Making T&T safe for investors

 

There is a great deal of wisdom in what the UNDP’s administrator said and it is for the Government to study, analyse and document the extent to which T&T’s spiralling murder rate and the creation of an environment of insecurity in this country has had a negative impact on the investment climate. While there have been few studies that look at the relationship between crime and investment in the local context, there is little doubt that there has been a sharp falloff in the number of new projects—and the quantum of new investment—in both the energy and non-energy sectors and by both local and foreign investors in the last four years. This may be mainly due to the prevailing climate of uncertainty and trepidation around the world as a result of the debt crises that developed countries have been experiencing since the sub-prime mortgage debacle in 2007 in the United States. More recently, the economic convulsions being experienced in Europe as a result of the governments of countries like Ireland, Greece, Spain, Portugal and Italy borrowing in excess to finance infrastructure and other development—or being forced to the brink of financial collapse as a result of the adventurism of private sector developers—have also slowed the flow of investment funds. One of the lessons coming out of recent experiences in Europe is that fiscal prudence must be a permanent condition for governments. And this must limit the extent to which the State can contribute to stimulating economic development during periods of decline.

 

While there should be self-imposed limits on the State’s ability to spend its way out of an economic decline—based on the fiscal realities—there should be little limit on the role of the State in eliminating some of the factors that may cause potential investors to think twice about a country like T&T. Among the factors that lie within the State’s role to influence are an improvement in the efficiency of the bureaucracy and a reduction in the incidence of crime and violence to levels that would allow citizens of all stripes to go about their lives free from fear.  The challenge implicit in what Helen Clarke said in Port-of-Spain last week at the launch of the UNDP’s regional study on enhancing citizen security in the Caribbean is that if countries fail to control rising crime levels, they would be jeopardising the economic futures of their populations and the ability of parents to bequeath a higher standard of living to their children.