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The following represents a couple general points on how to approach an investment in bonds. These can be transposed to other asset classes and also provide the basic guidance for constructing an investment portfolio. The reference to bonds is due to this being topical at this time.
INVESTMENT LESSON #1
An investment is neither good nor bad
No investment on its own should be viewed as a good or a bad investment.
Yet this is the most frequent question that is asked of a financial professional.
If you take the riskiest investment and put it alongside the safest investment then the portfolio as a whole is going to be less risky than the risky investment alone. Everyone should be able to grasp this.
The US dollar is the reserve currency of the world and bonds issued by the US Government is considered to be one of the safest investments in the world.
If you invest 100 per cent of your money in US government bonds then you would own the safest investment in terms of getting the contractual obligations of the investment satisfied.
You are as certain as can be that your interest payments will be paid on time and at the stipulated amount and that your principal invested would be returned to you under the repayment terms agreed at the time of the investment.
Let’s say that bonds from the Government of Iraq sits at the other end of the scale.
A war-torn country that does not have a stable government and where there are so many other variables to consider.
You will appreciate that investing in Government of Iraq bonds would be a scary thing to do. The risk of not getting your money back is high.
However, as I will explain the Iraq bond can serve a useful purpose in a portfolio if used properly.
Let us for the sake of argument assume that a 10-year bond issued by the US Central Bank (The US Federal Reserve) pays interest at three per cent.
That may be a low rate of return on money invested for 10 years. You are trading off safety (low risk) for a low return (three per cent).
Appreciate that you can’t force the US to pay you more interest, that is determined by the market.
As a segue also appreciate that you can’t force banks to pay you a higher deposit rate.
This is also a function of the market and the levels of liquidity.
It is the monetary and fiscal authorities that are responsible for the level of liquidity in the financial system and bank deposit rates are primarily the result of their cumulative and collective actions over the past two decades.
Returning to the investment lesson. Since you can’t force the safe investment to pay a higher rate then you have to adjust your portfolio in order to achieve a higher return.
This also means taking on higher risk. This is where the Iraq bond, even though it is very risky may have value to you as an investor.
Let’s say that the 10-year Iraq bond pays interest at 15 per cent. That higher rate of interest is a reflection of the level of risk that is associated with investing in Iraq for ten years.
The high rate of return on offer is your compensation and incentive to take up the higher-risk investment.
Understanding Lesson 1 brings with it a realisation that no investment on its own is good or bad.
You need to recognise how that investment fits within your portfolio and whether it has any attributes that can serve your investment needs.
In this example the higher risk bond will provide a potentially higher return and the risk can be made acceptable if it is combined with the safe asset.
INVESTMENT LESSON #2
How much you invest is more important than where you invest
If you accept that you can combine a safe asset with a risky asset to manage the overall risk in your portfolio then the next stage is to determine how much money you should allocate to each investment.
Typically I am faced with the question: I have some money where should I invest it?
We tend to focus on the where rather than the how much. From my experience the reason this is so is because we usually approach things from an “all or nothing” perspective.
To move away from that mindset refer to Lesson 1 above. To reiterate, it is about how assets are combined as opposed to the individual assets in and of themselves.
If you avoid the “all or nothing” trap then you are faced with the “how much is enough” dilemma.
In the US and Iraq bond example, if you put all your money into an Iraq bond you run the risk of not being paid because of all the challenges associated with that country so, in simple terms, you can lose all your money. That’s not a good place to be in.
There is also risk in being fully invested into the US government bond. That risk is the low return due to the fact that it is a safe asset.
The risk here is not the financial safety associated with the asset but the risk is related to your financial safety.
You would invest because you are seeking to defer spending today in order to be able to spend at a future date.
If your investment does not grow at a rate that will allow you to increase your consumption in the future then you would be worse off having invested.
So asset safety also has a risk and that risk is that you may not achieve your financial goals with the safe investment.
The secret therefore is to take a level of risk that you are comfortable with. From Lesson #1 you can fine-tune your comfort levels by determining how much you would like to invest in each asset.
Being 100 per cent in the US bond for 10 years gives you a return of three per cent. Being 100 per cent invested in the Iraq bond for 10 years gives a return of 15 per cent.
If you adjust the percentages so that you own some of both bonds you can generate a return greater than three per cent but less than 15 per cent.
If you invest in both hypothetical bonds at the same time and they have the same maturity then at a ratio of 50 per cent in each bond you get the opportunity for a higher percent return with basically 50 per cent of your funds at risk.
Appreciate that here your worst case scenario is the Iraq bond defaults and you lose 50 per cent of your portfolio.
If you are unwilling to put 50 percent of your money at risk then you simply decrease allocation to the Iraq bond.
The smaller the amount at risk the closer you get to a 3 percent return. The reverse is also true in that the greater the amount at risk the closer you get to a 15 percent return.
If you are prepared to put 10 per cent of your portfolio at risk in the Iraq bond and 90 per cent in the safe US bond then you will get a return above three per cent but only have 10 per cent of your money at risk.
This is where a risky asset in an investment portfolio can be of value.
In summary the issue is not about anyone and anything else other than determining what you want to accomplish and how you plan to get there. No investment on its own is good or bad. How you fit together your investment portfolio makes all the difference.
If you are interested in investing in bonds then be sure to read the prospectus, understand the risk factors and then determine how much risk you are prepared to take to benefit from the returns on offer. There is no one size fits all position so ensure that you discuss the matter with a financial professional.
Ian Narine can be contacted at
Did BHP Billiton make a discovery in its latest deepwater well, Victoria 1, which was recently drilled off the east coast?
Well-placed sources confirmed that hydrocarbons were found but there is no word on whether it was in commercial quantities, whether it was oil or gas, or a mixture of both.
The well was drilled in Block TTDAA 5, the same block where BHP announced it had discovered 5 trillion cubic feet of natural gas. It is also the block that Prime Minister Dr Keith Rowley said Government is trying to get BHP to develop as quickly as possible to alleviate the natural gas shortage that has plagued the country for more than six years.
Unlike the first well in which the company drilled to 20,000 feet below the surface, this well is less than 10,000 feet. It encountered gas bearing sands and is likely successful. However, because the well is considered a “tight hole”, information is being kept among a few individuals.
Under their production sharing contract the country should know within the next month whether the latest deepwater well drilled by BHP Billiton was a success because they will have to report the outcome to the Ministry of Energy and Energy industries.
BHP was asked the following questions:
• Can you say whether the target depth (TD) was reached?
• What was that TD?
• How many feet of water was the well was drilled in?
• Did the well encounter hydrocarbons?
• Our understanding is that a discovery was made. Was it oil, gas, or both?
• How many feet of pay were encountered?
The company responded via email saying it was not in a position to speak on the well at this stage.
“We have not yet published any information re: Victoria yet but I will let you know once we have more information. However, this will likely not be in time for your story,” a BHP spokesman said.
BHP’s deepwater drilling campaign is crucial to T&T’s future oil and gas production because it is believed to be the place where the country has the best chance of making the kinds of massive oil and gas discoveries seen in West Africa and Guyana.
BHP Billiton is the operator of all the deepwater blocks that have so far been awarded and has drilled three wells in deepwater, inclusive of Victoria 1. They have so far made a major natural gas discovery but the second well, which was drilled closer to Tobago, failed and there has been a lot of hope that more gas and possibly oil will be discovered on the same block where the Le Clerc well was drilled and natural gas found.
A confidential document produced by the Ministry of Energy alluded to the importance of the BHP drilling campaign.
The document stated: “Three deepwater exploration wells are forecast to be drilled in 2018-2019. Two of these wells are to be drilled in Block TTDAA 5 to test the Magellan Gas Play which was discovered via Le Clerc-1 exploration well in 2016. The other well is to be drilled within Block TTDAA 14 to explore for hydrocarbons at various levels based on subsurface data.”
The Magellan Gas Play was the name given to the sands by BHP because it is the first time it was seen in T&T.
BHP is the operator of TTDAA 5 with Royal Dutch Shell as its partner and in Block TTDAA 14 it is the operator with bpTT as its partner.
Technology drives a new initiative to improve the services provided by the Town and Country Planning Division (TCPD).
The project, which has already received public sector investment programme funding, places emphasis on automation, digitisation and service delivery. A pilot project has been implemented at the TCPD’s south regional office and there are plans to introduce it at other offices shortly.
The TCPD project was developed by three public servants—Marie Hinds from the Ministry of Planning, Sharon Bailey from WASA and Giselle Lall from TSTT—all graduates with distinctions from the Masters of Institutional Innovation and Effectiveness programme at the Arthur Lok Jack Global School of Business (ALJGSB).
The trio also won the award for Excellence in Practicum (solution/intervention) and they had the opportunity to present their project to business leaders during a recent Flow if Impact event at the ALJGSB’s north campus in Mount Hope.
The practicum is part of some masters programmes offered by ALJGSB. It runs for six months and is intended for students to integrate what they have learnt in the classroom and apply that knowledge to solve live problems at public and private institutions.
The other projects presented to the business leaders at the event included a housing project involving a public-private partnership between the Housing Development Corporation (HDC) and a private developer.
It featured a unique risk allocation arrangement that satisfied the needs of all stakeholders, and was designed to be achieved in milestones so cash flows can be initiated and risks reduced.
Other featured project included the creation of a radio station in Tobago, Pulse 89.5 FM, an export engine and a plastic recycling venture.
Business leaders weigh in
Gabriel Faria, CEO of the T&T Chamber, told the students they should ensure the projects they create add value to the particular company. He said while it is good to look at what it costs to produce a product and what it will earn, it is also important look at the value added.
“Part of my concern when I looked at your presentation is that it looks good but I am not clear where the value is, and what it is,” he said.
Faria said when manufacturers build production capacity often it is for a home market and therefore not as competitive in the international market.
What is clear, he said, is if the T&T economy is to be less dependent on oil and gas, manufacturers need to be more competitive internationally.
David Dulal-Whiteway, CEO of ALJGSB, said the projects presented real world situations and the students had been given guidance to bring them close to commercialisation.
Dulal-Whiteway, a former bank executive, said he always had the perception that after academic research is done, all that happens is that, “it gets thrown into a drawer.”
He said the practicum creates an avenue for the ALJGSB to make a difference in the country.
Other business leaders who assessed the students’ presentation included: Nicholas Jackman, head of business development, ANSA McAL Group; Winston Dookeran, UWI Professor of Practice; Derek Alan Noël Parker of the French Embassy in Port-of-Spain; and Debra Boyce, senior trade commissioner, High Commission of Canada to T&T.
Signature local products, ranging from Tobago’s spiced, savoury pone, addictive preservatives and succulent cassava and corn dumplings, were among the locally manufactured products featured at the recently concluded Trade and Investment Convention (TIC), that caught the interest of international buyers. Pepper sauce was also a hot item for foreign companies.
This was the second year that exporTT partnered with the T&T Manufacturer’s Association (TTMA) for an Inward Buyers’ Mission and there’s a real possibility that these and many other goods will be exported within the next six months.
Apart from food and beverages, including a wide array of condiments, international companies were also interested in paper and packaging items like toilet paper and tissues.
Through the TIC, exporTT has been working to stimulate awareness of T&T as an exporter of quality products, allowing local exporters to meet multiple international buyers in one location at a fraction of what that type of investment would cost and generate export orders.
With four years’ experience in hosting inward buyers’ missions, exporTT was able to attract ten international buyers from Canada, the United States, Cuba, Guyana and Martinique, who were screened and selected based on mutual trade interests with local exporters in the sectors of food and beverage, printing and packaging, construction and chemicals.
At business to business (B2B) meetings, participants discussed trade opportunities that will redound to the benefit of T&T, said manager, export promotion and communications at exporTT, Betty Ann Noreiga-Mollineau.
She declared TIC 2018 a success, opening up much needed avenues to generate foreign exchange and propelling small and medium-sized enterprises (SMEs) on to the international market.
Noreiga-Mollineau said exporTT facilitated more than 125 B2B meetings between foreign buyers and 58 local exporters.
“Some buyers have already indicated there will be commercial projects they will be undertaking. There are a number of people who got new lines and want to introduce it in their countries,” she said.
Trade relations are also expected to be strengthen between T&T and Guyana as one particular local manufacturer is seeking to have his products more widely distributed in that country.
Noreiga-Mollineau said another focus of the event was penetrating mainstream markets via different diaspora.
“All our diaspora markets are well covered because people look for their products on those markets. Our main focus was the mainstream through the diaspora markets,” she explained.
“We are also building on the experiences of our exporters who have already expressed an interest in returning.”
Shamilia Khan, business adviser at exporTT, said TIC was structured in a way that provided opportunities for SMEs to showcase their products both to international and local buyers.
She said: “These companies experienced what an international trade show was like. We had smaller companies who met buyers interested in their products.
“Some of those who exhibited were export ready. They were able to display their products on the business-to-business days which were Thursday and Friday.
“We had smaller cottage industry companies and they exhibited on the Saturday and Sunday and they were also exposed to international buyers and the general public. This was an opportunity to bring awareness of who are our exporters, products and opportunities to find distributors from the internationally market.”
Khan said exporters were very satisfied that the TIC met their objectives as they were able to gather leads from international distributors and are currently in the negotiations.
Another positive outcome was the networking opportunities provided, especially for smaller companies.
“There were many companies willing to share experiences and contacts with each other. There were a lot of people asking how can your product complement mine and how we can work together, for instance,” Khan said.
What made TIC 2018 different from previous years was that a sector approach was used.
Khan explained: “Because export promotion deals with several sectors—printing and packaging, construction, food and beverage, household and industrial chemicals—we decided we would have a variety of companies to give them opportunities for display.
“For the smaller companies, we worked on improving their standards to get them export ready for the international market. The smaller entities, mostly from Tobago, had food and a variety of drinks like rum punches, local teas, which highlighted health benefits and body creams which created great interest.”
Khan said the buyers were also impressed with our companies, including a small entity that offered various candles with fragrances are comparable to the popular foreign candles. Bottled tomato relish also caught the attention of some buyers.
“There was also Tropi-Mulch showcasing mulch in different colours, promoted by a small company; the interest generated was tremendous.
“These companies welcomed exporTT’s guidance to assist in growth and development and to tailor their products for the international market. What you sell on the local market is actually different on international arena. We were also amazed by the steady flow traffic at the booths,” Khan said.
Connecting with Canada
Roann David, business adviser, export promotions, at exporTT, brought in Grace Foods, Canada, a first time buyer at the event.
She said: “We invited Canada in the past but this is the first time they accepted.”
David said the company is seeking local brands for the Canadian market, particularly products which have some affinity with the diaspora.
“We are looking to increase trade with the diaspora and through this we can also reach the mainstream. This may not materialise overnight but it will eventually happen,” she said.
David said the Canadian buyer took back sample products which interested him to relevant persons for decision making.
“This will assist in preparation for the Canada trade mission exporTT is having this October because we will then know who the major players are in Canada.
“And based on interest generated we will then set-up follow up meetings with local manufacturers. In addition that buyer can also make recommendations for other local distributors,” she said.
The Grace Foods representative was especially interested in local non-alcoholic beverages like soft drinks and juices, as well as preserves.
“He was also very interested in some of our spices and condiments. These companies might not be the most well known but their products are very much synonymous with T&T and that’s what the buyer is looking for, again starting with the diaspora and to break into that mainstream aspect,” David emphasised.
Due to time constraints, the buyer was unable to fully explore all that TIC had to offer.
“Because it was just two days of business meetings, the buyer realised he probably should have stayed a bit longer. He did not have a full opportunity to walk the show and see all the other products. He just had to snatch time in between,” David said.
“The business meetings were set up to match him with the items he was interested in but the opportunity to walk the show could have provided a wider scope. He could have seen other products he probably could try to get into Canada as well.”
Some of the specifications this buyer insisted on for local goods entering Canada included proper labelling and ensuring items meet required export standards.
“We directed some local companies to the relevant bodies in Canada, like the trade office, which provides all the linkages to the other authorities like the Food Inspectorate.
“Not all the companies who came to the meeting were aware of the packaging and labelling laws for Canada and by providing these linkages it increased the knowledge of T&T’s companies,” David said.
This is beneficial to the country on the whole in ensuring all goods produced are of the highest international standards, she added.
If all goes well, more local goods could be on Canada’s supermarket shelves by the end of the year. While that might be a relatively short period for some companies who produce on a smaller scale, there is the option of consolidated shipments.
In this regard, exporTT plays a key role in facilitating cargo consolidation through product combination.
Gift and craft markets a hit
First time buyer from Martinique is interested in a range of products, including food and beverages, construction materials and chemicals. That buyer was also impressed with the work of a local gift and craft designer who creates copperware, including customised pieces, said exporTT’s senior business adviser, Natalie Paul-Harry.
“Gift and craft is one of the smaller sectors which falls under the creative industry. The buyer will be liaising with the gift and craft designer in the short and medium term,” she added.
Noting that exporTT is targeting buyers worldwide, Paul-Harry explained that Martinique provides optimum advantages as it is part of France.
“It’s essentially targeting Europe. We are seeking to use the French Caribbean as a launching pad to enter continental Europe. It’s ensuring we meet the quality standards for those markets and targeting this as a microcosm of the wider continental European market,” she explained.
One advantage of hosting an inward buyers market, she explained, as opposed to taking companies abroad, is cost effectiveness.
“It’s very expensive for local companies to participate given the high cost of airfare and accommodation. In this way we are facilitating them on the ground to meet a range of exporters.
“Our mandate is to diversify, to move away from oil and gas, and we are providing a platform to meet with buyers which they might not have had given financial constraints. There is also foreign exchange benefit by increasing exports via this intervention,” she said.
Chemicals, printing and packaging
T&T’s chemical sector covers a range of products, including dishwashing liquid and household bleach, all of which have resulted in viable inroads with buyers, said senior export officer Camille James.
Chemtrax Ltd, for instance, showcased a range of household cleaners such as disinfectants.
Regarding new buyers she explained: “All of them were new to us in terms of the countries they came from: Cuba, Martinique, Guyana and New York.”
Nathali Richards, who was responsible for the printing and packaging sector, said there were four buyers from Cuba.
Factory visits generated great interest and there were also tours to companies in the Point Lisas area, she added.
“We did factory visits to John Dickinson and to Caribbean Safety Products. They were not only really good hosts but profiled their companies efficiently. Buyers were impressed with the manufacturing aspect in particular.
“Regarding construction, there was interest in companies like Lifetime Roofing,” Richards added.
Local paper products, she noted, definitely have a viable market in Cuba.
The work of exporTT is far from over.
Noreiga-Mollineau said the organisation will be hosting virtual missions—conferences via the Internet—to cement ties and provide avenues for exporters who were unable to meet buyers.
“We have contacts with our exporters and prospective buyers. If, for some reason, there is no response then it’s my duty to help you get to that exporter.
“While walking around at TIC I made contact with some of our local exporters who were in booths but were not linked with us. I will be bringing them in to meet with some of the buyers who were invited.
Definitely there will be some virtual missions after the TIC,” she said.
T&T is now well into the fourth year of a foreign exchange shortage that has not only imposed severe spending restrictions on the average citizen, but has given rise to a black market which, if left unchecked, will be a real threat to our long-term economic stability.
Our forex troubles are directly linked to the steep drop in energy prices, starting in 2016, which struck directly at our main source of revenue. Remember, we get about 80 per cent of our national income from oil and gas. The resulting economic downturn, from which the country is only just beginning to emerge, brought on some painful cutbacks and adjustments, not the least of which has been curbing the national appetite for foreign fare.
We are now at the time of the year when the effects of the forex shortages are laid bare, as citizens scramble to accumulate enough currency for travel abroad, for tuition fees and for other transactions that cannot be completed using TT dollars.
However, even on an average day, some grim reminder can crop up of the forex crisis that has been with us for too long. Some items are either in short supply, or not available at all, due to difficulties being experienced by importers and retailers to secure sufficient foreign currency. Some, unable to pay overseas creditors, have been forced to scale back or shut down their operations.
Lucky for us that the situation of bare supermarket shelves has not become a reality here. That threat is never far away, however, because this country is still vulnerable to external threats and, even with the latest favourable IMF projections for a return to economic growth, we are still an energy dependent economic, subject to the volatility of that commodity.
The challenge we need to overcome is sliding into a situation of tight currency controls that make it extremely difficult for citizens to buy foreign currencies with our TT dollars at the official exchange rate. To some extent, that is already happening through an emerging forex black market, with US currency in particular priced at a significant premium because of the prevailing demand-supply imbalance.
If that situation is allowed to slip any further out of control, we could end up like our nearby South American neighbour, Venezuela, where currency controls have made it almost impossible for residents to purchase foreign currencies— just one source of pain in the economic, political and social turmoil gripping that nation.
The thing with forex instability is that it is not just a simple matter of buying and selling, or having to curb demand for some imported items and services. The repercussions are far more severe than that.
Late last year, United States chargé d’affaires John McIntyre warned that this country’s persistent foreign exchange shortage is an impediment to investment.
It is a fact that foreign investors seek out stable countries with strong economic performance in which to invest their capital, so T&T is at high risk of losing out if the current situation is not fixed.
Of course, we have been down this road before. The last time T&T experienced a major economic and financial crisis was in the second half of the 1980s following a slump in energy prices—as is the case now.
Back then, efforts to address acute balance of payments and debt servicing challenges included introduction of a dual exchange rate and exchange control systems to curtail foreign exchange outflows.
An EC zero system was implemented. This strict foreign exchange budgeting allowed authorised importers to access foreign currency allocations on a quarterly basis.
For the average citizen, the result was the pain of a bureaucratic system for securing currency for travel and other foreign transactions, including enduring long lines at the Central Bank during times of peak demand.
These controls were not effective however, and since then there have been efforts to liberalise the financial system.
One of the most significant developments came about in April 1993 when T&T adopted a floating exchange regime, so the TT dollar appreciates or depreciates in response to changes in supply and demand conditions in the forex market.
There are now suggestions in some quarters that the TT dollar may currently be overvalued.
Some have even hinted that the true exchange rate should be TT$13 to US$1, while others warn of dire consequences should this country go the route of currency devaluation.
The Central Bank, which is responsible for managing the forex market, has the authority to intervene in the event of undue volatility in the exchange rate and in the current situation of foreign currency shortages, has actually allowed the TT dollar to slowly depreciate.
In fact, the local currency has it has declined by approximately seven per cent against the US dollar since mid-2016. With the current shortages, particularly in US dollars which are usually in high demand, black market transactions have become more common. So it is time to bring the situation under control.
But, to date, there have been no clear signals from the Government on what action will be taken to address the situation.
When he presented the 2018 Budget, Minister of Finance Colm Imbert said: “The exchange rate will move more in step with demand and supply and the availability of foreign exchange.”
That statement is open to all kinds of interpretations. Could it be that a free-floating foreign exchange rate might be in T&T’s immediate future?
Of course, there is also the undesirable option of a devaluation which has been recommended by some local economists. However, that measure can be politically expensive since a devalued currency rarely returns to its original value and there will be some major economic pain involved. There was a time, believe it or not, when the TT dollar traded at $2.42 to US$1. The chances of the currency regaining that strength are almost nil.
In any case, I don’t believe the citizenry has the appetite to swallow any more tough economic pills. Instead, what T&T should be aiming for is the kind of economic activity, particularly in the nonoil sector, that will substantially increase foreign currency inflows and keep the exchange rate stable.
We need to get to the place of stability and economic growth where T&T becomes attractive enough to draw the investment funds needed for long-term prosperity.
The D word that needs to come into play is diversification, not devaluation. That is key for the economic revitalisation and transformation T&T urgently needs at this stage in the nation’s development.
We need to aim for the economy to become more open, for our foreign exchange reserves to increase and for a return of confidence in the domestic currency sufficient to shut down the black market and meet commercial and other demands.
Will some forex remedy be part of the fiscal package to be presented in September? It should be.
I wait to see how Mr Imbert will address our persistent forex problem.
The Caribbean Export Development Agency (Caribbean Export) in collaboration with the European Union officially launched their market intelligence portal, known as CE-Intelligence.
At the media launch held at the newly renovated Warrens Great House last Tuesday, executive director Pamela Coke-Hamilton outlined the importance of the CE-Intelligence portal for private sector firms looking to grow their businesses through exporting to new markets.
“Trade, business intelligence and market research are key for the successful entry into export markets,” explained Coke-Hamilton. The portal will enable firms to “develop their own customised reports to learn more about market entry requirements in any given country, important trade data, and key business contacts” she added.
Head of Co-operation at the Delegation of the European Union to Barbados, Eastern Caribbean States, OECS and Caricom/Cariforum Luis Maia highlighted that market intelligence is an indispensable commodity in today’s technology driven environment. Further the portal will complement the EU’s Trade Helpdesk to enhance the business opportunities of those looking to penetrate the EU markets.
The CE-Intelligence portal was conceptualised to assist firms in being more strategic in their market entry plans as it provides an easily accessible platform for the region’s small and medium size enterprises (SMEs) and business support organisations (BSOs) to access accurate and high-quality data free of charge, which reduces the cost, time and effort required to make strategic business decisions.
The question as to why many businesses did not make that move to export was raised by Minister Sandra Husbands in her keynote. Charging that a cultural fear of the unknown was often a reason for businesses not venturing in to export, Husbands congratulated the agency for providing a much-needed tool that will make it easier for firms to move out of their comfort zones to explore export markets and benefit from the economies of scale that are synonymous with larger markets.
Husbands called on entrepreneurs to make it second nature to include export as part of their business plans in view of the small market typical of small islands.
The Arima Velodrome was transformed into a street fair for the Inter-American Development Bank’s (IDB) Cheer Fair which featured over 14 collaborators and exhibitors covering six areas: health, education, water and sanitation, housing, gender and climate change. The theme, Fostering Human Development, was explored with fun, interactive activities, displays and exhibitions for all ages.
“The Cheer Fair was part of the IDB’s “Unfollow: Same Never Made a Difference” campaign which was launched in November 2017 and seeks to reach the wider public in a meaningful and active way, highlighting the need to be different while promoting change, collaboration, creativity and innovation from all sectors of society,” said Rocio Medina Bolivar, IDB’s country representative.
IDB’s Unfollow campaign has five components. The Cheer Fair was the second of three Pillar Events.
Also, highlighted, at the Cheer Fair, was the Unfollow Box, a state-of-the-art mobile video recording booth that invites people to share their thoughts, ideas and solutions in response to questions related to the development and future of T&T.
“The Cheer Fair and Unfollow Box gave people a chance to be part of IDB’s movement to drive positive change,” added Medina Bolivar.
Consumers today are more connected and empowered than they’ve ever been, and it means that even here in the Caribbean, businesses must radically evolve the way that they engage, sell and market to their customers.
The Telecommunications Authority of T&T’s (TATT) Annual Market report 2016, showed that mobile penetration across our population of 1.3 million stood at 160 per cent, with over 700,000 mobile internet subscriptions.
Sales and marketing against this backdrop is tough, mainly because marketers must engage connected consumers who have access to more information than ever, making them both empowered, and overloaded. In addition to customers engaging businesses far later in the purchase decision journey, research shows that consumers overwhelmingly trust their peers and online reviews more than advertising.
In my over ten years as part of a digital agency, I’ve seen a lot of evolution in the approaches to marketing taken by local businesses. Sales and marketing leaders have become more and more adept at utilising digital in their marketing and engagement of customers, but we’re now at a turning point. The next wave of marketing that will have impact in the Caribbean is the imperative to seamlessly integrate marketing.
That assessment has led me in my own agency to transform from being focused on helping marketers harness digital to reach, engage and sell to customers, to a broader focus on integrated marketing. With web, mobile and Internet technology here to stay, consumers move easily between the online and offline worlds and except brands to do the same.
That core insight has led me as an agency owner to also seek to evolve from a digital-only focus to a more expansive integrated marketing focus at the newly branded Caribbean Ideas, Synapse, because regional leaders need more and more help adapting to this change in customer behaviour.
Caribbean sales and marketing leaders are working to engage a variety of consumers through the entire consumer product lifecycle, and increasingly struggle with the mix of content creation, storytelling and cross-channel marketing that is most effective.
Many feel forced to compromise, choosing between agency partners that may be good at digital or traditional marketing but not both. Some hire separate agencies for the subject-matter expertise, but because of a lack of experience in managing multiple partners, they struggle to get truly integrated results. Others take a different path, choosing the simplicity of working with one partner, but accepting that they are losing out on expertise in one area or another, leading to a different disconnect.
The reality is that true marketing success is impossible to achieve without consistent, connected experiences that consumers can see, feel and engage with across multiple platforms and channels. Creating the type of powerful campaign that achieves this requires significant skill at both left-brain marketing that relies heavily on strategy and data, and right-brain marketing that is personified by brilliant creative design.
For us at Synapse, marketing is about integration and storytelling in service of key business goals. Our focus is on helping modern marketers who need to tell compelling, connected stories to today’s consumer wherever they consume media, and wherever they are in the buying cycle.
Our philosophy, is that the future of Caribbean marketing is about putting together left brain and right brain marketing, combining analytics and data with creativity and storytelling to achieve success and show ROI. Our belief in this future led us to evolve from our pure play digital history to the integrated marketing agency that is now Synapse, where helping marketers excel at delivering storytelling, messages and experiences cross-channel is our focus.
These approaches can be immensely powerful, as we observed in recent work with Republic Bank. As collaborative partners, we were both inspired to change the conversation on and offline in T&T from many negative things—crime, unemployment and corruption—to one that reminds all of us that there are pockets of positivity around us. As a financial institution, attempting a campaign that was more focused on storytelling than disruption advertising was a departure, particularly in the typically busy Christmas period where product marketing is usually top focus.
The resulting #BetheOne campaign focused on promoting the things we can all do to make life better for ourselves and others, showcasing foundations, people and scenarios where good was being done in the market. With a heavy focus on storytelling in digital and other channels, this campaign has already crossed the 1 million video views mark and counting.
It has also gone on to win two Silver Addy’s for Social Media Campaign and Social Media Single Execution at the Caribbean Addy awards, a prestigious award that recognises excellence in advertising and creative industry standards.
The campaign and resulting win reinforced that great content and storytelling are essential parts of modern marketing, but they are also just one component. Mastery of integrated marketing will challenge Caribbean marketers to excel in the ways that they communicate, track and measure success and tailor marketing efforts to the media consumption habits of different consumers.
We believe that while it’s never been harder to be a sales and marketing leader, there’s also more opportunity than ever before to develop deep, long-term customer relationships and brand advocates.
The future of marketing is integrated.
It’s often difficult to balance work and home and it can be particularly hard for the single parent who must juggle time carefully.
Finding services that are efficient, reliable and properly cater to the needs of children is difficult, if not daunting. How can these needs be tailored for working parents who often barely make the daycare’s pick-up on time?
Lenice Lewis-Patterson and business partner Judith Montague have founded Kidz Biz TT, this country’s first corporate daycare, located in bustling Port-of-Spain, to address those concerns and needs.
But what is corporate daycare?
Lewis-Patterson explained: “It’s a unique corporate sponsored childcare company that offers full-time, part-time and backup care services to employees.”
Lewis-Patterson, who can identify with the many challenges working parents face, explained how her own experiences inspired her to start the business.
“As a working mother of two I fully understand the needs of working parents. I know first-hand how challenging it is to balance work, family life and all else and I know finding the right childcare is incredibly important.
“The lack of accessible flexible and affordable childcare was an impediment to being both a devoted mom, wife and an employee. When my second son was born, I started to feel hopeless because I knew I had to find someone to care for him when I went back to work. To help ease that stress, I hired a stay-at-home nanny—an expensive and sometimes stressful process,” she said.
Her search for a proper childcare facility was a task in itself which led to even further frustration.
“I looked at the market and the availability of quality services and I realised a lot of moms were just like me—looking for the best way to care for their children without breaking the bank. I thought, there must be better options for working parents but guess what, there was none,” Lewis-Patterson said.
This very lack of suitable solutions presented a new, exciting business opportunity for Lewis-Patterson and Montague.
“It’s a terrific feeling to open your own business and even more rewarding that you can be of service to others, especially children,” Lewis-Patterson said.
How is Kidz Biz TT different from other daycares located across the country?
“We partner with companies to get sponsored childcare that offers full-time, part-time and back-up childcare services by offering flexible childcare as we cater to each family’s specific needs. We work with them to offer the best possible solutions.
“By partnering with Kidz Biz TT, employees have access to guaranteed full-time or flexible part-time care,” Lewis-Patterson explained.
The facility also offers perks such as webcam access, allowing parents the ability at any time view their children while at work or from anywhere in the world. Cameras are also strategically placed outside to monitor people entering the daycare.
“Doors are kept locked, even though we have burglar proof on all doors,” Lewis-Patterson said.
Given the hectic work schedules some parents face almost daily, Kidz Biz TT facilitates pick-ups from schools located close to the centre.
“A safe, nurturing and enriched learning environment for your child. We provide you with peace of mind, so you can feel good about going to work everyday and knowing your child is safe and secure and you don’t have to worry about having to leave work to pick-up. We take care of all of that.
“Advantages for parents: flexibility, guaranteed spots and peace of mind knowing that your child is taken care of and loved,” Lewis-Patterson said.
Even greater benefits will be reflected in the workplace, including less absenteeism and greater productivity.
Companies, Lewis-Patterson recommended, can offer these benefits as an incentive to enhance recruitment and retention packages for their employees and also use it as a public relations tool.
“Increasing numbers of employees are working parents and statistics show that employees with young children are the demographic most likely to require time away from work. The reason most often cited is issues with childcare.
“Family-friendly programmes can assist with some of the challenges in balancing work and family demands,” she said.
On assurances that selected employees fit every criteria, she said a vigorous screening process is used.
“Our employees are interviewed by my business partner and me and must present references, which we check. One of the interview questions is about how they would discipline a child and based on the answer we have a few follow up questions.
“Of course, these answers help determine who we hire. We also have cameras in all the rooms of the nursery, and we do random playbacks on various days,” Lewis-Patterson explained.
Prices have not yet been worked out for corporate packages but for walk-in parents fees range between is $250 and $1,500. The first centre is located at 30, Dundonald Street, Port-of-Spain.
For more information, email [email protected], or call 708-8299 or 689-9893.
Delivering a powerful address on the need to transform, NGC group chairman, Gerry C Brooks, shared an energy sector perspective, including a focus on NGC repositioning its business in the context of a changing regional and global ecosystem. Brooks was part of a distinguished panel of guests including Paula Gopee-Scoon, Minister of Trade and Industry, at a recent T&T Chamber Industry and Commerce Business Outlook breakfast meeting.
With a focus on energy and the economy the NGC Chairman emphasised that there are green shoots of growth in T&T’s economy underpinned by a rebound in the energy sector. That rebound is being propelled by increased production of natural gas which is projected to increase to 3.8bcf in 2018, 3.9bcf in 2019 and 4.05 bcf in 2020.
This enhanced production is being supported by improved pricing for ammonia, methanol and LNG from the nadir (lows) of 2016. This augers well for foreign direct investment (FDI) improvements, USD earnings, and a trickle-down effect through the economy. Increased income from the new royalty gas will also supplement both GDP ad US$ earnings in 2018 and beyond.
He emphasised that T&T businesses must remain disciplined and focused to ensure competitiveness and improved productivity. He urged businessmen to leverage unused capacity in their manufacturing plants to find new markets and to explore the several partial scope and bilateral treaties with Cuba, Dominican Republic, Guatemala and other territories to improve export sales and earnings, recommending that they capitalise on the recently created Exim facility and other recently created government initiatives.
Brooks provided a comprehensive economic review, noting that several important country indicators were poised to improve in 2018 with GDP expected to turn positive at around one per cent.
He attributed NGC’s improved profitability of 37 per cent over 2017 figures to a focus on cost containment, productivity and margin management, leadership and improved market pricing.
Referring to the transformative approach to its contract architecture and framework, Brooks reaffirmed that “a secure supply of gas is our main imperative as a domestic aggregator.” He noted that excellent progress has been made in increasing supply as well as on streamlining contract provisions, completing negotiations and resolving $4.7 billion in claims.
Brooks noted that the infrastructure capex spend of NGC in the next two years would exceed US$2 billion which will provide considerable commercial opportunity for the business sector.
Additionally, US$3 billion of foreign direct investment is under active consideration with a view to locating new plants at estates including Union Industrial Estate in La Brea.
“Dare to be transformative” was his call to action as he encouraged businesses to change their current business models and take bold, yet calculated risks necessary for transformative growth.
There have been many attempts to link World Cup football to various activities in a country.
From our local experience we know that taking time to watch World Cup matches has an effect on national productivity.
This, of course, is more pronounced in countries that are actually playing in the World Cup and the further into the World Cup a country goes the greater the distraction.
Other linkages have been made between the results of World Cup matches and incidences of domestic violence, alcohol consumption and attendance at work the day after a game. One of the more curious linkages has been the outcome of World Cup matches against the next day stock market returns.
The argument here is that the collective mood and emotions of investors have an impact on their trading pattern that then impact stock market returns. So, a team that wins a World Cup match will have stock market participants that are more upbeat and that mood will be reflected in their trading patterns.
One of the things to appreciate in these discussions is that it is very difficult to distinguish between a correlation and causation.
This is because the World Cup is a so infrequent and a team’s performance in each tournament is unique so it is very difficult to generate enough statistical data. Some of the linkages may be caused by the World Cup but others are simply correlated and could be chalked off as coincidence.
The World Cup match last week between Brazil and Belgium would surely have captured the imagination of local sports fans.
One interesting statistic is that Belgium had up to this point nine different goal scorers at the 2018 World Cup, excluding own goals. Only Italy and France in 2006 and 1982 respectively have ever had more in a single tournament, with the record being ten.
On the other side, prior to the quarter-final match up, Brazil’s Neymar had recorded 48 touches in the opposition penalty area which was, at the time, 16 more than any other player at the World Cup.
These two statistics can start a debate on whether Belgium won because they played more as a team and Brazil lost because of their reliance on Neymar. Recognise again that these linkages are correlated to the result but it takes a more in depth analysis to determine the cause of Brazil’s defeat and Belgium’s victory.
We can, however, take some lessons from the World Cup and some of its matches in terms of how we craft an investment portfolio.
Some World Cup teams rely on a couple of super stars, or one big star for their overall success.
In the example of Brazil, at least statistically, there was an overreliance on Neymar to get the ball into the opposition penalty area.
When a star player is on top of his game, the other players in the team seem to look good as well even if many of the players involved might be below average.
If you juxtapose this analogy into a stock portfolio you may find a portfolio with a big winner like, say, Apple and a number of other companies that are really below average but when they all come together the portfolio has still done reasonably well.
A portfolio constructed in this manner is likely to have a bit more randomness to its performance and return as it is heavily skewed based on the “star’s” performance of lack thereof.
There are other options to portfolio construction and it is useful to return to the football analogy to make the contrast. A bunch of average or seemingly below average players on a team can win matches.
We have seen this with the performance of a number of so called “under dog” teams at this World Cup. This occurs for one simple reason—football is first and foremost a team game.
So the super star player may really be a super star but the rest of his team has to string together a few passes before the ball can get to him and when it does he sometimes needs to pass to someone else for a goal to be scored.
One likely outcome of having the super star player is that most of the play is directed to or through that player. This makes it easier for the opposing team to anticipate what is likely to happen and so they can plan for these eventualities and manage the situation to their ultimate advantage.
The team of average players has an entirely different strategy.
They need to seek ways to link together that makes the whole greater than the sum of the parts.
This is also a fundamental theory of portfolio management. It is the reason why it is considered better to own a portfolio of stocks as opposed to placing your entire investment into one stock. You don’t bet on the performance of the “star” stock but you build a portfolio of stocks that in combination can produce a result that is less variable and more consistent.
Appreciating this dynamic is important in a world where we often chase after the big winner. A frequent question is “what is a good stock to own” as opposed to “how can I put together a stable team of stocks”.
A stable team is less exciting and in some cases may be outright boring but when it comes to your financial security it’s the result more than the excitement that matters.
Role of luck Compartmentalising is important in terms of knowing what you want to accomplish.
For a World Cup you can relish the allure of a star player and support a team on that basis. However when it comes to your money it is better to build a good team (portfolio) of average players what can produce reasonable and consistent results over time. For many Germany may be the team that best defines this portfolio objective.
Yet Germany also flopped at this World Cup.
Germany’s reality brings me to the final World Cup/investing lesson.
There is always an element of luck. Based on shots on goal you would have expected Germany to score far more goals than they actually did, that they didn’t show the importance of getting the correct mix in your portfolio. Growth stocks and dividend stocks are to a stock portfolio what attack and defence is to football. You need to have both working properly together in order to get the result that you are seeking.
Then at the end of it all do not underestimate the role that luck plays in success.
Last weekend’s quarter finals saw the winning team score two goals each. None of those winning teams had more than three shots on target. Overall the four winners scored eight goals from just ten shots. This is an amazingly high conversion rate. The four losers scored three goals from twenty one shots (Brazil was one from nine).
You would expect that in a knock out round the team that is behind would leave more room for the opposition to get better chances. Adjusting for when the scores were level, the four winners had three goals plus an own goal from four shots on target and twenty nine in total. The losers had one goal form four shots on target out of a total of 14 shots on goal.
The lesson is simple. Fortune favours the brave and there is always an element of luck in success.
For the investor that means that you position yourself so that you can remain invested through the up and down market cycles. If you are brave through the market cycle and try to maintain a balanced portfolio throughout then with a bit of luck you will achieve your objectives. Unlike a World Cup the investor’s game doesn’t end unless you decide to end it, so time is on your side.
Ian Narine can be contacted at
Insurance complaints continued to dominate grievances against local financial institutions, the majority of which are motor-related claims. These are among the findings in the 2017 report of the Office of the Financial Services Ombudsman (OFSO) for the period January 1, 2017 to December 31, 2017.
The report includes a statistical review of the number and types of complaints processed, the time frames within which complaints were resolved and enquires received at the Office. It also highlights the number of persons visiting its offices at San Fernando, Sangre Grande, Point Fortin and Tobago.
The total number of complaints received for 2017 was 302, compared to 203 for 2016. Insurance complaints account for just over 93 per cent of the total received for the year.
“The significant increase in total complaints can be attributed almost entirely to insurance complaints,” the OFSO said.
Banking sector complaints remained characteristically low, with just 20 received in 2017— seven per cent of the total complaints—an increase from the 15 recorded in 2016.
“The increase in complaints is partly a reflection of greater public awareness and increased vigilance among financial customers,” the report stated.
The OFSO also recorded 770 enquiries in 2017, a marginal increase over 764 in 2016. These were received from various sources and were related to products and services provided by insurance companies, banks and non-bank financial institutions.
The OFSO received several enquiries about products and services provided by institutions not falling under its mandate, including the Unit Trust Corporation, credit unions and government ministries and agencies. In such instances, customers were either provided with an appropriate response to their enquiries or redirected to the relevant institutions where their matters might be addressed.
The OFSO continues to hold external office days and on those occasions 225 people visited as compared to 234 during the corresponding period in 2016.
According to Central Bank Governor Dr Alvin Hilaire, the OFSO serves as an important vanguard to the public by providing a means through which ordinary citizens and small businesses can seek mediation and redress arising out of complaints against financial institutions.
“Fundamental to every well-functioning financial system is a mechanism for recourse for the public in instances where disputes with financial services providers arise. Consumer protection, fairness and reasonable resolution remain at the core of the OFSO’s operations,” he said.
At the heart of consumer empowerment, he added, is awareness of financial products, risk, choices, rights and responsibilities. In this regard, the OFSO continues to work closely with the National Financial Literacy Programme (NFLP) to raise the level of financial education in the country and to empower citizens to make more informed financial decisions.
Financial Services Ombudsman Dominic Stoddard said the agency has accomplished a major milestone as it has been in existence for 15 years.
“It gives pause for reflection on its purpose and mandate and allows for an assessment of whether these are still valid in the light of the many changes that would have taken place in the financial sector over the years,” Stoddard said.
While the OFSO continues to play a pivotal role in the financial sector, there is still much to be done, he admitted.
“The scheme is still voluntary and not grounded in legislation. Many of the complaints received fall outside of our terms of reference and there are financial consumers whose complaints we cannot address because the institutions involved are not part of the scheme.
“In such cases, the customers are at a distinct disadvantage even where the institution in question has an internal complaints mechanism,” he said.
Despite these challenges, the OFSO continued to streamline its internal operations during 2017 by transforming its case management system.
Beta testing of the system was completed and the OFSO is now positioned to improve the level of its reporting, with an expanded range of reports and the availability of additional detailed data.
During 2017, 22 banking complaints were addressed by the OFSO. This included two unresolved complaints brought forward from 2016 and 20 new complaints received during the reporting period.
Of those, 11 complaints were resolved by the OFSO during 2017—50 per cent of the total for processing.
In 2016, 90 per cent of all pending complaints were resolved. There were 11 unresolved complaints that continued to engage the attention of the OFSO and the relevant commercial banks at the end of 2017.
The OFSO recorded the majority of banking complaints under the four main categories: accounts and transactions, card services, loans and credit and other.
Complaints related to accounts and transactions accounted for 50 per cent of the total received in 2017, compared to 40 per cent in 2016.
“There was also an increase in the percentage of complaints related to card services in 2017 compared to the same period in 2016. Three complaints related to loans and credit were recorded in 2017, the same was recorded in 2016,” the report said.
The majority of banking complaints were resolved by agreement between the parties involved and withdrawals by complainants due to corrective action by the financial institutions.
During 2017, seven complaints were resolved under the category of agreement, while four were resolved under the category of withdrawals by complainants.
Between January to December 2017, the OFSO received 28 new complaints from customers against insurance companies. For the corresponding period of 2016, the number of new complaints was 188.
This represented a significant increase of 50 per cent in the overall number of complaints submitted to the OFSO.
The majority of complaints were motor related claims. The OFSO recorded 266 such complaints which accounted for 94 per cent of the total number received.
There were 13 complaints related to life or health Insurance policies and individual annuity contracts.
Categories of complaints
The OFSO has seen a marginal increase in the number of complaints about denial of claim, while complaints about inadequate settlement were virtually unchanged compared to the previous year.
One of the major issues affecting customers continues to be the amount offered for settlement of claims. This accounted for 38 per cent of the total number of complaints received.
There was also an increase in denial of claims which now accounts for 37 per cent.
The single largest decline in terms of category of complaints was in undue delays, an indication that once liability is established there is an improvement in the time taken to settle outstanding claims.
Resolution of complaints
There were 345 complaints available for processing. This included 63 unresolved complaints brought forward from 2016 and 282 new complaints .
The OFSO resolved 235 complaints which represented 68 per cent of the total for processing—a decrease compared with 2016 when 77 per cent of the complaints available for processing were resolved.
There were 110 unresolved complaints at the end of 2017. The majority were resolved by agreement and withdrawals by the OFSO.
Withdrawals included matters where the insurance companies maintained their denial of claims, complainants breached terms of their policies, or complainants or third parties chose to pursue legal action.
During 2017, 72 per cent of complaints were resolved under the category of agreement and 25 per cent were withdrawals by the OFSO. Three per cent of all complaints lodged were closed under the category of withdrawals by complainants.
The OFSO recorded similar statistics under these categories in 2016.
The OFSO resolved 123 complaints within nine days of receipt, accounting for 52 per cent of the total number of complaints resolved. This represents a decline from the 65 per cent for the same category in 2016. Eighty-seven complaints took in excess of 120 days to be resolved.
Meetings with insurance companies
The OFSO continues to receive complex insurance complaints, including some related to multi-vehicular accidents and company referrals. In an effort to resolve these matters, it engages the respective companies in extensive multi-party mediation.
During the review period, the OFSO convened 12 meetings with insurance companies, including three multi-party mediation meetings.
Encouraged by the latest International Monetary Fund (IMF) report on T&T, Finance Minister Colm Imbert wasted no time in sharing the good news via a press release and a series of tweets from his Twitter account over the weekend.
The report by the IMF mission, released last Friday following its regular annual Article IV consultation in this country, confirms much of what Mr Imbert announced in his mid-year review of the 2018 Budget in May, so it is easy to see why he would be keen to share when he described as “a very positive report.”
Certainly, there was a lot of encouraging news in the release, including improvements in fiscal and external balances which the IMF attributed to the Government’s ongoing fiscal consolidation efforts. All these are welcome developments after the years of economic downturn with the difficult adjustments experienced in the country over the last two years.
However, don’t take this as a reason to break out in wild celebration—there is still a lot to do to get the economy on a sound footing and Mr Imbert and Finance Ministry staff—in planning their next moves in managing the still recovering T&T economy—would do well to heed some of the IMF’s advice. There was a lot of it in the preliminary report, as well as some lingering concerns, particularly with the forex market, that ought not to be overlooked.
Of course for some citizens, particularly those who lived through those difficult years of structural adjustment from the mid-1980s, it might be hard to see the IMF in any positive light as an adviser and supporter of economic progress.
The agency’s intervention to steer the country out of a severe fiscal deficit involved some painful measures—suspension of cost of living allowances for public sector employees; a voluntary severance programme; credit controls.
However, the recent IMF visit to T&T was not about that but rather helping this country achieve macroeconomic stability by providing policy and advice. Often overlooked is that the agency’s mandate is to reduce poverty—perhaps an idea hard to accept by those who endured the belt-tightening measures the country endured during the years of IMF conditionalities.
In any case, as Prime Minister Dr Keith Rowley has repeatedly assured, this nation is not in imminent danger of having to go back to the IMF. It might be a good idea, though, for those in charge of the country’s economic fortunes, to pay some attention to what the agency has to say.
As the IMF points out in its assessment, while economic improvements in T&T have been driven mainly by last year’s increase in energy prices, it is difficult to predict the “level and direction of change” in those prices. It therefore recommends that mechanisms be in place to maintain the momentum of fiscal adjustment and, not surprisingly, also urged continuation of diversification efforts.
The agency also recommended further measures to put the public debt on a “sustainable, downward trajectory” that would keep central government debt at around 30 per cent of GDP and public debt below 55 per cent.
“Transfers to public utilities continue to represent a significant fiscal drain. Staff concurs with the authorities that raising utility tariffs should be guided by a rate determination exercise by the Regulated Industry Commission, and implemented with urgency,” the IMF stated in a preliminary release following the T&T mission.
Echoing concerns that have been expressed in the recent past by economists and local financial experts, the IMF recommends managing public debt and the Heritage and Stabilisation Fund (HSF) in a manner that limits the need to draw down on that fund.
But of even greater importance is the assessment of the still difficult forex situation. This is an issue that the IMF has addressed in all of its recent reports on this country and this time, while noting that tightness in the market has eased compared to last year, warns that it is still “in a state of disequilibrium with strong excess demand.”
According to the agency, foreign exchange shortages persist despite a seven per cent nominal depreciation in 2016, the current account surplus of 2017, increased inflows from energy companies and regular Central Bank interventions to maintain a stable exchange rate. This, says the IMF, suggests the existence of an informal parallel market.
It further noted that uncertainty about the availability of forex or expectations of a further depreciation might be leading to hoarding, contributing to tightness in the market.
The recommendation to the Government, in the context of further potential volatility in energy prices, is that they take advantage of the current relatively stable period with low inflation to address the shortages, by adjusting the price or supplying foreign exchange at the given exchange rate.
The IMF also had some words of caution on the US$100-million Exim Bank facility introduced in May 2018 to help local manufacturers to finance their inputs, noting that it could add to market distortions if not carefully designed and implemented, creating incentives for misuse “as well as possibly introducing an exchange measure subject to the IMF’s Article VIII.”
The agency underscores the need for the facility to be carefully designed to ensure transparency and consistency with international standards and the authorities to provide sufficient foreign exchange to meet demand for all current international transactions.
The agency also see a more active role for the exchange rate as an automatic stabiliser and to help manage the transition to a more balanced/flexible foreign exchange market.
“The currency remained broadly stable since the depreciation in 2016, while vulnerability to terms-of-trade shocks continues. Greater flexibility, implemented through a mechanism that allows some market force in determining the exchange rate, would facilitate adjustment to external shocks, help restore competitiveness and safeguard foreign reserves.
“Implementing exchange rate adjustment gradually (within more flexible forms of a peg, such as widening bands) would permit two-way exchange-rate variation, and, in so doing, reduce incentives for FX-hoarding and one-way currency bets, while maintaining the exchange rate as nominal anchor,” it states.
On the matter of sustainable growth, Mr Imbert and his technocrats might also want to pay to the IMF’s suggestions for achieving and maintaining sustainable growth, such as introducing reforms to improve the business environment which it says are “crucial to support fiscal adjustment and boost economic growth.”
The report states: “With the economy heavily-dependent on the energy sector, obstacles to non-energy growth must be addressed and diversification efforts intensified. Efforts to support tourism should continue, given its linkages to agriculture, services, and light manufacturing, and obstacles to its growth (eg, air/sea connectivity, cost of doing business, and access to finance) should be addressed.
“Institutional reforms should focus on improving paying taxes and enforcing contracts, and legal frameworks should facilitate legislative-passage of ongoing reforms.”
However, I want to add some emphasis to this part which, in my view, needs to be an area of greater focus because of its debilitating effect on the country’s economic health: “Violent crime, with homicide rates one of the highest in the Caribbean, presents a drag on the economy, with direct crime-related costs from public, private, and social spending estimated at 3.5 per cent of GDP—around the average for the Latam and Caribbean region.
“Staff supports government efforts for crime reduction and suggests a balanced approach with prevention and crime-control programmes.”
All this, of course, is just the tip of the iceberg. The IMF assessment addresses a wide range of issues and these are just a handful of the more pressing matters highlighted in the report.
What will help here is clear headed consideration of all recommendations, strongly resisting any temptations to add any political spin to any of them. After all, the aim should be to put this country on a path to long-term economic sustainability.
This is by no means an easy task and no one should envy the heavy responsibilities now being shouldered by Mr Imbert as Finance Minister. However, the IMF’s recommendations, as well as others from the other reputable institutions keeping a keen eye on the country’s economic progress, could be the basis for policies and programmes.
The offer to the public of tax-free bonds by the National Investment Fund Holding Company Limited (NIFHCL) is expected to cost $40 million to launch and market. Individuals will have first preference over institutions in the allocation process and foreigners will be allowed to invest in the fund.
This was revealed during a pre-launch briefing hosted recently by lead broker First Citizens Brokerage and Advisory Services Ltd.
The bond is guaranteed by dividend flows from five companies which are sufficient to repay obligations of the bonds. Republic Financial Holdings will form 54.7 per cent of the fund, Trinidad Generation Unlimited 25.7 per cent, Angostura Holdings 12.3 per cent, Witco 5.1 per cent and One Caribbean Media 2.2 per cent. (See pie chart)
Since the Government is the 100 per cent shareholder of NIFHCL there is an implied support to ensure payment of the bonds. However, there is no explicit government guarantee, so the bonds are priced about one per cent above current government bond returns to provide investors with added returns.
Some assets that have been put in the NIF and the flows from these have been captured and ring-fenced by assigning them to a trustee. The expectation is that the dividend flows should be sufficient to repay the obligations which are the principal and interest over the 20 years of the bonds.
How the investment works
The NIF will benefit corporations which invest in it as they will not be taxed on the investment. A company with a 30 per cent corporation tax rate will have to invest the equivalent of 6.4 per cent five-year taxable bond to get the same net income returns as the five year 4.5 per cent bond from NIFHCL. This is where bonds from NIF become an attractive investment.
The fund comprises five assets: Republic Financial Holdings Ltd (RFHL), Angostura Holdings, Witco, One Caribbean Media and Trinidad Generation, collectively worth $7.9 billion. These assets will cover the $4 billion bonds.
There will be an operating fund and a sinking fund. All dividends from the $7.9 billion in assets will go into an operating account where the trustee, First Citizens Trustee Services, has deed of charge.
A deed of charge means all the dividend payments that go into the two accounts will be used only for payment of interest and principal on the bonds. There is then a deed of charge, similar to a mortgage charge, on the share assigned and on the account.
Once the dividends go into the operating account they stay there for six months until the end of the period when the coupon is due. The coupon is then paid to the T&T Central Depository, the paying agent.
Any excess gets swept into a sinking fund account which is then used for redemption of the bonds. Only the dividend flows will be used to service the coupon and principal.
When the dividends come in, the only thing that is going to be deducted are the NIF’s annual operating expenses.
NIF has a board of directors with no management. The directors are all internal, all public servants. Any other function is outsourced, such as payments to auditors to prepare financials, payments to paying agents and registrar and website maintenance fees.
Senior management of First Citizens would not be allowed to invest in NIF.
Republic Financial Holdings Ltd—a financial services group comprising several subsidiaries and associated companies. The group is engaged in a wide range of banking financial and related activities, mainly in the Caricom region and Ghana.
• Profits may be impacted by higher industry tax rate
• The tempered growth prospects in the domestic economy would be cushioned by growth in overseas subsidiaries
• There may be some downside risks related to the Government of Barbados
• Future dividends over the near term are expected to remain at historic levels
• In the medium to long term, dividends are anticipated to increase as the domestic economy’s performance improves
Angostura Holdings Ltd—through its subsidiaries it engages in the manufacture and sale of rum, aromatic bitters and other spirits worldwide.
• In 2017, the group rationalised and restructured their operations, changed its executive management team and business model
• The group strategically reduced its dividend payment in 2017 in order to facilitate greater reinvestment in the development of its export markets
• The benefits of the restructuring was evident In the Q1 results where the cost of goods sold fell by 10 per cent year on year, boosting net profit by 75 per cent
• Over the near term, future dividend payments are expected to remain on par with 2017 payments given the group’s export strategy and improved profitability
• In the medium to long term, dividends are projected to increase as the group’s international strategy gains traction
Witco—a subsidiary of British American Tobacco (Investments) Limited, a company registered in the United Kingdom. Its ultimate parent company is British American Tobacco plc, a company registered in the United Kingdom. The principal business activities of the company are the manufacture and sale of cigarettes.
• The company’s diversification strategy into lower end products would continue to bode well as the domestic economy slowly recovers.
• The company will continue to face competitive pressures from illicit brands
• The change in customer behaviour to low priced brands is expected to be permanent in nature. Thus performance and dividends are expected to remain subdued in the near term
• Once the economic recovery picks up, the company’s financial results should also improve
Trinidad Generation Unlimited (TGU)—Incorporated in December 2006, TGU’s principal activity is to engage in the acquisition, construction, ownership and the operation, management and maintenance of power generation facilities. The company is wholly owned by the Union Estate Electricity Generation Company Ltd, an entity controlled by the Government
• TGU has a reliable revenue stream; T&TEC (currently its only customer) is obligated to make payments for up to 93 per cent of contracted capacity regardless of whether T&TEC takes full delivery of power generated, force majeure events, regulatory changes or certain TGU defaults
• These payment obligations are under a Purchase Power Agreement (PPA) and are fully and unconditionally GORTT guaranteed.
• The PPA ends in 2041 which exceed the life of the NIF bonds
• TGU can invoice up to a maximum of 95 per cent payments in US-dollars under the PPA. This hedges operating, maintenance and finance costs that are denominated and/or paid in US dollars
One Caribbean Media—through its subsidiaries, the company is engaged in media services, wholesale distribution, broadband services and the sale of other goods and services.
• With 67 per cent of its revenues coming from T&T and 33 per cent from Barbados, the group’s growth prospects are expected to be tempered in the near term, evident by its Q1 2018 results.
• The rebound of the domestic economy should serve to boost OCM’s revenues and in turn dividend payments in the medium to long term.
— Information provided by First Citizens Investment Services Ltd
Even though the high interest tax-free bonds in the National Investment Fund Holding Company Ltd (NIFHCL) would be available from July 11, business leaders believe the investment climate is in place to facilitate the fund.
The leaders gave their views about the NIF bond which would be offered in three tranches: five years with an interest rate of 4.5 per cent, 12 years with an interest rate of 5.7 per cent and 20 years at 6.6 per cent.
The NIFHCL was formed as a vehicle to monetise assets transferred to the Government from CL Financial and its subsidiaries, so the Government can recover funds owed from the $23 billion bailout of Clico after the insurance giant’s 2009 collapse.
The leaders spoke at the Business Outlook conference hosted by the T&T Chamber of Industry and Commerce (TTCIC) last Wednesday.
Blue Waters Products Ltd
Managing director, Blue Waters Products Ltd Dominic Hadeed urged the investing public if they are not satisfied with the returns that they are getting from the banks, they should invest in the NIFHCL.
“We are putting a lot of investment in plant and equipment and that is what we are spending a lot of money on this year. If we have extra money then definitely we are going to look at the NIF. For people who have liquid money and they are not happy with the rates at banks it may be a good opportunity.”
Commenting on the state of the economy, Hadeed said it is looking stable and it’s not getting worse; it looks as though it can move forward toward further growth. He added if business people are not investing in the NIF it is because there are more viable projects in the country in which to invest.
“If we don’t participate (in the NIF), it is actually a good thing, but it does not mean NIF is a bad investment.”
Amera Caribbean Development Ltd
Managing director Joseph Hadeed said he preferred to wait until the prospectus for the fund was available, but expressed confidence in the economy that there would be further growth.
“There is a lot of pent up capital that is in T&T awaiting deployment, and I think the more investments that come to market the better it gives us the private sector, a proper amount of variety in order to make proper business decisions.
Investment is certainly positive the economy is on a rebound, that’s a positive outlook, the leading indicators are pointing in the right direction so we are confident that things would turnaround by the end of 2018/2019.”
Amera Caribbean’s investment projects have mainly been projects within the real estate sector. Explaining why he had confidence in the economy despite a slow in the construction sector, Hadeed said the gestation period of the sector is one which takes time to develop, adding that construction normally happens heavily during the period between January and June.
“It is not something you make a decision today and you see a new building or a new office building tomorrow. It requires a lot of planning, site planning, design, finance requirements and then the actual construction. The lack of new construction taking place in the market now should not be seen as a negative, because once the economy starts generating more positive movements, then you would see construction.”
He added that one of his concerns when the economy starts to turn around is that there would be a problem accessing “quality” labour and material on a timely basis and on a price competitive basis.
“Once things start turning around, is there the right infrastructure in place to assist in having the right labour environment and the right material environment so we can continue to develop at the right pace?”
He called on the Government to put the right infrastructure in place so when the economy starts turning around even further, the business community can continue with their investment.
National Gas Company
Gerry Brooks, chairman of the National Gas Company, described the NIF as a good opportunity and urged business leaders to look at it and then make some informed decisions. Referring to the TTNGL public offering he said it is an excellent example of people making an investment and getting a lucrative return.
Trade Minister Paula Gopee-Scoon also said it is an excellent opportunity with guaranteed returns and is available to every level of society, not only to businesses but to the man on the street.
Rationale for offering bonds
Finance Minister Colm Imbert who spoke in the Parliament last Tuesday had given the rationale for offering bonds to the public through the NIF.
“From market soundings, it was determined neither a fund issuing units nor a company issuing shares could generate the $4 billion through a public offering given restrictions governing the structuring of portfolios within the institutional sector including pension funds and life insurance companies. It was agreed an asset backed corporate bond with appropriate tenors and coupons would be adequate to meet the varying investor requirements of the individual, corporate and institutional sectors.”
Massy Stores chief executive officer Derek Winford recently continued the distribution of reusable bags to members of the public at the Gulf View and St Augustine Stores.
The reusable bags are part of Massy Stores’ thrust to “Get to Green” which limits the number of plastic in usage at its grocery chain across the region.
The campaign branded with the hashtags #LetsAllDoOurPart and #BYOB (Bring Your Own Bag) aims to make the public more aware about the harmful effects of plastics and minimise its use as it adversely affects our environment, marine and wildlife.
Addressing the media at the Gulf View store, Winford said it is all part of the company’s thrust to become more environmentally aware and reduce the reliance on plastics.
“We give away 34 million plastic bags every year and it really has to stop, so we have decided to use reusable bags.
“We intend to give away 80,000 reusable bags which we believe is a good base to stop using plastic bags. We are asking members of the public to help us reduce plastic usage and plastic consumption in the country since we know of the damage it has been causing via the Internet and social media,” he said.
Winford said this is one of the first steps that the company has taken to reduce the amount of plastic, while ensuring that their actions match their words.
The distribution of reusable bags began on June 5 – World Environment Day at Massy Stores in Maraval and will continue at their other locations.
The reusable bags will be sold at $10 and $12 at all Massy Store locations with several in-store promotions being conducted, such as buy one get one free and allowing those customers who spend over $500 to get a free reusable bag.
On July 3, Plastic Bag Free Day, Massy Stores implemented a 50- cent fee for disposable plastic bags as a deterrent.
Professor Muhammad Yunus, known for establishment of the Grameen Bank, propagated the “profit for purpose” definition where he sees social enterprises operating to earn profits, but to redeploy the profits in furthering the mission of the enterprise, rather than pay out the investors.
For them the mission of the enterprise should address a large scale social problem.
In his view, the social enterprise (business) should serve or meet the social need. In the process, if the business makes profits, that is incidental.
He further shares that when social enterprises make surpluses out of such businesses, these should be applied back into the business to continue to solve the problem and not enrich the entrepreneurs.
The primary goal of such businesses should be to exist for a “purpose” as an end in itself, extending beyond the concept of economic benefits sought by a regular business enterprise.
The key therefore lies in ensuring social enterprises have a well-defined social mission.
If you are thinking about starting a social enterprise or if your existing business doesn’t have one, then articulating a social mission is a good starting point.
Here I share with you three reasons to illustrate the power of your social mission:
1 Provides focus, focus, focus. Having a social mission can be empowering, and can demonstrate your commitment to the social good. Additionally, your social mission can be utilised to empower your employees. It can serve as a reminder “why are we doing this again?” It can rally the team spirit for your most critical asset—your employees.
2 It adds to your brand value. Your social mission should not be just a statement on your company’s wall. It can be incorporated possibly as a kind of tagline, to be directly associated with your brand. Document it in your brand guidelines and make it a part of your corporate identity.
3 Allows you to build partnerships.
Your social mission can be a compelling reason for donors or volunteers to be part of your journey. It allows you to affiliate yourself with other supporters of this mission and vice versa. In this way, you are able to earn more visibility and do more good by aligning yourself with others who are already involved in this mission or who would like to become involved in this mission.
Remember, don’t hide your social mission.
As social entrepreneurs, you should strive to display your social mission wherever you can. There are many ways you can make your social mission visible.
For instance, on your call card or from the About page of your website to the bylines of your press releases.
This will help keep your cause top-of-mind among your audience.
In sum, it’s never too late to get involved. If your existing business doesn’t currently have a social mission or you are think about establishing a social enterprise, now is the perfect time to get started with one.
Remember, the power of your social mission is not a drain on your company’s assets.
It can go a long way in achieving that social good.
NIRMALA MAHARAJ is a doctoral candidate at the UWI-Arthur Lok Jack Global School of Business. Her research is in social entrepreneurship. Mobile: 689-6539 / E-mail: [email protected]
Patricia Ghany, who has just been installed as the 15th President of the American Chamber of Commerce of T&T (AmCham TT), says she is humbled by the faith the board has placed in her to lead an dynamic organisation she says has a proud past and an exciting future.
As the second woman to head AmchamTT, she is determined to follow in the footsteps of the past presidents—Clyde Alleyne, Catherine Kumar, David Chaney, Nicholas Galt, Raymond Gatcliffe, Eugene Tiah, Simon Aqui, Hugh Howard, Ravi Suryadevara, and Mitchell De Silva—all of whom have provided strong leadership and gave generously of their time, expertise and wisdom.
Ghany, who is 53 but looks years younger, said: “Through their passion, dedication and commitment they skilfully charted AmCham’s course through multiple challenges, changing times and economic landscapes.”
Her journey with the organisation began 23 years ago, when her company, Esau Oilfield Supplies, was encouraged to become a member.
“When AmChamTT was formed in 1992, T&T had just come out of a bruising IMF structural adjustment programme. The economy had been significantly liberalised. Fiscal consolidation and structural reforms were being undertaken against a backdrop of social dislocation, global change and limited fiscal space for the government,” Ghany recalled.
“By the time I joined the organisation in 1995, the TT dollar had been floated, public finances had been stabilised, the decision to go into LNG had been cemented. In fact, Atlantic was incorporated in that year.
“But the economic recovery was neither complete nor secure. It was a confusing time, it was an exciting time and we knew our company had to build solid relationships not just to survive but thrive in the years to come. As part of that effort, we made a conscious business decision to join AmCham and have never looked back since.”
As the first port of call for any US or international company seeking to do business in this country, Ghany said AmChamTT provides the perfect environment in which to meet and collaborate with contemporaries, not just in the oil and gas, but along the value chain in almost every industry.
“We need only to look at our current board and the areas of expertise—ICT, banking and finance, local and international conglomerates, transportation and services,” she said.
An issue close to Ghany’s heart is gender parity, particularly diversity and gender balance, which are integral engines of innovation.
“If we are to champion broader and more inclusive representation at all levels of the private and public sectors, then we must lead by example,” she said.
AmChamTT, she pointed out, has a legacy of female leadership. In 1991 Sally Cowell, then US Ambassador to T&T, and Nisha Lau, then GM of FedEx, were the original architects who drew up plans for the organisation and together brought AmChamTT to life.
In 2000, Catherine Kumar, then chief operating officer of Algico, was elected the first female president.
In 2003, Ghany had the privilege of serving on the board while Kumar was president.
“Indeed, women have led the pack, with successive female executive directors, each of them infusing the organisation with various strengths and dynamism from 1993 to 2014,” she said.
“It’s interesting to note that it was only in 2014, we had our very first male CEO, Nirad Tewarie. It’s also worth mentioning that our highest level of female board participation peaked at 45 per cent during the period 2015 to 2016.”
Another area of focus for Ghany will be digital transformation.
“We have all become familiar with the now clichéd examples of Uber and Airbnb as disruptors of two long standing industries. We all need to embrace the digital transformation that’s going on if we are to survive, compete and grow. More than that, we need to be part of the healthy disruptions that are happening in the market.
“It can be quite a scary thought to think about the potential of technology to change our businesses and business models forever but we need to embrace reality.”
Ghany assured that AmChamTT’s member companies are well positioned to take advantage of rapid technological shifts that allow market share, clients, strategic alliances and partnerships to grow seamlessly, no matter the geographic position.
“To achieve these objectives, the board will be working closely with our digital transformation committee to develop strategies and provide insights for both the public and private sectors that can assist with digital transformation,” she said.
As the pathway to the Americas, she said, AmChamTT will continue to forge links with businesses across the Americas so other lucrative markets can be opened to member companies.
“No other chamber can provide the access, linkages and information that AmChamTT can as a result of membership and leadership in the Association of American Chambers of Commerce of Latin America and the Caribbean, the network of the 24 AmChams in this hemisphere allied with the US Chamber of Commerce. We will continue to develop these links to provide value to our members,” Ghany said.
Another critical issue is competitiveness. The competition for investment dollars is intense at regional and international levels. Global markets are changing.
Tax reforms and shale oil and gas industries in the US are already having a disruptive effect on the structure of businesses in the hemisphere.
“And other countries are adapting and starting to thrive. Jamaica, Guyana and Grenada in this region are actively changing the structure of their economies and acting with a sense of purpose,” she said.
“The Dominican Republic has been one of the fastest growing economies in this hemisphere for near a decade. T&To, however, has lagged behind our counterparts.
“For us to be an attractive investment destination, we cannot continue to make internal plans and goals in isolation. We cannot continue to talk and not do. Rather, we must understand what the other countries in the region and in the world are doing in terms of tax incentives, fiscal and monetary policies, developing human capacity and improving regulatory environments,” she said.
Ghany, who takes over from outgoing president Mitchell De Silva, will serve a two-year term.
The work of local designer and artist Sheldon Martin Warner speaks volumes.
His creations are bold and alluring, colourful and fascinating and have landed him clients in London, the United States, Japan and other parts of the world.
Warner, whose design studio is in Lopinot, Arouca, was among a diverse group showcasing their talent at the launch of the Trade Ministry’s fashion value chain investment programme (VCIP) for 2018 at the Government Plaza, Port-of-Spain.
The fashion industry has been identified as one of the key drivers in the thrust to diversify the economy and FashionTT is the state agency mandated to propel business development and export activity in that sector. In pursuit of this mandate, a strategic plan for the fashion industry was developed and approved by the boards of FashionTT and its parent company CreativeTT.
Describing his pieces as a lifestyle collection, Warner said: “Everything is hand-painted, one-of-a-kind.
“The range of items are hand-painted clothing for men and women, to home collections items comprising hand-painted tableware. We also have acrylic wall hangings.”
Warner, who has many high-end clients, has designed for local Miss Universe delegate and participated in regional and international fashion week events.
He said fashion has an integral place in T&T’s economic landscape and new capacity building opportunities continue to be provided for local fashion entrepreneurs with the continuation of the VCIP, a strategic initiative aimed at increasing the sector’s commercial impact. It is facilitated by faculty of the Fashion Institute of Technology, New York, under the guidance of Professor Vincent Quan.
The VCIP is subdivided into four tiers: the global value chain (gvc) support programme, non-global value chain (non-gvc) support programme, incubator programme for new/young high potential companies or partnerships, and firms that are earmarked for future support.
FashionTT, led by general manager Lisa-Marie Daniel and under the guidance of the FashionTT and CreativeTT boards, successfully inaugurated the programme in 2017 and continues to strive for excellence in this field.
The 2017 cohort was applauded for maximising a valuable opportunity to improve the various elements of their value chain.
Daniel noted that the global fashion industry generates in excess US$2.4 trillion and within the local fashion sector there are many creative designers.
“One of the main objectives is eventually getting products out for export and getting more promotion locally. FashionTT is supporting our designers in doing so through capacity building programmes. We are also partnering with UTT with respect to the implementation of a local production facility which will be launched by the end of this calendar year at the UTT’s Wrightson Road campus.
“This facility will support the manufacturing of goods to fulfil orders locally and for export,” she said.
While there have been some obstacles in ensuring the industry is thoroughly thriving, including equipping designers with business acumen and providing more production spaces, Daniel said Fashion TT has been closing these bottlenecks through a series of initiatives, including discussions with retailers to offer products from local designers at their stores.
“This is a very palatable industry. It can definitely help the economy away from oil and gas,” Daniel said.
Chairman of the T&T Creative Industries Company Ltd (CreativeTT), parent company of FashionTT, Calvin Bijou, explained: “The strategic plan for the fashion industry prudently earmarked vital near, medium and long-term projects to aggressively drive the business development and export activity of the local fashion industry.
“The cornerstone of these is the value chain investment programme. This programme provides mentoring and training for designers and aspiring designers irrespective of where they find themselves in some of the business stages.”
Trade Minister Paula Gopee-Scoon, FashionTT’s line minister, highlighted the importance of the VCIP, saying it provides a platform for local fashion designers to improve the various business elements of their value chain, making them better positioned to export and compete on the local and international markets.
“The creative industry has untapped potential that can contribute significantly to income generation and job creation. It’s heartening to hear of growth in their respective businesses including, for some, entry into regional markets in keeping with the strategic direction outlined by FashionTT for the period 2015–2020.
“This augers well for the fashion industry and for the domestic economy of T&T, as it introduces a new stream of revenue, job creation and foreign exchange earnings,” Gopee-Scoon added.
Creative entrepreneurs are also beneficiaries of other initiatives being implemented by the Government, including the national e-commerce strategy and the national quality policy and supporting national quality infrastructure.
The Trade Minister said: “As a Government we envisage that products proudly made in Trinidad and Tobago will be differentiated in the international market on the basis of quality, value and innovation rather than on price alone. The creative sector, and fashion in particular, can blaze a trail in this regard.”
Designers were told about access to funding through the business development fund in the amount of $100,000 per applicant, a grant fund facility to a maximum of $250,000 and up to $1 million per beneficiary under a research and development facility.
The Trade Ministry is also operationalising a secured transactions and collateral registry which envisages use of moveable property—intellectual property, machinery and equipment, accounts receivables—as collateral when approaching financial institutions for a loan.
• For more information on the value chain investment programme visit www.fashiontt.co.tt/VCIP or follow FashionTT’s social media pages, Facebook, Instagram and YouTube, to keep up-to-date with this and other fashion industry initiatives. Information on other grants and funds are accessible at http://tradeind.gov.tt/
Local businesses were urged by Trade Minister Paula Gopee-Scoon to recalibrate and maximise their contribution to economic diversification.
Speaking at the opening ceremony of the T&T Manufacturers’ Association’s Trade and Investment Convention (TIC) at the Centre of Excellence, Macoya, Gopee-Scoon highlighted the fact that further development must actively include greater and more meaningful contributions by the private sector.
“For far too long we have given lip service to diversification and resolutely identified the Government as solely responsible for the success of expanding and creating new opportunities in the non-energy sector. I wish to change this focus and put questions to the business stakeholders, as we formulate solutions to support further economic diversification,” she said.
The minister encouraged the private sector to further promote efficiency, productivity and innovation, and also create a space for free and open collaboration and cooperation with Government towards mutually beneficial objectives.
In response, first Vice President of the TTMA Franka Costelloe maintained that the state has continuously recommended the manufacturing sector champion diversification.
“The TTMA has committed to developing a working strategy for the non-energy manufacturing sector by the end of the year which is private sector driven [sic] with support of the government.
We see that we have a responsibility to our community in many ways—providing employment, earning foreign exchange, providing high quality and affordable goods to our community and building our nation’s pride in who we are and what we produce,” she said.
Costelloe added that “TIC is an excellent example of how public and private sector partnership can work to generate business activity, employment and export.”