Bharath moves to solve trade issues
By Miranda La Rose Thursday, August 2 2012
TRADE, Industry and Investment Minister, and Minister in the Ministry of Finance, Vasant Bharath has assured Trinidad and Tobago Manufacturers Association (TTMA) that he can solve some trade and investment problems that still exist from the time he was a TTMA board member in the mid-nineties.
The problems include issues of customs and excise inefficiencies, indistinct procedures in the importation of food and drugs, lack of a promotional one-stop-shop for investments, lengthy delays in value added tax (VAT) returns, and slow investment approval regimes.
“It is not that governments have not known about them. There has never been the will to resolve the issues,” Bharath told TTMA members at a coffee morning last Wednesday (July 11) at the Hyatt Regency, Port-of-Spain. “I’m aware, that you’re not looking for handouts, or any more incentives,” he said, “but you need the pathway clear to be able to conduct your business.”
It was unacceptable, he said that TT was ranked 126 out of 142 countries worldwide in “the burden of customs procedures” in recent Global Competitiveness Index. To create an environment for locals and foreigners to be able to do business easily, he said “we need to take some radical decisions in treating with customs and excise.”
As Minister in the Ministry of Finance, he said, he met recently with the Comptroller of Customs and the relevant parties to get an understanding on the problems hindering the full implementation of ASYCUDA (Automated System for Customs Data) system with the purpose of resolving them in the shortest possible time.
“What I want to assure the TTMA is that I will ensure the ASYCUDA system is linked to the ‘Single Electronic Window’,” Bharath said, to reduce the lengthy waiting time for the processing of customs data entry. “Rest assured,” he added, “I clearly understand the problem relating to this matter. I can assure you that the process of overhauling and re-engineering the entire trade facilitation panache is on the top of my list.”
Indistinct procedures taken by the Food and Drugs Department on imports over the last “several years” have created many problems for trade including the local private sector which has been “blamed as protectionist” and resulting in trade imbalance within Caricom, he added.
In this regard he has written to Health Minister Dr Fuad Khan under whose portfolio the Food and Drugs Department falls. He is also to take a note to Cabinet to deal with this matter.
Bharath is due in Jamaica this week to meet with his Jamaican counterpart to address the trade imbalance issue. Lengthy delays in VAT and quarterly corporation refunds, he noted, was another bone of contention for manufacturers who have waited for as long as eight months to one year for refunds.
Describing the payment of VAT in advance as anti-export as manufacturers “cannot charge VAT when you export”, he said, “My intention is to advocate for a maximum of 90 days to get refunds of VAT for manufacturers.” On issues of investment, he said there are a number of issues for investment facilitation which must be alleviated if Government must see domestic investments in the local economy.
At present, TT has three ministries and several agencies tasked with investment promotions.
“I believe that this approach is at best naive. It dilutes the focus and the resources of the State,” he said, “and often causes confusion among investors as to where they go to do business in TT.”
E-Teck — which manages InvestTT and the industrial parks, he said was being proposed as the lead agency to handle all local and foreign investment enquires in TT. InvestTT would have to be strengthened institutionally he said to handle that mandate.
Another issue was accessing lands for commercial investments. When he was Minister of Food Production, Land and Marine Resources, he said many business people came to him requesting lands for commercial use. E-Teck has that responsibility. At present, he noted E-Teck has 318 tenants in 18 industrial sites. Many have not taken up, or done anything with the lands. A number of lessees, he said have been utilising the land for purposes other than which they were granted.
“That too creates problems. E-Teck has now started, after being mandated to look at all of these leases, and to bring the lessees in line with what the lease agreements were signed for.”
Many of the leases date back to 25 to 30 years ago. Where breaches occur, he said, “We want to bring the lessees in line. For those who are not using the lands we will give them an opportunity to do something with them, if not, we’re going to take them back and reallocate them.”
In addition, Bharath said, Government was “giving serious consideration to increasing the leases from 30 years to 99 years.” In some of the industrial sites some lessees have 30 year leases and some for 99 years. “What we want to do is to bring all in line to have that level of predictability, to build your businesses, invest in capital equipment, buildings and you have that comfort for 99 years.”
To increase land space for commercial investment, he said he was working with Planning Minister Dr Bhoe Tewarie in the land use development plan. This plan is to be made available to Cabinet by September.
He was also prepared, he said, to ask the Planning Ministry to re-examine the current model where the state was solely responsible for developing the lands, and to allow the private sector to develop industrial parks as has been done in other economies.
On issues of investment, Bharath said, “Very much like the trade clearance process, the investment approval regime, particularly for construction is a nightmare.”
TT is ranked 93 out of 183 under the category dealing with construction permits. In Caricom, St Vincent and the Grenadines is ranked at 6, Belize, 9; St Lucia, 13: and St Kitts and Nevis 16. In this regard, he has approached Tewarie under whose purview the Town and Country Planning Division and the Public Utilities Minister Nizam Baksh under which the TT Electricity Commission falls, and Minister of Water and the Environment, Ganga Singh under whose portfolio the Water and Sewerage Authority and the Environmental Management Agency fall with a view to bringing all the utility and service agencies under one roof as far as approvals are concerned. This would allow for an investor to return for approvals under one roof within a three-month period.
“That, I want to be up and running within three months of me speaking here today (July 11),” he said adding, “It’s unacceptable for any investor, local or foreign, to have to be running from agency to agency, month after month, frustration after frustration, getting angry and eventually giving up.”
On the issue of diversification, he said when a country like TT has become accustomed to depending on one sector of the economy, it was difficult to move away from that.
There are many other sectors, Bharath added that need to be ignited to move away from oil and gas as a source of revenue. In the past, he said too many sectors were given priority for diversification and nothing was ever accomplished.
There was need, he said to focus on about five, eight or ten big things that were transformational in nature. “We cannot do a million things and hope to accomplish all of them. Many of the areas we are currently expending resources in,” he said, “really would have minimal potential for economic growth even if they were successful.”
The ministry, he said will adopt a more strategic approach in how financial and institutional resources were allocated. On issues of local procurement, he said, “I want to assure you that procurement legislation would be enacted this year.”
One of the parliamentary Joint Select Committee’s recommendations, he said is that there should be significant local content involved.
In discussions with Tewarie on local input, he said they agreed that TT’s private sector will always be given first option on all local contracts, but balance must be achieved in terms of development of the private sector and enhanced competitiveness.