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Bharath: We must seek out new partners in commerce
Trade Minister Vasant Bharath says T&T is facing a double-whammy in terms of its relationship with existing trading partners. Traditional European and North American markets are facing fiscal challenges and several Caricom neighbours are seeking bailout arrangements with multi-national lending agencies, he said.
Bharath raised these concerns when he addressed a business forum hosted by the Greater Tunapuna Chamber of Industry and Commerce on Confronting the Challenges of Trade at the T&T Bureau of Standards in Macoya. He said T&T must work to seek out new partners in commerce to maintain economic stability.
According to the minister, T&T is at the cusp of significant success or huge failure and the direction this country takes will determine its fate. He said since the global economic crisis of 2008, the rest of the world is moving on, having realised that it can no longer be business as usual.
“All of the European markets are finding it very difficult to recover from 2008. When one looks at the (pound) sterling and the velocity and the violence with which it has fallen since the beginning of 2013 only, it’s down from US$1.63 to US$1.51 within that short space of time. It indicates the economic pressures that are being observed by our European partners.
“For the first time in their history, the USA has been down-graded as far as their long-term sovereign debt is concerned. When one looks at Caricom, our second major trading partner after the US, one would see that many of our partners have already gone cap-in-hand to the International Monetary Fund (IMF) or other multi-national lending institutions,” Bharath said.
He added: “They are suffering terribly because there is a drop in their tourism sectors. What happens when there is a drop in the arrival of tourists? Not only does an economy do badly, but unfortunately and indirectly, what happens is that trade with T&T also drops, because it is our manufacturers that service these tourists when they arrive. It is our manufacturers who sell beds and mattresses and all sorts of items that are used in the tourism sector.”
The minister said Brazil, Russia, India and China, countries which were once held up as beacons of growth, are not insulated from world economic conditions. He said to survive the economic tremors still being experienced across major countries, T&T could not operate in a cocoon.
“We must by nature trade with other external parties if we are to survive. If our manufacturers are going to be competitive, they must have developed economies of scale based on the number of people they must sell to, based on the number of units they must sell.
“We have several advantages that we have either inherited of developed when one looks at over macro-economic position. Look at our savings in our Heritage and Stabilisation Fund, US$4.7 billion dollars foreign reserves US$10.3 billion representing 14 months of income cover. Our unemployment rate is below five per cent and inflation is seven per cent, down from 17 per cent,” he said.
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