Toward global competitiveness and innovation
Executive Director and Professor of Strategy at the Arthur Lok Jack Graduate School of Business Miguel Carrillo (center) leads a panel discussion on Trinidad and Tobago's rating in the 2012-2013 Global Competitiveness Report on Sept. 5, 2012.
On 5 September, the World Economic Forum released its 2012-2013 Global Competitiveness Report, revealing that Trinidad and Tobago is one of just 21 countries worldwide in the final and most advanced phase of its economic development.
The report confirms that Trinidad has already established itself as an efficient business location and is ready to transition to a technologically sophisticated, knowledge-based economy.
This year Trinidad ranks 84th out of 144 countries based on its business competitiveness and taking into account micro- and macroeconomic variables combined with an executive opinion survey. The report highlights many areas where Trinidad has a “notable competitive advantage” in global terms. These include the strength of investor protection, judicial independence, mobile telephony and Internet penetration, quality of electricity supply, macroeconomic stability, quality of the education system and management schools, tax regime, and bank stability.
The government is taking a holistic and coordinated approach to accelerate a competitive and innovative economy through its 2011-2014 Medium-Term Policy Framework (MTPF). Facilitating foreign direct investment is a key pillar to the plan, although many other initiatives to improve the overall business environment will also benefit foreign companies setting up in Trinidad.
The 146-page MTPF published by the Ministry of Planning and the Economy in October 2011, shows that the plan has been constructed to tackle any remaining weaknesses or concerns flagged by the Global Competitiveness Report and to build on Trinidad’s considerable strengths.
Under the MTPF, an Economic Development Board (EDB) and Council for Competitiveness and Innovation (CCI) were established in August 2011 to address business constraints and to boost Trinidad’s competitiveness.
Both boards report to the Ministerial Council for the Economy. The EDB aims to drive economic development strategies to diversify the economy in a sustainable way, while the CCI’s goal is to help businesses become more competitive, expand exports, and nurture innovation to improve Trinidad’s ranking in next year’s Global Competitiveness Report. As a result, foreign investors will benefit from a more business-savvy environment, stronger local supply chain, and systemically stronger country backed by a transparent policy that sets a clear roadmap to Trinidad’s global competitiveness.
Under the MTPF, key to improving the investment environment for foreign companies is the 2011-15 Investment Policy. It prescribes the legal changes required to improve the institutional and regulatory framework for investment and will result in a new Investment Promotion Act, which will replace the 1990 Foreign Investment Act. The new act will simplify the process for foreign investors to acquire land in Trinidad and equity stakes in domestic companies, among other measures.
The Investment Promotion Act will also reflect Trinidad and Tobago’s commitments under the revised Treaty of Chaguaramas (the effective foundation of the CARICOM trade bloc), and under the many bilateral investment treaties signed with foreign countries.
Of the seven key pillars to sustainable economic development under the MTPF, directly relevant to FDI opportunities is the thrust to encourage diversification away from dependence on the oil and gas sector by developing innovative industry clusters in technological and knowledge-based industries such as information and communications technology (ICT).
Trinidad’s new investment promotion agency invesTT, established in January 2012, is developing major initiatives to assist foreign investment in its target sectors: ICT, clean technologies, creative industries, light manufacturing, and maritime industries.
The 2012-2016 National ICT Plan, also known as smartTT, succeeds Trinidad’s first National ICT Plan (2003-2008), called “fastforward”, and seeks to build on the country’s current Internet readiness. smartTT’s IT goals are aligned with the MTPF and the ICT’s vision for the country “to create a dynamic knowledge-based society, driven by the innovative use of ICTs to enhance the social, economic and cultural development of the people of Trinidad and Tobago”.
The plan provides a five-year roadmap and identifies five key areas where ICT can best be used as a catalyst for transformation: education, community, business, infrastructure, and government. This again reflects the government’s holistic approach to building a modern and competitive economy in which foreign investors can thrive.
A number of other important measures stemming from the MTPF to benefit foreign investors have already been implemented.
The Ministry of Trade, Industry and Investment’s Single Electronic Window platform, also known as TTBizLink, has been launched. This online tool aims to streamline the process of acquiring various government requirements and licenses in a single location, including business registrations, import and export licenses, import duty concessions, and application for fiscal incentives.
The government’s proactive policies also create an FDI-friendly environment by introducing legislation for tax incentives for IT and business process outsourcing operations, creating special economic zones across Trinidad and fostering linkages between the private, public, and academic sectors.
The Trinidadian government is nevertheless mindful of the continued challenges to development, which are highlighted in the executive opinion survey in the Global Competitiveness Report. Among main concerns for investors are government bureaucracy, followed by fears of crime and theft, a poor overall work ethic, and corruption.
However, the MTPF’s key pillars directly tackle these concerns. The National and Personal Security pillar, for example, offers solutions to fears over crime by focusing on human security and the maintenance of law and order, addressing social conditions that may serve as incubators for criminal activity, and looking to reform the prison and justice systems.
The government is also working to reduce bureaucracy and establish better collaboration across its various agencies through connectivity to create a one-stop shop for government information and services. The Government Communications Backbone Project, or GovNeTT, establishes linkages among government agencies through a single Wide Area Network (WAN), which allows these agencies to communicate by e-mail, messaging, and scheduling platforms.