Trinidad taking initiative to bolster business reputation despite report ranking
Trinidad and Tobago ranked 92 out of 148 countries on the World Economic Forum’s (WEF) Global Competitiveness Report 2013-14. Not exactly where we want to be, but it’s still too early to see the impact of some of the work we’ve been doing over the past year.
One initiative we hope will help to improve the country’s ranking is the Council for Competitiveness and Innovation, an advisory team that launched last year within the Ministry of Planning, to work closely with local companies to boost innovation and productivity.
Last year, we were ranked 82nd out of 144 countries.
This year's score is not the whole story. According to the WEF report, Trinidad got high marks for its investment climate in key areas: infrastructure, macroeconomics, basic health and education, technological readiness, financial market development, legal rights and low trade barriers.
The competitiveness report affirmed Trinidad’s independent judiciary and investor protection policies, important legal protections to protect foreign direct investment (FDI) capital. The country’s economy shows long-term stability; its credit rating and gross national savings earned scores higher than 70 percent of countries ranked.
For foreign direct investors, the total tax rate as a percentage of profits is low, earning Trinidad 35th place out of the 148 countries ranked. Foreign private companies pay only 25 percent of taxable income in tax, and companies eligible to build on a free zone get total tax exemption.
The country still struggles with crime and bureaucracy, but the government is improving Trinidad’s business-friendliness through policy and legislative changes.
Trinidad scored fairly well for quality of infrastructure, reliability of the electricity supply (ranked 50th), a great support base for FDI projects in information and communication technologies (ICT), business process outsourcing/English voice services and light manufacturing. Transport infrastructure is stable and will be strengthened by several road improvement projects, the construction of a new small energy port at Galeota Point and an expansion to its Port of Point Lisas, to be completed in time to facilitate the Panama Canal expansion.
The competitiveness report also notes Trinidad’s capacity to attract skilled labour (ranked 22 out of 148) based on its mature energy, marine and financial service industries.
Its high-quality tertiary management schools (ranked 34th out of 148), math and science education (36th out of 148) and availability of scientists and engineers (ranked 48th out of 148) show evidence of a better knowledge-based labour pool than many of Trinidad’s neighbours.
Institutional and financial stability are big pillars for Trinidad’s growth. The Central Bank of Trinidad and Tobago’s mid-year 2013 Summary Economic Bulletin shows a 1.6 percent growth in the local economy over the last six months. The country’s banks are very sound (ranked number 37th out of 148). And Trinidad scored 9 out of 10 on the legal rights index, placing 12th out of 148 countries and proving its protective banking legislation as one of the best in the world.
The government of Trinidad and Tobago has also made ICT and financial services development pivotal in its development plan. TTBizLink is one such public sector ICT project, making it easier for companies to liaise with and submit documents to multiple government agencies.
Additionally, the Trinidad and Tobago International Financial Centre (TTIFC) facilitated Scotiabank’s reinvestment in a Trinidad-based regional back-office hub. The Canadian banking giant boosted the financial services industry when it chose Trinidad over the 30 other Caribbean and Latin American countries where it operates, months after another Canadian bank, RBC, opened its own back-office hub to service Trinidad and the Dutch Caribbean.
In this year’s report, Switzerland topped the list as the most competitive country. Chile ranked 34th and was the most competitive country in Latin America and the Caribbean, followed by Panama and Barbados.
Of course, I expect Trinidad and Tobago will improve steadily on future WEF rankings. InvesTT is leading the way as a one-stop shop for foreign investors. Partner agencies are doing their part, like Evolving Tecknologies and Enterprise Development Company Limited (eTecK) which is investing in new industrial parks and upgrading existing ones. This will boost our capability as an attractive business location.