CORRUPTION and bureaucracy are impeding foreign investments into TT, said a recent report by the United States State Department, 2020 Investment Climate Statement on Trinidad and Tobago.
It said TT is a high-income developing country with an annual GDP of $23.9 billion, which the International Monetary Fund predicts will fall by 4.5 percent this year due to collapsed global energy prices and the economic impact of covid19.
“TT’s investment climate is generally open and most investment barriers have been eliminated,” said the report, “but stifling bureaucracy and opaque procedures remain.”
The report hailed TT’s stable and democratic political system, its educated workforce, banking and insurance industries, rule of law and independent judicial system.
However it also spelt out the negative aspects of TT’s investment climate.
These were foreign exchange shortages, widespread perception of corruption among public officials, lack of transparency in public procurement, inefficient and complicated government bureaucracy, time-consuming resolution of legal conflicts such as enforcement of contracts, and violent crime.
The report said TT seeks foreign investment and has no laws nor practices to discriminate against foreign investors.
“But some have seen the decision-making process for tenders and the subsequent awarding of contracts turn opaque without warning, especially when their interests compete with those of well-connected local firms.”
Urging more help for administration and dispute resolution, the report lamented a difficulty of doing business. Out of 190 countries, TT ranked at 158 for registering property, 174 for enforcing contracts and 166 for payment of taxes, in a 2020 World Bank report.
While hailing TT’s judicial system as competent, fair and reliable, the report said the court system was very slow, requiring 1,340 days to resolve a contract claim, double the Latin American and Caribbean average.
The report reckoned the TT$ was overvalued by the Government.
“Shortages of foreign exchange, exacerbated by the Government’s maintenance of the local currency at values higher than those which the market would bear, cause considerable delays in conversion into world currencies.”
The report noted a pending withdrawal of US$1.1 billion from the US$5.9 billion Heritage and Stabilisation Fund to support covid19 measures.
“TT has laws to ensure protection of labour rights, consumers, and the environment.
“Enforcement, however, is lacking due to staffing shortages, capacity issues, and a bureaucratic judiciary.”
The report said corruption amongst public officials can be addressed by the Integrity in Public Life Act, Freedom of Information Act, Police Complaints Authority Act and Prevention of Corruption Act, but lamented their “infrequent application” and “lack of thorough enforcement.”
“The laws do not extend to family members of officials or to political parties. TT does not have laws or regulations to counter conflicts of interest in awarding contracts or government procurement.”
However the report said the Government has helped develop non-binding corporate governance standards to encourage private companies to establish internal codes of conduct to prohibit bribery of public officials.
“There are no protections for NGOs involved in investigating corruption,” said the report, “but investigations are not feared since corrupt actors are rarely punished.”
The report concluded, “US firms often say corruption is an obstacle to FDI (foreign direct investment), particularly in government procurement, since TT’s procurement processes are not transparent.”