advance in a way that safeguards the interests of the country’s future generations. In the face of subdued demand and the resulting competition for tenants, developers are adapting to the shifting demographics and rising requirements for improved service delivery and amenities in the office and residential segments. Longer-term growth will be largely dependent on the health of the economy, as this could once again shift the dynamics of real estate in T&T. As the economy rebounds, market demand is expected to gradually catch up to supply. This chapter includes an interview with Meng Yan, Managing Director, China Railway Construction (Caribbean) Company.
Explore chapterICT
As Telecommunications Services of Trinidad and Tobago continues to expand its 4G LTE network launched under the bmobile brand in 2016, Digicel began the rollout of its 4G LTE network in early 2018, promising eventual island-wide coverage. However, local operations for the company are facing a potential consolidation phase over 2018 and 2019, as the group’s transformation programme mandates a global 25% reduction in its workforce. This trend of consolidation is anticipated to persist in other large companies, as operators introduce measures to advance their long-term strategies in pursuit of digital transformation. With a key sector development strategy already in place, the state aims to increase IT’s contribution to 5% by 2021, and as growth indicators in a number of segments are picking up, prospects for T&T’s ICT sector are positive. This chapter contains an interview with Ronald Walcott, CEO, Telecommunication Services of Trinidad and Tobago.
Explore chapterTransport & Logistics
While some areas of transport and logistics have experienced a decline in performance in recent years due to overall sluggish economic performance, a projected turnaround in 2018 will likely have a positive impact on the industry. However, from port and airport, to road construction projects and upgrades, there still is a way to go to bring Trinidad and Tobago’s infrastructure up to speed with economic demands. Beyond financing new projects, finding ways to improve productivity and competitiveness by streamlining processes and modernising systems will be essential to elevate the sector and enable it to better contribute to the country’s diversification strategy, as well as boost overall economic growth. This chapter contains an interview with Garvin Medera, CEO, Caribbean Airlines Limited.
Explore chapterTourism
T&T remains one of the least developed destinations in the Caribbean. Although tourism has not historically been a priority for the government, increased pressure to diversify away from oil and gas has made tourism a viable development alternative. Higher oil prices in 2018 could provide the country with much-needed revenues to amplify diversification efforts. Meanwhile, ongoing efforts to expand source markets and establish a policy framework and regulatory authority bode well for the sector, especially as global tourism is set to continue rising over the next decade. With a unique and diverse cultural heritage and strategic setting outside of the hurricane belt, T&T has the opportunity to move its tourism offerings forward. This chapter features an interview with Janelle Commissiong, Chairman, Tourism Trinidad Destination Management Company.
Explore chapterHealth and Education
In a show of commitment to the well-being of citizens, the government allocated TT$6.03bn ($894.4m) to the health sector in the FY 2018 budget, placing it in the top-three publicly funded areas of the economy behind education and national security. While this figure represents a decline from FY 2017, when the allocation was TT$6.25bn ($927m), health funding has risen since 2010. Meanwhile, the human capital requirements of globalisation and the information age are placing great demands on economic and educational structures in Trinidad and Tobago. The government therefore confirmed its commitment to developing a knowledge-based economy with a TT$7.3bn ($1.1bn) allocation for education and training in the FY 2018 budget, which was the largest of any sector. The contribution of education to GDP in 2017 is estimated at 2.7%, which is marginally higher than the 2016 figure of 2.6%. This chapter contains an interview with David Dulal-Whiteaway, CEO, Arthur Lok Jack Graduate School of Business.
Explore chapterAgriculture
The economic recession in recent years has forced the government to closely examine its consumption of foreign goods, and to prioritise domestic production and self-sustainability. The push towards wider economic diversification has highlighted agriculture as a potential sector for transformation. While the state has shown a commitment to change, Trinidad and Tobago still has room for improvement as it continues its journey towards increased food security. To ensure food security and sustainability, T&T must invest in initiatives that will build out its agricultural capabilities and place the local food system on a solid foundation that values both staple and export crops. Planned rehabilitation efforts can only be successful if the government and private investors alike continue showing commitment to and interest in the rehabilitation of the sector. This chapter includes an interview with Joe Pires, Managing Director, Caribbean Chemicals and Agencies.
Explore chapterTax
In conjunction with PwC, OBG explores Trinidad and Tobago’s taxation system, examining a wide range of areas of special interest to international investors, such as income and corporate tax, petroleum profit tax, withholding tax, VAT and customs tax, among others. This chapter features a viewpoint with Brian Hackett, Territory Senior Partner, PwC Trinidad and Tobago.
Explore chapterThe Guide
This chapter contains information on hotels, government agencies and other listings, as well as useful tips for visitors on a range of topics such as visa requirements, currency and transportation, among others.
Explore chapterTable of Contents
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