Trinidad and Tobago Chamber CEO: Renewables, digitisation – pathways to new investments

Ian De Souza, TT Chamber of Industry and Commerce CEO, says economic recovery requires collaboration between labour, Government and the business community. - ROGER JACOB
Ian De Souza, TT Chamber of Industry and Commerce CEO, says economic recovery requires collaboration between labour, Government and the business community. - ROGER JACOB

The idea of shifting to renewable energy was not a bad one, says new CEO of the Trinidad and Tobago Chamber of Industry and Commerce Ian De Souza, but it required a lot of investment and culture change for it to make a difference.

In an interview with Business Day last week, he said while climate change needed to be tackled from a larger perspective and globally, the thrust by small island developing states (SIDS) to play their part and facilitate change was overwhelming.

Since the 2021 UN Climate Change Conference (COP26), focus has been ramped up on reducing and achieving net-zero emissions to deliver action to help vulnerable communities and habitats adapt to the impact change, such as Trinidad and Tobago, as a SIDS.

As part of TT's intended nationally determined contribution (iNDC), the Government has outlined several initiatives in the way of renewables, and while it was an admirable plan, De Souza said it would require a lot of financing and educational campaigns to foster a shift.

“There is always more that can be done with renewables. If we want to go into renewables in the context of the existing technology, there is wind, solar and thermal. The capital investment to go into wind and putting up those wind farms is horrendous, and similarly with thermal. So you can go the route of solar.

“But it will come down to a question of priorities and what is seen as being necessary. We will, and for a few years, continue to enjoy the benefit of a lower cost of energy in TT, and in terms of the allocation of resources, I suspect that may not be a major priority at this time. We want to get there, but there is a capital element to it.”

Having had the experience of working in other SIDS in the region, De Souza pointed to the efforts they made to shift to renewables in the areas of wind and solar energy.

In the Caribbean, largely dependent on tourism, with some exceptions such as TT and Guyana, he said, protecting investments in this area was important to sustain economies and livelihoods.

For TT, he added that the shift to renewables may have to be forced by increasing the costs of fossil energy to facilitate change, but at what cost to the country’s market competitiveness?

“The economies of the islands and the livelihoods of people are affected; remember, they are tourism-oriented. The effects of climate change and the impact of floods, hurricanes, and varying weather patterns put a strain on the insurance system and the cost.

“We (TT) have an energy industry; the cost to the consumers is less because of subsidies. Some of those subsidies, though, need to be rolled back, particularly those to industry. If this happens, then that would change TT’s industrial competitiveness, and the competitiveness that the manufacturing sector would have enjoyed.

“You would literally have to force people that way (into renewables) by making energy that is generated from the fossils expensive, so if it is very expensive to use that sort of energy then there is no choice to go the route of renewables.”

Ian De Souza, TT Chamber of Industry and Commerce CEO, says renewables and digistisation are new economic opportunities for TT. - ROGER JACOB

Pandemic opens way for digitisation

From the doom and gloom of the covid19 pandemic, there emerged areas of investments and areas for change, said De Souza.

One such area is digitisation, which has been catapulted to the fore, as just about everything has had to make a transition into a digital space — from micro, small and medium enterprises (MSME), government, schools, and companies' implementation of work-from-home models.

De Souza said the pandemic has forced people to use technology, from the simplest format, such as a Facebook page, to the creation of websites and applications to stay afloat and remain competitive in the world of business.

He added that TT possessed the infrastructure, despite the few hiccups in between with connectivity and broadband, to successfully transition onto a digital platform to do business and transactions of any kind.

“The technological infrastructure in TT does support people’s ability to work from home. The issue really is people having access to their respective offices from home. Given the nature of the work that is required, it is not always easy to log on to their company/business operating systems from home. The infrastructure in TT which provides for the use of technology does not have a problem.

“One good thing from the pandemic (is that it) has forced everyone to become more comfortable with technology and has forced businesses to use the digital infrastructure to produce their goods and services.”

De Souza added it was interesting to see a quickened response by the Government to digitalise and digitise its space and operations through a designated ministry.

The chamber, De Souza said, has been working with MSMEs through workshops to provide knowledge and the know-how to manoeuvre and recover from the economic downturn.

“Because MSMEs have been hard hit and many of them struggling to get their sales and revenues back up to something close to what it might have been pre-pandemic, managing and restructuring debts, loans and the business were some of the areas being addressed.

“Another area that is critical at this time is managing working capital. This is a time where businesses have a very sharp understanding of their working capital circumstances and how to manage it, so that it can continue to generate profit and cash flow, so that the business can continue to run and service the obligations to customers and stay in business for the long term.”

Survival of SMEs

Additionally, De Souza said while the Government has provided relief for business through various incentives, this could not be continued indefinitely because it was not financially sustainable or wise.

“The level of uptake of the government loan programme was great, and the allocation to Republic Bank was fully utilised and the other banks were having a similar experience. With the easing of the criteria (for businesses) and the increase in the government guarantee, the SMEs did use the facility of the loan-assist programme."

But, he warned, the Government cannot continue that forever.

"No government can continue to support an arrangement, like that unless it’s a country like the US, where money can be printed. The issue is, though, how to get a balance in the face of pandemic.”'

In the Roadmap for TT Post Covid19 Pandemic report, the Government outlined several projects to revitalise, stimulate and boost the economy in various sectors, with three immediate priorities in mind – address and mitigate the hardship inflicted by covid19, restart the economy, and lay the foundation for sustained economic recovery.

In 2021, for the business community in particular, zero-interest loans were provided to small and medium enterprises, accelerated value-added tax (VAT) refunds were given out, along with grants to micro-enterprises, and importers of essential items got US$75 million through a special import forex facility provided by Eximbank, among other initiatives.

Economic recovery in the short to medium term required collaborations between labour, the Government, and the business community, he said, to find new and innovate ways to pivot so that livelihoods, businesses, and the economy can survive.

“Everything is interconnected – government, business and labour. One can’t exist without the other. Businesses and employees pay tax to the benefit of the country. Government’s role is to establish the infrastructure that provides for the comfort of the living of the populace and the comfort of the operations of the business sector.”

Building the agri-sector

De Souza said a challenge for the agricultural sector has been getting people to become passionate about it again to be able to make significant contributions.

He pointed out that arable land was readily available, but labour remained problematic across the board from vegetable and fruit production to livestock production.

“We have the land and the resources, but the question is getting the lands into the right hands. Agriculture needs to be interesting and financially viable for people to go into it. We see more people going to all types of agriculture, like hydroponics, which is a more efficient form.

“Then there is the question of the capital that needs to go in, because agriculture does call for capital in terms of the investments for plants, and machinery. Agriculture has been supported in the outer end by agro-processing arrangements, so you need the processors to be a part of the value chain."

Food prices globally have seen steady increases over the past two years and there have been calls locally by the Government for more local consumption of foods, he said, but conversely, farmers have complained that they were not getting the adequate support to promote a functioning sector.

With an additional $500 million in 2021 and $300 million in 2022 for an agriculture stimulus package, the Ministry of Agriculture, Land and Fisheries said several projects were under way to boost the sector.

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