In March 2017 the Economic Development Advisory Board (EDAB) presented a draft Diversification Strategy and Roadmap which is intended to articulate the Vision 2030 Development Strategy and Plan formulated by the Ministry of Planning and Development. The Diversification Strategy and Roadmap arises from a recognition that the negative economic impact of the sharp fall in oil and gas prices since mid-2014, as well as the decline in the production of both crude oil and natural gas, makes it imperative that this country develops alternative sources of foreign exchange earnings.
The goal advocated for the Diversification Strategy and Roadmap is to achieve 40 per cent of total exports in 2030 as non-energy exports, that is, excluding crude and refined oil, LNG and petrochemicals but inclusive of services exports. Trinidad and Tobago is currently at about 15 per cent non-energy exports and preliminary projections suggest that non-energy exports will have to grow at an average annual rate of about ten per cent to achieve that target. EDAB identified seven industries that would be targeted for growth. These include food and beverage manufacturing sector, digital platforms and ICT-enabled services, maritime aviation, creative industries, energy services, tourism and nearshore financial services.
Currently, the Trade and Industry Ministry is seeking to boost the maritime industry, which it sees it as one of the non-energy sectors with potential to contribute to economic diversification. The Ministry views yachting services as a significant opportunity, given that Trinidad lies below the hurricane belt, and has world-class yacht repair, maintenance services, and storage capability. The Ministry is currently collaborating with the industry to develop a yachting policy 2017-2021 that will include a review of regulations and legislation, facilitation of entry and departure from TT, through the use of a single form, customer service training, and the implementation of standard operating procedures for border agency officers at ports of entry. The plan also aims to improve the infrastructure of the yachting sites, certification of the human resource base, and a marketing and promotional plan to promote the sector internationally and locally.
On the other hand, transportation shortages are taking a toll on Tobago’s tourism industry. Trinidad and Tobago’s ferry crisis, which escalated with the collapse of the sea bridge in May when the TT Express developed mechanical problems, has forced some hotels in Tobago to put staff on a three-day workweek, according to the Tobago Hotel and Tourism Association. Trinidad and Tobago nationals account for 80 per cent of tourism in Tobago, and the Seabridge problems are gravely impacting the sector. The inter-island transportation shortage has caused a decline in guesthouse occupancy to 22 per cent. Hotels are running at 34 per cent occupancy, with breakeven an estimated 52 per cent. Regional occupancy meanwhile stands at 68 per cent. The hotel sector has lost US$3.7m since the onset of the ferry crisis, prompting hotel operators to require clients to state if they have an airplane or ferry ticket before booking the reservations. Hired car operators and restaurants have been hit hard also. Operators are now facing possible delays in payments of their utility bills and bank loans. The recent spate of hurricanes that have been inundating the Caribbean islands have severely crippled the economies of some and completely destroyed others.
The Caribbean, however, is still a prime destination for tourists from colder climates. There is opportunity here for the tourism sector of Trinidad and Tobago, especially since it has been identified as a sector that will assist in diversifying the economy. If we ever hope to be serious about our economic growth as a nation, diversification, paying attention for example to maritime issues could prove advantageous at this time, with short term gain a real possibility. Developing a maritime strategy should be considered.
This editorial appeared in this week’s Business Day.