An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

Marc Per­saud, co-founder and di­rec­tor of Caribbean Drag­ons, be­lieves the re­gion has reached an in­flec­tion point, one where in­no­va­tion must move from rhetoric to re­al­i­ty, if economies like Trinidad and To­ba­go are to with­stand the pres­sures high­light­ed in last Thurs­day’s re­vi­sion of T&T’s out­look from sta­ble to neg­a­tive by the glob­al rat­ing agency, S&P.

The glob­al rat­ing agency af­firmed its rat­ings of T&T at ‘BBB-/A-3’ long- and short-term for­eign and lo­cal cur­ren­cy sov­er­eign cred­it rat­ings.

“The neg­a­tive out­look re­flects our view that there is at least a one-in-three chance we could low­er the rat­ings over the next six to 24 months,” S&P said, adding in its down­side sce­nario that that could take place “if the Gov­ern­ment fails to take time­ly cor­rec­tive steps to strength­en the sus­tain­abil­i­ty of pub­lic fi­nances, en­sure long-term bal­anced eco­nom­ic growth, and main­tain the coun­try’s strong ex­ter­nal pro­file.”

The rat­ing added, “Fail­ure to ad­dress a pro­longed weak­en­ing of pub­lic fi­nances and diminu­tion of for­eign ex­change re­serves could re­flect in­sti­tu­tion­al short­com­ings that lim­it the gov­ern­ment’s ca­pac­i­ty to build buffers that en­hance the coun­try’s abil­i­ty to re­spond to neg­a­tive shocks.

Min­is­ter of Fi­nance Dav­en­dranath Tan­coo, in re­sponse, said he wel­comed the S&P rat­ing re­view.

“The S&P re­port em­pha­sis­es T&T’s re­silience and un­der­scores its po­si­tion as a trust­ed place for in­ter­na­tion­al in­vestors, par­tic­u­lar­ly dur­ing pe­ri­ods of glob­al un­cer­tain­ty. At the same time, the re­vised out­look high­lights the need for trans­for­ma­tive re­forms to ad­vance eco­nom­ic di­ver­si­fi­ca­tion, strength­en fis­cal dis­ci­pline, and en­sure long-term growth.”
In de­liv­er­ing the mid-year bud­get re­view on June 18, Tan­coo an­tic­i­pat­ed that the over­all bud­get deficit for the 2025 fis­cal year, which ends on Tues­day, would be $9.67 bil­lion.

For Per­saud, the re­port is more than a sober­ing fi­nan­cial as­sess­ment; it is a wake-up call to pol­i­cy­mak­ers and the pri­vate sec­tor that di­ver­si­fi­ca­tion through high-po­ten­tial star­tups is no longer op­tion­al.

“In­no­va­tion ac­cel­er­ates de­vel­op­ment,” Per­saud stress­es. “Glob­al­ly, re­search has shown that so­ci­eties em­brac­ing in­no­va­tion leapfrog stages of growth, so­cial eq­ui­ty, fi­nan­cial in­clu­sion, and com­pet­i­tive­ness all ad­vance to­geth­er. But here in the Caribbean, while we have vi­brant pock­ets of in­no­va­tion across is­lands, the chal­lenge is that they re­main lo­calised. To at­tract mean­ing­ful cap­i­tal, we must build a uni­fied re­gion­al in­no­va­tion ecosys­tem.”

Per­saud ac­knowl­edged that in­sti­tu­tions such as Cariri, Ex­im­Bank, Ex­port TT (now Glob­al TT), and UWI Ven­tures have played crit­i­cal roles in nur­tur­ing en­tre­pre­neurs. Yet, the ab­sence of scal­able cap­i­tal re­mains the miss­ing piece.

“Banks are built to pro­tect de­pos­i­tor funds, so their lend­ing mod­els are risk-averse. Ear­ly-stage star­tups sim­ply don’t qual­i­fy un­der tra­di­tion­al col­lat­er­al-based cri­te­ria,” he ex­plains.

“That doesn’t mean banks are blind to the op­por­tu­ni­ties. Re­pub­lic Bank has in­tro­duced SME toolk­its, and the Unit Trust Cor­po­ra­tion has been work­ing in this space. But the truth is most star­tups re­quire eq­ui­ty fi­nanc­ing, not loans. And banks won’t back­ward in­te­grate in­to eq­ui­ty in­vest­ing, that’s just not their mod­el.”

In­stead, Per­saud points to an­gel in­vestors, fam­i­ly of­fices, and in­no­v­a­tive lend­ing mod­els based on rev­enue flow as emerg­ing al­ter­na­tives. Caribbean Drag­ons it­self has men­tored and sup­port­ed over 200 star­tups in just two years, through grass­roots pitch com­pe­ti­tions and ac­cel­er­a­tor part­ner­ships across Ja­maica, Bar­ba­dos, and Trinidad and To­ba­go. Yet, the pipeline far ex­ceeds the avail­able fund­ing.

That gap, Per­saud ar­gues, ties di­rect­ly back to the di­ver­si­fi­ca­tion chal­lenge.

“If the Gov­ern­ment wants true di­ver­si­fi­ca­tion, in­vest­ing in high-po­ten­tial star­tups is a lever with ex­po­nen­tial re­turns. Un­like cot­tage in­dus­tries that may add one or two jobs at a time, scal­able star­tups can em­ploy 20 in their first year, 50 by their third, and be ex­port­ing to Mex­i­co or Chile short­ly af­ter. That’s how you shift GDP and cre­ate new for­eign ex­change streams.”

Caribbean Drag­ons, he said, has al­ready laid out a vi­sion, sub­mit­ting a white pa­per to the gov­ern­ment that pro­pos­es Trinidad and To­ba­go as the in­no­va­tion epi­cen­ter of the Caribbean.

“The frame­work rests on lever­ag­ing ex­ist­ing in­sti­tu­tions, spe­cial eco­nom­ic zones, Glob­al TT, Ex­im­Bank, the Cen­tral Bank’s new pay­ments coun­cil and the Trinidad and To­ba­go Stock Ex­change, while clus­ter­ing skills in blockchain, fin­tech, and dig­i­tal trans­for­ma­tion. The coun­try’s ge­o­graph­ic po­si­tion­ing as a gate­way to Latin Amer­i­ca makes it ide­al for scal­ing star­tups in­to larg­er mar­kets like Mex­i­co and Chile,” the co-founder out­lined.

Di­ver­si­fy­ing

Per­saud is cau­tious when pressed to quan­ti­fy just how much the in­no­va­tion sec­tor could gen­er­ate for T&T, par­tic­u­lar­ly giv­en the volatil­i­ty of start­up suc­cess rates. Still, he be­lieves the po­ten­tial im­pact is un­de­ni­able. “It won’t be bil­lions like oil and gas,” he ad­mits, “but we could eas­i­ly see hun­dreds of mil­lions of US dol­lars in for­eign di­rect in­vest­ment if we build the right ecosys­tem. A sin­gle start­up, if it scales suc­cess­ful­ly, can raise any­where from US$5 to US$100 mil­lion across fund­ing rounds and ul­ti­mate­ly IPO at val­u­a­tions of over US$1 bil­lion.

“The ques­tion is, will that suc­cess be an­chored in Trinidad and To­ba­go—or will our tal­ent con­tin­ue to mi­grate to Mi­a­mi, Toron­to, or Mex­i­co City to ac­cess growth cap­i­tal?”

Caribbean Drag­ons is not on­ly a start­up pipeline, but it al­so tar­gets un­tapped op­por­tu­ni­ties in ex­ist­ing in­dus­tries. He ar­gued that lo­cal man­u­fac­tur­ers, ex­porters, and es­tab­lished com­pa­nies can all ben­e­fit from adopt­ing an “in­no­va­tion lens” to re­design process­es, prod­ucts and sup­ply chains.

“When you de­sign for ex­port from day one us­ing in­no­va­tion and de­sign strat­e­gy, you’re not try­ing to retro­fit 10 years lat­er. That agili­ty means you can com­pete much faster in for­eign mar­kets, close the pro­duc­tiv­i­ty gap, and earn for­eign ex­change more ef­fec­tive­ly.”

Sum­mit for Star­tups

It’s against this back­ground that Caribbean Drag­ons will be host­ing IG­NITE 2025, from Oc­to­ber 13 to Oc­to­ber 15, at the Cen­tral Bank Au­di­to­ri­um, Port of Spain.

An­drew Seep­er­sad, head of strat­e­gy & op­er­a­tions at Caribbean Drag­ons, said last year’s sum­mit helped put Caribbean star­tups on the in­ter­na­tion­al map, as a strate­gic part­ner­ship with the British High Com­mis­sion opened doors for founders look­ing to scale in­ter­na­tion­al­ly.

The Sum­mit’s In­vestors’ Work­shop at­tract­ed ma­jor fi­nanciers, many of whom are now eye­ing re­gion­al ven­tures. “Sev­er­al in­vestors are at this time ex­plor­ing start­up in­vest­ments, as part of their al­ter­na­tive port­fo­lios,” Seep­er­sad high­light­ed.

Look­ing ahead, he said Caribbean Drag­ons plans to ex­pand IG­NITE across the re­gion, with Ja­maica or Guyana as pos­si­ble fu­ture hosts as ear­ly as 2026.