KIRAN MATHUR MOHAMMED
We are two very small islands. That may sound trite. Yet very often we forget it. Our market size is 105th out of 140 countries in the World Economic Forum’s Global Competitiveness Report. To achieve meaningful growth, we must seek wider markets.
Despite knowing this, most businesses and would-be entrepreneurs focus on our domestic market; and rarely look to neighbouring countries for customers.
There are many explanations for this. Our labour costs are high, and our currency over-valued; making exports relatively more expensive. Transport costs are expensive; the ports slow and tangled with red tape. And when they land in other countries, our goods are often hit with tariffs.
These are real constraints. Yet the simple reality is that if a customer can be convinced to make an order, most of these concerns become secondary. Finding new markets must be our first priority.
What then are the constraints we can immediately overcome? One is the knowledge of outside markets and customer preferences. Second: a lack of connections in new markets. Third, a perceived language barrier- particularly for our large neighbouring South American markets.
In an age as connected and globalised as it is, we should not permit these to limit our vision.
The first is easily solved. Companies can begin by scouring the internet and doing research on the most appropriate markets to enter. They can look up potential buyers and competitors. Typically, most countries state the procedures for imports online, as well as their tariffs.
Of course, there are few substitutes for on-the-ground intelligence. But even if we don’t already have connections in the market, there are a few bodies that can help.
Firstly, ExporTT can provide information about countries with whom we already have trade deals. Next, once we’ve narrowed down the country, we can reach out to that country’s embassy here or our representative there. They are usually quite willing to help with introductions to the business community.
Then there are industry bodies like the chambers of commerce in those countries. Even if we don’t want to “cold call”, we can ask our counterpart industry bodies to reach out on our behalf. Building networks is their job.
Another way is to leverage relationships already built back home. If we already supply a subsidiary of a multinational operating in TT; the conversation becomes much easier when we reach out to another subsidiary abroad.
Banks are also willing to help make introductions. When I was a banker I introduced clients to Colombian and Costa Rican companies; and recently have been invited to conferences on Guyana. They are often willing to help, with the prospects of letters of credit or trade finance in the offing.
Then there is the power of travel itself. Conferences and trade fairs are quick and useful ways to familiarize ourselves with new markets. Even in non-English speaking countries, most businessmen understand English and will certainly not let language get in the way of a good deal. Simply look them up and go.
It is best to work together where we can. Many may not even have heard of TT, so arriving in a block of business representatives grants legitimacy to sellers. Collaboration, and quality standards will telegraph trust to potential buyers.
Standards can take customers’ quality concerns off the table. The World Bank has found that each new internationally harmonised standard is associated with an increase in Chinese agricultural exports ranging between 0.5 to 1.54 per cent. Industry standards have been mainly discussed for agricultural exports like cocoa, but quality standards can benefit other products as well. We should continue pressing for them to be implemented.
The beauty of this approach is that it does not require a lot of money. You don’t need to already be a large multinational to get your foot in the door. The worst risk is that we just end up going on an interesting holiday. And if it pays off and we identify potential clients, then we can go ahead and make the investments locally.
Many companies have already moved forward. Massy has extensive energy and car sales operations in Colombia. Bermudez has a factory in Costa Rica. Many of our manufacturers already derive a significant proportion of their sales from regional exports. Even distributors like Agostini’s have partnered with regional companies like Barbados’ Goddard group.
Far from limiting us, our size forces us to be open and connected. Despite our size we have always been proud. We can extend that patriotism and reclaim our size – and resultant openness – as a new source of pride.
Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh