GEISHA KOW­LESSAR ALON­ZO

T&T busi­ness­es say they are be­ing squeezed on all fronts—soar­ing crime-re­lat­ed costs, a stub­born for­eign ex­change crunch and ris­ing eco­nom­ic un­cer­tain­ty.

Yet the gov­ern­ment’s $2.92 bil­lion mid-year bud­get in­jec­tion has of­fered lit­tle com­fort.

On Tues­day, the Busi­ness Guardian so­licit­ed the views of eight busi­nes­sown­ers from El Do­ra­do to Aranguez on the state of their busi­ness­es against the back­ground of the Mid-Year Bud­get Re­view. Most of those in­ter­viewed said the cur­rent ad­min­is­tra­tion’s fis­cal poli­cies said the mea­sures risk push­ing al­ready vul­ner­a­ble firms clos­er to col­lapse, ar­gu­ing the re­view de­liv­ers lit­tle tan­gi­ble re­lief.

Still, some voic­es with­in the pri­vate sec­tor are more mea­sured, de­fend­ing the ad­min­is­tra­tion as it grap­ples with deep-root­ed struc­tur­al chal­lenges, us­ing liq­uid­i­ty sup­port to keep the econ­o­my from fal­ter­ing.

The fis­cal dis­con­nect: A deficit of strat­e­gy

For many sea­soned op­er­a­tors the habit of re­turn­ing to Par­lia­ment mid-year for sup­ple­men­tary fund­ing rep­re­sents a fun­da­men­tal break­down in na­tion­al fi­nan­cial plan­ning.

Robin Ojeer com­pared the state’s cur­rent bud­getary habits to a dan­ger­ous­ly mis­man­aged pri­vate en­ter­prise, ques­tion­ing how long the pub­lic purse can sus­tain this cy­cle.

“I think most peo­ple look for­ward to the bud­get, and all of a sud­den now we start­ed to hear about the mid-year re­views where the gov­ern­ment is com­ing ba­si­cal­ly to ask for a per­mis­sion to get more mon­ey to put us in more deficit.”

Ojeer, a su­per­mar­ket own­er in El Do­ra­do, framed the is­sue by ap­ply­ing ba­sic com­mer­cial log­ic to the State’s ac­tions.

“If I want to go to Re­pub­lic Bank, I’m go­ing to ask them for more mon­ey to in­put in­to my busi­ness, and I don’t have any way to pay back, Re­pub­lic Bank is go­ing to say no. They’re not go­ing to help me. But the gov­ern­ment comes out and they go to Par­lia­ment and they re­quest more mon­ey.”

This re­cur­ring fis­cal ad­just­ment, Ojeer not­ed, high­light­ed an in­abil­i­ty by the coun­try to live with­in fore­cast means, an op­er­a­tional lux­u­ry that every­day busi­ness own­ers sim­ply do not have.

He con­tend­ed these mul­ti-bil­lion-dol­lar in­jec­tions are yield­ing no vis­i­ble re­turns for the re­al econ­o­my, leav­ing lo­cal com­mer­cial hubs stag­nant.

“If you come to a mid-year re­view and you tell me what you have ac­com­plished, I would ap­pre­ci­ate that. But I’m not see­ing any­thing ac­com­plished. The econ­o­my is gone and de­pressed and we’re not see­ing that kind of com­mer­cial ac­tiv­i­ty any­more.”

Sti­fled cap­i­tal and the cost of crime

Ojeer’s bleak as­sess­ment of struc­tur­al stag­na­tion is close­ly mir­rored by Sie­u­nar­ine Ku­mar Har­dath, di­rec­tor of Har­dath Gen­er­al In­sur­ance Con­sul­tants Ltd in Ma­coya.

He point­ed out that the struc­tur­al me­chan­ics of do­ing busi­ness lo­cal­ly are sys­tem­at­i­cal­ly drain­ing the pri­vate sec­tor’s work­ing cap­i­tal, specif­i­cal­ly point­ing to de­layed tax re­im­burse­ments.

“Ease of do­ing busi­ness is a sub­stan­tial hin­drance,” Har­dath ex­plained, adding,”The lack of time­ly VAT re­turns is a sub­stan­tial hin­drance to busi­ness­es be­cause you are freez­ing the work­ing cap­i­tal of busi­ness­es. Eco­nom­ic growth could be sti­fled based on that.”

Be­yond ad­min­is­tra­tive de­lays, Har­dath em­pha­sised the sheer weight of na­tion­al crim­i­nal­i­ty has evolved in­to an un­sus­tain­able, un-bud­get­ed op­er­a­tional tax on cor­po­rate sur­vival.

Ac­cord­ing to Har­dath, this se­cu­ri­ty cri­sis cre­ates an in­vis­i­ble, heavy drain on prof­itabil­i­ty that trick­les di­rect­ly down to the cit­i­zen­ry.

“It is an un­der-the-shore cost. You have to have cam­era sys­tems, record­ing sys­tems, alarm sys­tems, and some­times peo­ple have to em­ploy pri­vate se­cu­ri­ty. Those ad­di­tion­al fees, those costs, at the end of the day, the con­sumer has to pay.”

He ar­gued that the State’s his­tor­i­cal re­liance on en­er­gy rev­enues has de­layed vi­tal eco­nom­ic re­struc­tur­ing.

“Our econ­o­my is pri­mar­i­ly based on two things: oil and gas, and pri­vate sec­tor busi­ness, most­ly ex­port busi­ness. I think that he should have fo­cussed a lot more on that. We can­not con­tin­ue to be de­pen­dent on oil and gas. The econ­o­my has to be trans­formed where it is the non-en­er­gy pri­vate sec­tor ac­count­ing for 75 per cent of in­come. The Gov­ern­ment, suc­ces­sive gov­ern­ments, have not fo­cussed enough on the de­vel­op­ment of busi­ness.”

Emp­ty store­fronts and bro­ken con­fi­dence

For mer­chants op­er­at­ing with­in re­tail cor­ri­dors, the macro-eco­nom­ic down­turn has trans­lat­ed in­to a harsh bat­tle for ba­sic ten­an­cy.

Ibrahim Ali, the own­er of Black Ju­bilee Mall, San Juan, ex­pressed con­cern over the com­plete ab­sence of tar­get­ed state in­cen­tives to keep lo­cal shops alive.

“Every­body will tell you how bad this econ­o­my is, and it’s get­ting to a state where ten­ants can­not pay their rent. A lot of peo­ple will leave their busi­ness­es and close up shop,” Ali stat­ed frankly, not­ing that a healthy econ­o­my re­quires the State to ac­tive­ly in­cen­tivise lo­cal en­tre­pre­neurs to in­vest their own wealth back in­to their op­er­a­tions.

“We would have liked to re­al­ly see the Gov­ern­ment fo­cus on the busi­ness sec­tor to get them to rein­vest, get them to get their em­ploy­ees go­ing, and that would have helped over­all in a more vi­brant econ­o­my. We are ask­ing that the Gov­ern­ment come out with some in­no­v­a­tive ideas that will help to re­vive this dy­ing econ­o­my.”

The per­sis­tent lack of eco­nom­ic move­ment has led some long-stand­ing busi­nes­sown­ers to com­plete­ly give up on the promise of state-dri­ven eco­nom­ic re­lief.

Moasi Charles, co-own­er of RAS In­ter­na­tion­al, a part­ner­ship re­tail busi­ness, ad­mit­ted that the con­stant pres­sure has forced him to tune out po­lit­i­cal an­nounce­ments al­to­geth­er.

“To be hon­est, I re­al­ly give up in the sense with pol­i­tics. I have re­al­ly giv­en up on that,” Charles con­fessed. “I didn’t just come out and try to do my thing be­cause at the end of the day, it didn’t re­al­ly have any­thing in­ter­est­ing for me.”

Charles stressed that small, in­de­pen­dent stores are en­tire­ly de­pen­dent on a work­ing class that is cur­rent­ly fac­ing se­vere fi­nan­cial strain say­ing,

“A lot of peo­ple not work­ing and a lot of peo­ple strug­gling and we re­ly on peo­ple to sup­port us,” Charles said.

Forex choke­hold on the Grass­roots

The most press­ing sys­temic bar­ri­er cit­ed across the en­tire pri­vate sec­tor re­mains the se­vere short­age of for­eign ex­change (forex).

Ja­mal Mar­tin, own­er of a tech-ori­ent­ed com­pa­ny, not­ed that while the mid-year bud­get serves as an in­di­ca­tor of pub­lic pol­i­cy, it miss­es the mark on T&T’s en­tre­pre­neur­ship in­fra­struc­ture.

“It could lead to tremen­dous op­por­tu­ni­ties that could be ben­e­fi­cial to the gov­ern­ment,” Mar­tin ob­served re­gard­ing the broad­er scope of fis­cal plan­ning. “Mid-year is a sig­nal by the Gov­ern­ment what it in­tends to do go­ing for­ward. There is op­por­tu­ni­ty for us to do more with­in the lo­cal econ­o­my.”

How­ev­er, Mar­tin quick­ly added that these lo­calised op­por­tu­ni­ties are rou­tine­ly brought to a halt by in­ter­na­tion­al pay­ment con­straints.

“While the Gov­ern­ment is try­ing, there are ar­eas like for­eign ex­change where more needs to be done, es­pe­cial­ly when it comes to stim­u­lat­ing the ac­tiv­i­ties of lo­cal en­tre­pre­neurs.”

For mi­cro-en­tre­pre­neurs on the ground, the forex short­age is not an ab­stract fi­nan­cial met­ric—it is an op­er­a­tional wall.

Moe­sha John, a bou­tique own­er in San Juan, pro­vid­ed a de­tailed in­sight in­to how these fi­nan­cial re­stric­tions sup­press small busi­ness­es.

“The num­ber one thing is mak­ing it eas­i­er for small peo­ple that want to start busi­ness­es,” John as­sert­ed. “Make it easy for them to get loans to start their busi­ness­es. The amount of stuff you need to start to go to the bank is kind of ridicu­lous.”

John ex­plained that even se­cur­ing stan­dard point-of-sale bank­ing tech­nol­o­gy re­quires clear­ing ma­jor hur­dles.

“When you have to get as sim­ple as a LINX ma­chine you have to have like 10 months to show that you have an in­come com­ing in,” she added.

The true cri­sis, John not­ed, oc­curs when try­ing to source in­ven­to­ry from in­ter­na­tion­al sup­pli­ers with­out ac­cess to US cur­ren­cy or cor­po­rate cred­it fa­cil­i­ties.

When asked whether the cur­rent ad­min­is­tra­tive in­ter­ven­tions are ef­fec­tive­ly ad­dress­ing the root caus­es of the forex cri­sis, John was de­fin­i­tive say­ing, “I think they need to try a lit­tle hard­er. The small man is feel­ing it at the end of the day.”

Call for struc­tur­al al­ter­na­tives

To break this cy­cle of im­port­ing fin­ished goods and drain­ing for­eign re­serves, there is an ur­gent de­mand for a ma­jor re­vival of do­mes­tic in­dus­tri­al ca­pac­i­ty.

Ojeer point­ed di­rect­ly to the con­tin­u­ous clo­sure of heavy en­er­gy in­fra­struc­ture as a prime dri­ver of the coun­try’s mul­ti-bil­lion-dol­lar for­eign cur­ren­cy drain.

“I think the re­fin­ery is one of the biggest things they should be try­ing to get up and go­ing,” as he fur­ther put for­ward what he felt the fi­nance min­is­ter should have ad­dressed in his pre­sen­ta­tion.

“It means that we don’t have to im­port gaso­line any­more, and this prob­lem that we are hav­ing of lack of the US mon­ey.”

Sim­i­lar­ly, Ibrahim Ali own­er of Black Ju­bilee Mall, San Juan point­ed to­ward struc­tur­al man­u­fac­tur­ing as the on­ly vi­able path to earn­ing for­eign cur­ren­cy rather than mere­ly ra­tioning it.

“If the oil and gas in­dus­try is not what we want at this time, we are hop­ing there are oth­er sec­tors that will stim­u­late some for­eign ex­change. Man­u­fac­tur­ing could be pro­gressed to a point where you en­cour­age some ex­ports, so you earn for­eign ex­change to be able to spend it.”

Sta­bil­i­sa­tion and pub­lic liq­uid­i­ty

In sharp con­trast, voic­es like Aleem Mo­hammed, chair­man of ALM In­sur­ance Ser­vices, strong­ly de­fend­ed the State’s cau­tious fis­cal ap­proach, urg­ing the pub­lic to con­sid­er the mas­sive li­a­bil­i­ties in­her­it­ed by the Trea­sury.

“We took a look at the whole econ­o­my, the trea­sury, the min­istries, the dif­fer­ent things that are hap­pen­ing. And if you look at all the min­istries, state en­ter­pris­es and all we were pressed and we had a lot of ex­pens­es...Noth­ing is overnight.”

This fo­cus on struc­tur­al sta­bil­i­sa­tion was shared by Safraz Ali, a di­rec­tor of the Agri­cul­tur­al So­ci­ety of T&T (ASTT).

From his per­spec­tive, the mid-year bud­get’s de­ci­sion to in­ject cap­i­tal di­rect­ly in­to pub­lic sec­tor salaries acts as an in­di­rect stim­u­lus pack­age for do­mes­tic food pro­duc­ers and grass-roots ven­dors.

“The Prime Min­is­ter is do­ing in terms of she is try­ing her best to en­cour­age in­vest­ments and so on in the coun­try,” Ali stat­ed as he ex­plained that the mid-year sup­ple­men­tary funds al­lo­cat­ed to salary ad­just­ments would rapid­ly con­vert in­to con­sumer spend­ing with­in lo­cal mar­ket­places, stat­ing, “...Be­cause now peo­ple have more dis­pos­able in­come to buy goods and so on. So in that way, it gen­er­ates eco­nom­ic ac­tiv­i­ty.”

Frag­ment­ed per­for­mance re­view

This deep ide­o­log­i­cal di­vide is re­flect­ed in the vast­ly dif­fer­ent per­for­mance grades as­signed to the Min­istry of Fi­nance by dif­fer­ent sec­tors of the busi­ness com­mu­ni­ty.

Har­dath, bal­anc­ing the im­mense dif­fi­cul­ty of the State’s fi­nan­cial po­si­tion against the needs of the pri­vate sec­tor, of­fered a mod­er­ate eval­u­a­tion.

“The Gov­ern­ment is chal­lenged in terms of eco­nom­ic ac­tiv­i­ty of the coun­try and get­ting mon­ey,” Har­dath ob­served, giv­ing the min­is­ter a per­for­mance rat­ing of 7.5 out of 10.

Ojeer, look­ing at the sit­u­a­tion from the per­spec­tive of an in­de­pen­dent busi­ness­man see­ing lit­tle re­turn on state ex­pen­di­ture, was far less for­giv­ing, as­sign­ing a flat grade of five out of 10.

“He is work­ing with as lit­tle as he has claimed to have, and we hope that some­how, here or there, they will get a han­dle on things and ac­tu­al­ly de­liv­er on what they promise,” Ojeer re­marked.