Efforts to diversify the economy must be fine-tuned to achieve the desired results, says Vasant Bharath, Minister of Trade, Industry and Investments. "I'm of the firm belief that there are too many priority sectors. As a result, what has happened is, we have a million things that we put on the horizon as things we want to do, and diversify away from our oil and gas, and we never accomplish any of them," he said.
"What I have said to my ministry staff is that we need to focus on ten things that we can do and that we can make meaningful headway with them. We cannot do a million things and hope to accomplish any of them. We've got to focus on those areas that are transformational in nature, because many of the sectors that we are currently spending money and resources in, really, will have minimal or minor effect for diversification."
The minister said he has already started reviewing the ministry's work in this area and would adopt a more focused approach with regard to how resources are allocated. Bharath said while the topic of diversification was alive in almost every national budget presentation, the People's Partnership Government was actually serious about it.
"When a country like T&T has become accustomed essentially to depending on one sector of the economy, it becomes very hard to move away from that, hence the reason why I believe we have not made much progress in diversification," Bharath said.
Even as the minister seeks to breathe new life into the diversification process, there are many areas of concern he believes warrant urgent attention, starting with the VAT refunds for businesses, lack of efficiency at the nation's ports, standardising of procedures at the Food and Drug Division (under the Health Ministry), and the speedier processing of building permits.
Quicker VAT refunds
Value Added Tax refunds in 90 days. That was one of the assurances the minister has given to the business community. He said this has been another area of contention for manufacturers over the years. "It has really choked to some extent, many of the businesses in T&T, over the length of time and lethargy involved in receiving VAT refunds. I have spoken to the Minister of Finance (Larry Howai) on this matter.
"I am very well aware that it's an anti-export bias. In many instances, you have to pay VAT up front, and, of course, when you export you can't charge the VAT and then have to wait eight or 12 months for a refund. My intention is, during my discussions with the Minister of Finance, to advocate for a maximum of 90 days for payment of VAT for manufacturers."
Customs and Port efficiency
T&T is now ranked 126 out of 142 countries, as published in the Burden of Customs Procedures in the World Economic Forum Global Competitive Index 2012. Bharath said that was unacceptable. "This Government must take into account the fact that the private sector's ability to invest anywhere in the world is governed by, to a large extent, the ease of doing business.
"I believe we have to take some radical decisions with regard to treating with the issues of Customs and Excise. Clearly, my additional portfolio as minister in the Ministry of Finance will allow me that flexibility to be able to deal with the issue of Customs and Excise. We do live in a global economy today. People are no longer restricted to investing in their own countries or even in their own region.
They have a global reach. So when an investor in Russia or China or India or the Union Kingdom looks to invest, an individual investor... they look worldwide as to where to put those funds, and they are going to put those funds where there is an ease in doing business, having taken into consideration the risk and rewards are the best in their estimation."
Bharath added, "Therefore, we've got to create that environment in T&T that allows business people, local and foreign investors, to be able to do business easily. "I will ensure that the Asycuda system is linked to single electronic window to resolve these issues in a very short while. I can assure you that the process of overhauling and re-engineering the entire trade facilitation value chain is at the top of my list."
Increasing commercial land use
More land will be available for commercial use this September, through the Land Development Plan approved by Cabinet. Bharath said he has already started talks with Planning and Sustainable Development Minister Dr Bhoe Tewarie on the issue. "We are going to give serious consideration to increasing the lease terms from 30 to 99 years. At the Industrial Parks we have some leases that are 30 years and some leases that are 99 years.
"We want to bring all of them in line so you have that level of predictability, so you can build your businesses and have that comfort. I'm fully prepared to ask the ministry to re-examine the current model, where the State is solely responsible for developing these lands, allowing the private sector to develop these parks for T&T."
A modernised Food and Drug
Formal communication between Bharath and Health Minister Dr Fuad Khan on the issue of making the Food and Drug Division more effective has begun. Bharath said manufactures importing goods from Caricom were faced with "contradictory decisions and indistinct procedures," when goods arrive. An optimistic Bharath said with the help of Khan and his team, greater operational effectiveness for the state agency would be achieved.
"Over the past several years, several exporters to this country have had a lot of difficulty, culminating in the local manufacturers being blamed and labelled as being protectionist. But as important is the reputational risk for T&T," Bharath said. He said he was due to go to Jamaica next week to meet with the Minister of Industry, Investment and Commerce (G Anthony Hylton) to address the issue of trade imbalances between Jamaica and T&T, as well as the issue of Caricom products coming into T&T and the impediments caused by Food and Drugs.
Building-permit headaches
The process of acquiring construction permits in T&T was no easier than investing, the minister lamented. He related that smaller and less resourceful islands in the Caribbean had better procedures. Quoting the Global Competitive Index, he said, T&T ranked 93 out of 183 countries globally under the heading Dealing with Construction Permits. "In fact, within Caricom itself, St Vincent and Grenadines is ranked number six; St Kitts and Nevis, 16; St Lucia, 13; and Belize, nine.
"So why can these countries, with few technical and financial resources, do as well as they are doing and we in T&T, with an abundance of resources, can't get it right?" He said it was necessary for the ministries of Planning and Sustainable Development, Public Utilities, Environment and Water Resources to bring key agencies under one roof for the approval of permits.
These agencies, he said, will work closely with InvestTT-the country's premier investment agency-which falls under the Ministry of Trade, Industry and Investment to streamline the business facilitation process. "Business initiatives will come to InvestTT. InvestTT will now hold your hand through this process and they will be the one responsible for your T&T approval. They will be the ones responsible for your WASA approval. They are the ones responsible for the EMA and Town and Country. The investor comes back within three months, and InvestTT says, here are your certificates and all of your approvals," he said.
Bharath added, "It is unacceptable for any investor to have to be running from agency to agency, month after month, frustration after frustration, getting angry and eventually giving up. It is hard enough to our local investor to do it, much less for the foreign investor to come to T&T and do those things. "That will be up and running within three months."