043_Global13_Spotlight_Tri&Tob

Global 13

SpotlightTrinidad and Tobago and growth. It has targeted seven clusters Trinidad and Tobago’s gas export destinations to diversify the economy. These are: down- 70% streaming energy and energy services; food 70 sustainability; tourism; finance; ICT-driven 60% n 20072011n industries; dry dock/ship repair/ship build- ing; and creative industries. 50% Trinidad and Tobago currently ranks 69th ness, as measured by the World Bank. To Percentage (%) 40%- out of 185 nations for ease of doing busi be really competitive outside the oil and 30% gas industry, where it has a natural resource advantage, the country has to do much bet- 20% 20 ter to attract investment. In response to that 16 1213 12 summons, the government has taken some bold steps, among them measures to ease 6 710% delays in customs and to fast-track action 1 2 4 4 1 2 1 2 3 1 3 1 3 3 2 144 cility, invesTT, has been created to support United States Canada Mexico Argentina Brazil Chile Dominican Rep. Puerto Rico Belgium France Italy Spain UK UEA China India Japan South Korea0%- on investment. For instance, a ‘one stop’ fa investment. Further, unlike any other Carib- bean country, a ‘Performance Framework’ Region with targets has been established to assess Source: BP Statistical Review of World Energy 2008 and 2012 respectively progress on the MTPF. The framework has laid down requirements to strengthen the USA for the sale of gas in the global on the resources of its Heritage and Stabi- competiveness, toughen standards, raise market. lization Fund (HSF), which was created in productivity and increase the country’s at- Sensibly, Trinidad and Tobago’s gas pro- 2007 to save and invest surplus petroleum tractiveness to investors. ducers have been diversifying their export revenues derived from production business. The journey will be arduous, but Trinidad destinations successfully to other higher As of September 2011, the HSF had assets and Tobago has put its feet on the ladder, price markets. By 2011, the US market, of TTD$4.1 billion. The government has and, in doing so, has started a climb that which accounted for 70 percent of Trinidad run small budget deficits over the past three many other developing countries are failing and Tobago’s gas in 2007, had already been years and has not drawn down on the HSF. to acknowledge as important and necessary. reduced to 20 percent. Further, the HSF is invested prudently in In this effort, the government has gained low risk assets outside Trinidad and Tobago the confidence and support of the Inter- The journey will be and unconnected to the energy sector. American Development Bank (IDB), which It is a matter for the Trinidad and To- approved a new Country Strategy with arduous, but Trinidad bago government to decide – and it would Trinidad and Tobago in November 2011. be hotly debated in the country’s parlia- Specifically, the strategy aims to help the and Tobago has put its feet ment – on whether more of the proceeds of country to transition its economy from one on the ladder, and has the HSF should be used for development that is dependent on the oil and gas indus- projects now or savings increased to cater try. Implementation of the strategy envisag- started a climb that for revenue downturns in the future, as well the period 2011–15. The IDB has identified many other developing generations could derive an income.as to enlarge the fund from which future es funding of around TTD$1.6 billion over the main areas of its involvement as: trade, countries are failing to The IMF, in a June 2012 discussion of public sector modernisation, education, the country, favoured “a clearer focus on housing and citizen security. In 2011, it ap- acknowledge as important savings together with more constraints on proved loans of TTD$290 million, and it withdrawals”. But the government seems and necessary says that the current loan portfolio consists to prefer a separation of the ‘savings’ and of eight loans for a total of US$205 million, ‘stabilisation’ aspects of the HSF obviously of which 93 percent is undisbursed. There The two good things with regard to the to give it room to utilise the country’s own is clearly, therefore, a gap in the govern- oil and gas industry is first, competition savings to finance the improvement of the ment’s take-up of the IDB’s support, and from the USA is not immediate; and sec- manufacturing, agriculture and services this would suggest the need to accelerate ond, there is time both to increase the pro- sector and diversify its markets. implementation of the strategic plan. duction of existing known reserves of oil However that discussion turns out, Trini- Such acceleration is made urgent because and gas, and to lay a new economic founda- dad and Tobago is in the enviable position of the market threat posed by the produc- tion in manufacturing, agriculture, tourism of being able to make a choice at a time tion of shale gas in the USA. It is anticipat- and services, including financial services. when it is universally agreed that its econo- ed that within the next decade, the USA will This is why implementation of the country my is once again set to grow.● not only be self-sufficient in gas because of strategy in cooperation with the IDB as- shale gas production, but it will also be an sumes very great importance. exporter. This means that, in addition to Apart from the support of international fi- Sir Ronald Sanders is a Visiting Fellow at losing its market for gas in the USA, Trini- nancial institutions, such as the IDB, Trini- London University, a consultant and former dad and Tobago will have to compete with dad and Tobago is fortunate that it can call Caribbean diplomat globalfirst quarter 2013 www.global-briefing.org l43


Global 13
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