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Interview with
Hon. Patrick Manning
Prime Minister and Minister of Finance of Trinidad & Tobago
February 15th, 2002
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Most
experts on the Trinidadian political economy agree that consecutive
governments over the last 10-15 years in Trinidad have been very pro-business
and pro-investment. Nevertheless, there has been a political transition in
TT for 15 months now. You have been very adamant to stress that the
current Trinidad political uncertainty will not result in an economic
crisis. Could you explain to our readers what you meant by this?
It
is a political situation. The population elected 18 members from each side.
We are trying to have some discussions that will result in allowing the
Parliament to function in the traditional way. However, there is a
government in place, appointed by the President to break the elections
deadlock; and the exercise of the executive authority is taking place on a
daily basis by the appointed government. There are some constraints in
terms of the ability of the Parliament to meet, because it must meet by a
certain time. But, you will find out that as things go along, it is not
the crisis people are trying to suggest that it is. Yes, we are going
through a period of political uncertainty, but it has not made the country
unstable in any way. The investment climate remains as propitious today as
it has ever been, and in fact it should even be enhanced by some of the
policies that we are now initiating to take the country forward.
The
political situation will eventually result in another general election,
and we expect that in time it will rectify itself. In other words, we
always have that option available to us. If we believe that things are
getting out of hand, which we do not anticipate, we always have the option
of a general election. At any rate, we are committed to a new general
election by July of next year.
Investors
would like to see the prolongation of pro-business policies, and the
maintenance of economic stability in Trinidad and Tobago. Are you in close
contact with the business community on the political issue, and its
economic consequences?
Yes,
we have been in touch with the local business community as well. You must
remember that we are a new government. We just got back into government. I
was appointed Prime Minister on Christmas day. But, yes, we have gone in
and we are in touch with the business community as we seek to maintain the
continuity. Trinidad & Tobago remains as welcoming to investment as it
has ever been, and in fact it remains as attractive a destination for
investment dollars as it has ever been.
In
your party's Manifesto, one of your government's primary objectives is
said to be increased local, regional and global competitiveness. With this
in mind, which measures does your government have in mind to increase
global competitiveness of local business and to attract foreign investment
to the country?
First
of all, I must tell you that this is my second time as the Prime Minister
of Trinidad & Tobago, and in the first occasion between 1991 and 1995,
we spearheaded a package of measures designed to make the economy more
competitive. The critical one that we implemented then was the floating of
the Trinidad & Tobago Dollar. It was our government that did that. It
was a very courageous thing to do, and it was done against the advice of
all the economic pundits at the time. But, notwithstanding, we did it. And,
today, when we look at the foreign exchange reserves of the country, it is
clear to all that that was perhaps the most significant move made in
making Trinidad & Tobago the investment destination it is today.
The
next stage we are going into will be tax reform. We are committed to
reducing the income tax levels, and the corporate tax levels, very
significantly. In fact, we are committed to reduce by 5% points in this
budget. Now, unfortunately the Parliament has not yet met. We are five
months now into the financial and fiscal year. It is unlikely therefore
that we will make that change so far into the year, but that we will
certainly make it when the budget comes up in the next fiscal year,
beginning October 2002. While we will do that, it is only an initial step.
We are aiming to reduce corporate tax as low as possible. We are aiming at
as low as 20% and we are prepared to go even lower than that. (We also
have Value Added Tax in Trinidad and Tobago, up to 15%.)
Trinidad
and Tobago can boast a wide range of qualities that make the country
attractive to foreign investors. Your government has pledged to market
Trinidad and Tobago's competitive advantages. Could you therefore
outline Trinidad and Tobago's competitive advantages to our readers?
The
first we have is the educational level of our population. Our literacy
rate is well above 95%; this is very unusual for a developing country.
Most people would look at the Caribbean as essentially a tourist
destination and market, but Trinidad and Tobago is different. We have
reserves of oil and natural gas, which make us very different from
everyone else. In fact, consider our reserves of natural gas: the revised
figures for natural gas suggest that our total reserves amount to a
hundred thousand million cubic feet. That is a lot of natural gas for well
into the future. Whereas there is always talk about natural resources
running out, BHP have just had an oil discovery which will peak at a
hundred thousand barrels a day by the year 2005.
It will virtually double our oil production.
There
is another important issue here, which is the Atlantic LNG project.
Train One is on stream, Trains Two and Three are under construction
and the third Train will be on stream by the first quarter of next year.
We are now talking about Trains Four, Five and Six. We want to initiate
construction of a mega-methanol plant that will use 164 million cubit feet
of gas a day. We are about to start that. When the initial ammonia and
methanol plants were set up, they were using about 40 to 50 million cubic
feet. These are significant developments, very significant indeed.
So as we look at the future and our projected revenue position what
we are seeing is enhanced revenues from increased oil production and
significant revenues from natural gas because of LNG exports, and also
more domestic consumption because more and more plants are being set up
here.
Of
course, there will be infrastructure development for further investments.
That will be critical. We will ensure that Trinidad and Tobago
maintains a cutting edge in education, particularly in technical education,
which has implications for the employment of our people to operate all
these technical industries we wish to bring here. Also significant is the
fact that Trinidad and Tobago is the largest exporter in the world of
Ammonia and Methanol, and the industrial estate at Point Lisas is the
largest in this part of the world.
There
is been much talk about the diversification of the economy, and the need
for Trinidad and Tobago to diversify the country's economic risk factors
by increasingly generating also non-oil and gas related sources of income
revenue. To this end, which sectors of the local economy are you targeting?
Diversification
of the economy does not mean that we will not try to maximize the returns
oil and gas while we seek to go into other industries. Light manufacturing
for a start.we are about to embark on a major 'industrial estate' in
Wallerfield, where we will be targeting the creation of 50,000 jobs in a
20-year period. May I also say that as Trinidad and Tobago has become well
known as 'a stable democracy in the Western Hemisphere producing gas at
low cost', we're now a very attractive location for gas-based
industries. We are about to embark on an initiative that will make T&T
a low-cost electricity producer,
and thereby qualify us not only for aluminium but also for metal-processing
as a whole-not just plants but industries associated with this. In addition we are beginning investigations into an
idea we have been pondering over: to pipe natural gas across the Caribbean,
with Puerto Rico as a major destination and in due course Cuba!
Plus we'll be able to supply gas to the different islands along
the way there.
This
reflects T&T's change in foreign policy and our relation to the rest
of the Caribbean. CARICOM is the second largest market for T&T
industries; the T&T market is the largest market within CARICOM.
The development of our country is tied to the development of the
Caribbean; it is symbiotic. As a consequence, our foreign policy in the
future is going to reflect that, as we are now more and more looking at
CARICOM as part of our domestic market.
You
talk about the diversification of the economy, and the increasing
importance of the tourism sector. Certainly, this sector has still much to
offer to Trinidad and Tobago economic development. How do you plan to reap
the benefits of Tourism's potential?
Trinidad
and Tobago is behind all the other countries in the region in terms of
Tourism. This is so because we never gave it priority - because we
always had oil and natural gas. Now that we are moving in a certain
developmental direction, we are able to focus on Tourism in a way that
avoids any major pitfalls and the mistakes that other countries may have
made. We have the benefit to look at their mistakes, and then decide our
own course of action. Tobago is heavily tourist oriented, and we are also
going to have a level of Tourism in Trinidad. But it is all going to take
into account our environment and the fragile ecology we have in certain
parts of this country. Tobago, with its pristine beaches, splendid
undersea wonders, its aura of peacefulness and pleasantness, is an ideal
holiday resort not spoilt by over-development or even over-popularity.
We will want to keep it so.
The
increased prominence of diversification can generate a multitude of
interesting opportunities for investors. Could you highlight different
investment opportunities to our readers, and which incentives do you offer
to them?
The
government is new (not quite three months even as we speak!) and the
government is just about to consider in detail all the options and actions.
However, we already know that light-manufacturing, high-tech industries,
downstream industries from the availability of natural gas, ammonia,
methanol, iron and steel and the introduction of new industries based on
aluminium and other metals, those are the new areas we see as
opportunities. Of course we are going to develop the service industries in
the country . for instance, there is an industry that can develop based
on superior health-care facilities.
You
mentioned CARICOM. In today's world this sort of market integration is
very popular; look for example at the European Union and NAFTA. Could you
indicate your government's commitment to multilateral cooperation
agreements, and the specific significance of CARICOM?
The
last time PNM was in power I was the first chairman of the CARICOM bureau,
which was established. We identified market access for CARICOM products as
a major priority. What we did was to get CARICOM to agree that Trinidad and
Tobago would spearhead that effort. We
began negotiating market access all over the region, starting with
Venezuela, and then going on to Colombia. We are also negotiating inside
and outside of CARICOM in what we call IPP arrangements-Investment
Promotional Protection arrangements.
In
your Manifesto you pledged to increase the role of Trinidad and Tobago
within CARICOM. Does this mean that you consider this role to be lagging
behind?
No,
it is related to our realisation of the importance of CARICOM to us, and our
importance to CARICOM. CARICOM is the largest market outside the
United States for the output of Trinidad and Tobago industry. Trinidad and
Tobago is the largest market in CARICOM, so we depend heavily in CARICOM
and they depend heavily on us. To
repeat, this is going to be reflected in our foreign policy.
The
potential of Trinidad and Tobago to lead the economic development of the
Caribbean is indeed instantly recognizable. Are you confident that
Trinidad & Tobago live up to its potential and become the hub of the
Caribbean?
We
are positioning ourselves as the business and financial centre of the
Caribbean, and as the gateway to the Americas (North and South America)
and Europe.
What
message would you address to potential investors looking at T&T?
They
will be hearing much more about Trinidad and Tobago in the not too distant
future. There are some
developments in the world - especially the rise of terrorism in North
America - that can affect Trinidad and Tobago as a destination. Recently,
I saw that the Americans have again cautioned about possible impending
attacks based on the interrogation of some hostages at Guantanamo Bay in
Cuba. We would of course prefer that no such thing would happen. However,
if investors begin to feel more and more uneasy, they may find Trinidad
and Tobago to be 'a stable democracy in the Western Hemisphere, close to
the major markets of North America, South America and with access to
Europe, with our energy resources and our population's level of
education, an ideal destination for their investment dollars'.
One
of the many charms of Trinidad and Tobago is undeniably Carnival, and the
devotion of the population of the islands to this annual event. But, this
and the other events organised on the islands can also have an economic
value to the country, especially in respect of the tourist industry, where
it could be of great importance. Which role then does the famous Trinidad
& Tobago Carnival and other events play in creating a favourable
investment climate?
Our
Carnival may not be as well known as the Carnival in Rio, but I assure you
it is 'better'. We are understandably very proud of the Trinidad &
Tobago Carnival.the creativity, the happiness and the beauty that all
emerge especially at that time.
The
unique ethnic mix you get in this country produces an almost unbelievable
natural beauty in our womenfolk. To digress deliberately, the 1977 Miss
Trinidad & Tobago was Miss Universe, in 1985 a Miss Trinidad &
Tobago was Miss World, and in beauty competitions up until 1995 we may not
have been No.1, but our girls were always finalists. Having fun chatting
with some businessmen in Hong Kong in 1995, I told them that I would not
be surprised if T&T won another beauty title soon. About two years
later, our contestant won the Miss Universe title!
While
that's not an aspect that investors normally hear about, or for that
matter care about, it adds a
charm and 'attractiveness' to us. And it makes dropping by, to visit
or invest, so much more enjoyable.Why not?
We
also enjoy, because of our cultural mix, a number of 'festive' events
you'd hardly find in other countries of the world. We have a Hindu
festival of lights, 'Diwali', that we all observe.and it literally
delights people who have never seen it before. We have the Muslim festival
of Eid, equally vigorously celebrated across the country.
At
Christmas we have Parang, reflecting our Spanish ancestry and influence;
and there's "Creche", telling the story of the Nativity in song,
dance and musicianship using a French patois!
It
was in Trinidad & Tobago that the Steelpan was invented - the only new
percussion musical invention of the 20th and 21st Centuries. You can see and hear it all over the world now, but it was
created here. Recently, we had an International Steel band Festival, with
the involvement of bands from Europe and America. Meanwhile, even I am
amazed to recognize how the Pan is so developed that it has gone beyond
being mere entertainment to evolve intriguingly into an industry of its
own.
Years
ago, our marketing people used to sell our twin islands as:
Trinidad.the
Terrific; Tobago..the Tranquil,.
With
the progress we have been experiencing for sometime now, we may easily be
renamed Trinidad the Developing, Tobago the Delightful! Trinidad
and Tobago as a single, and singular, country simply has a lot to offer to
all investors.
You
have been politics for a long time, and therefore bring with you a baggage
of experience. With this in mind, and on a final note and more personal
level, could you highlight to our readers your professional background,
and what will be your next challenge in the years to come?
First
of all, I have an academic background in Geology, but I also spent one
year as a refinery operator, which is as significant in my own personal
development as my degree in Geology. And, I worked in a producing division
of Texaco Trinidad Inc. I became a Member of Parliament in 1971, which
means that I have served 30 consecutive years as a Member of Parliament. I
am now the longest ever-serving member of the Parliament in Trinidad &
Tobago. My practised profession is politics therefore, as a Member of
Parliament. I have served in almost every major capacity in successive
governments under different leaders. I have been Leader of the Opposition
on two occasions, and Prime Minister on one occasion, leader of the party
the PNM from 1987 until now.
It
appears to be a fairly sizable challenge to govern Trinidad & Tobago
again. But, it is a challenge for which I am very well prepared. I have
been preparing for this for some time. I have come out of six years in
Opposition, and we have used that six-year-period really to assess our
period in government before that (1991-1995), to see what we did right, to
see what we did wrong, to study the experiences of other countries, to
study experiences of leaders in Trinidad & Tobago prior to us, and to
study the experiences of leaders of Trinidad & Tobago in the period
1995 to today. On that basis, along with a host of other relevant macro
and micro factors, we formulated our positions on how we would govern.
This
country has a defining characteristic in our diversity. It is our
outstanding strength, but also is our foremost potential Achilles heel. We
are a population that is roughly 40% of Indian descent, roughly 40% of
African descent, 18% is 'mixed', and the remaining 2% comprises
'local whites', Syrian-Lebanese, Chinese, Europeans, et al. That
diversity brings with it a coalescing of many cultures, and that in turn
brings challenges. Fortunately it also presents opportunities.
We intend to face the challenges and capitalise on the opportunities.
Note: WINNE cannot be held responsible for the content of unedited transcriptions.
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