The 2018 National Budget of the Republic of Trinidad and Tobago

11 October 2017


Changing the Paradigm: Putting the Economy on a Substantial Path – 

Part Three: The Path to Diversification

A Firstline Securities Limited Blog by: Mike

Tourism

The Tourism Development Company (TDC) has been dissolved and replaced by two new companies.

The Tourism Trinidad Company will market the Trinidad tourism product in conjunction with the Ministry of Tourism. The Minister describes the Trinidad tourism product as comprising of meetings, conferences, exhibitions, and cultural tourism.

The Tobago Tourism Agency will market and develop the Tobago tourism product as a leisure based location under the remit of the Tobago House of Assembly.

Alongside this the Maracas Beach upgrade will be completed shortly and the Sandals Project in Tobago – despite some reports to the contrary – is still proceeding. The Minister expects the negotiations with Sandals to be concluded shortly.

Agriculture

Over the period 2003 to 2016 Trinidad and Tobago’s food import bill is estimated to have amounted to US$8.91 billion.

Despite many incentives, the number of persons engaging in full-time agriculture and agro-processing has continued to decline. Therefore, the Government plans to introduce a financial support programme for farmers with grants available for new and existing farmers up to TT$100,000.

Grants will be directed to financing the purchase of seeds, planting materials, livestock, feed, chemicals, equipment, engines, and other essential inputs, but will not be available for the purchase of vehicles and other “non-essentials”.

Business Process Outsourcing

The Government approach to business process outsourcing has two facets:

  • Making Trinidad and Tobago an International Finance Centre offering a broader range of services and serving as a financial gateway to Latin America.
  • Taking the necessary steps to make Trinidad and Tobago a preferred location for “Business Process Outsourcing”.

Yachting

The Government intends to establish Trinidad and Tobago as the premier destination for yacht repair services. To this end the Government is:

  • Developing legislation to provide a clear distinction from commercial maritime laws and provide regulations and operating procedures.
  • Introducing a single harmonised form which will reduce entry and departure times for cruisers visiting Trinidad and Tobago.
  • Developing a comprehensive marketing and promotion plan for the yachting sub sector.
  • Looking at marina development through a public-private sector partnership.

The Creative Industries

As part of the diversification strategy the Government intends to facilitate the development of Trinidad and Tobago’s creative industries. These are identified as music, film and fashion.

In respect of music, an Export Ready Academy will be created to assist artists with the production, marketing, and exporting of their music.

For the promotion of film, the first step is to create a strategic plan, and to foster the development of talent through training and certification programmes. A Production Assistance and Script Development Programme will provide funding to film makers to allow them to produce high quality films.

For fashion the Minister plans to set-up a garment production facility at the John Donaldson campus and launch a Tailoring Certification Programme at the same facility.

Housing

The Minister identified that a low-income housing crisis exists in Trinidad and Tobago. This crisis exists for several reasons:

  • Demand for low-income housing far outstrips supply, with a HDC waiting list of over 150,000 persons, and a maximum HDC construction rate of 2,000 new homes per year.
  • The HDC has lost focus and drifted into the construction of housing affordable only to those with middle and upper incomes.
  • The construction cost of houses has spiralled from TT$100,000 in 2002 to TT$1.2 million in 2015.
  • HDC sells houses for prices that range from TT$500,000 to TT$700,000. This translates to a large loss or hidden subsidy per house sold.

To counter this the Government proposes to re-focus HDC on the construction of low-income housing, and to incentivise the private sector to construct houses by offering a cash incentive of up to TT$100,000 per house (or by the provision of free state land to build on in lieu of the cash incentive).

The Minister also announced plans to simplify the planning process.

The new Housing Programme is intended to start from the 1st January 2018 with the Government allocating TT$50 million to provide incentives for the construction of approximately 1,000 units.

Closing thoughts – time to consider your investing strategies

Firstline Securities Limited offers comprehensive coverage of local and international markets with a bias for the energy sector. Firstline offers many unique opportunities to put surplus cash to work either as your asset manager or investment advisor. Please contact us for more details at info@nullfirstlinesecurities.com or at 868.628.1175, we can discuss your investment needs in detail and craft a portfolio that makes sense for you. We look forward to hearing from you.

 

 

2 Responses to “The 2018 National Budget of the Republic of Trinidad and Tobago”

  1. Randall Mohammed says:

    I’ve noted the additional measures for developing a post oil economy. Again there is lack of detail and it seems that the $100,000 is a popular figure or simply an easy figure for the Minister to throw out. I’m surprised there was no talk about building a knowledge based economy. This should have taken priority even it means allocating more resources to education. For example I would have thought that investing in a technology park would be on the agenda. We live in a world of technology, the internet, apps, software and hardware, robotics and AI. Where are the opportunities and what part is the government playing to stimulate this sector. Possibly it will come later but in each instance I would like to know what is the estimated revenue to be derived and how much employment would be created if the initiatives are implemented. Job creation for our young professionals should be at the forefront. For example how much employment/revenue is the yachting industry expect to generate vs how much money the government plans to invest. On the issue of affordable housing there is technology available in the market to construct houses quickly using pre fabricated material that meets the highest quality standards. One could construct at a rate of 30sqm per day. Finally on tourism Maracas beach and Sandals is simply a far cry from making tourism a sustainable industry. There should be at least a dozen tourism initiatives on the table. Take the pitch lake. Why not invest in proper facilities – a coffee shop or restaurant. Look at any tourist site in the world. You will find clean washrooms, a souvenir shop, a café, food and beverage. Its an opportunity to show case local cuisine.

  2. FSL says:

    All good points Randall.