Imbert fields questions from businesses

FOR THE past five years, Minister of Finance Colm Imbert has been hosted by the TT Manufacturers’ Association (TTMA) in a post-budget forum the day after the budget is read in Parliament.

"The reason why I come to the TTMA post-budget forum is because I find this group – and you might find this strange – I find them non-political.

"I find that the discussion is always serious, factual and to the point and people don’t get into political things," he said.

This year was no different as a candid Imbert spoke with businesses during a panel discussion at the Hyatt Regency in Port of Spain on Tuesday, giving honest and open responses to questions posed by the TTMA’s membership.

After his $59.741 billion budget reading the day before, which lasted more than five hours, Imbert was not only able to speak to businesses on their issues, but he took the time to highlight some of the successes of the manufacturing sector and the non-energy sector on the whole.

Imbert talks business

Anil Matroo, who described himself as a retailer, said despite increasing the amount of local products that he sells he said he felt as though he would always be a net user of foreign exchange.

He asked if there was a way to focus on certain items that could be produced locally or regionally to keep funds within the region instead of spending foreign exchange on imports.

"I deeply appreciate the work of the TTMA and the Ministry of Trade for growing exports. But does the government have a plan for import substitution?"

Matroo said part of the solution should definitely come from looking at the country’s food import bill, which he was startled to discover was about $7.2 billion.

He also suggested having more interactions between the TTMA, regional business chambers, the Ministry of Trade and businesses to focus on import substitution.

He also asked about Tamana Intech Park and whether it will eventually become part of the new special economic zone regime.

"Because besides technology, I think the Tamana Intech park could be the next agro-processing hub."

Imbert encouraged Matroo to interact more with the TTMA.

"Certainly, that is what the TTMA is for, to discuss new ways and means of boosting local production among manufacturers."

Imbert said competing with places like China on finished materials, such as kitchen cabinets and doors, would be difficult. However, he said TT’s Eximbank can provide businesses with the necessary foreign exchange to buy inputs for production.

"We get foreign exchange from the oil and gas companies in terms of taxation and then the government will inject that into the commercial banking sector.

"The banks are told that their number-one priority is trade but there is no real definition of what trade is all about. So what we’ve done with Eximbank is we went into some great detail into their processes and procedures. Our manufacturers, of course, in order to build their export business they need inputs – machinery, raw materials and so on, which they must import and they must get foreign exchange to purchase.

"Eximbank screens applications to ensure that it is really for the purpose of importing raw materials to make something, add value and then export it to earn foreign exchange."

TTMA president Roger Roach said all businesses are welcome to provide input and ideas to make the business environment better.

"The TTMA is an open door. Whether you have a supermarket or retail business, we are open and you are free to collaborate and meet with TTMA."

He said the TTMA interacts with businesses outside of its membership with a category of businesses that they call associate members.

"We have members that are in several other industries – the finance industry, logistics, retail, there are some supermarkets that are part of the TTMA."

Vassel Stewart of Woodsman Caribbean Ltd, a food-processing company, raised questions on local content. He said there were policies in place to provide tax breaks for companies that utilise 75 per cent local content in their manufacturing.

"That issue of 75 per cent local content is ambitious at this time when you are now trying to get the sector off the ground, so I want to come back to you with the possibility of reviewing that 75 per cent local content to about 40 per cent."

Imbert once again referred Stewart to the TTMA, saying businesses could go to the association with their ideas.

"Talk to TTMA and if they can really come and give me a position on what the TTMA thinks we should do, with respect to incentives for companies that use high local content in terms of tax breaks and so on, we can take it from there."

He said while adjusting the content of foods sounds like a good idea on paper, there were issues with the feasibility of adjusting the content of TT foods, because Trinis like what Trinis like.

"We in TT have a certain taste in terms of the food we eat. For example, we are one of the world’s largest producers of chicken. We eat bread. People have tried for years to try to get the public to move away from wheat flour as the primary input. We are going to continue to eat bread, we are going to continue to eat chicken.

"These things may sound very attractive but they just won’t work."

Imbert – ‘manufacturing sector is saving us’

In his feature speech, Imbert lauded the manufacturing sector and all its stakeholders. He said while TT is an oil and gas-based country, the growth in the non-energy sector, especially in the manufacturing sector has been nothing short of tremendous.

"The manufacturing sector is really saving us," he said.

"Even though we are supposed to be an energy-dependent country – and theoretically that is what we are – when one looks at the non-oil sector and compares it to the energy sector, the contribution to our GDP from the non-oil, non-energy sector is now significantly more than from the energy sector."

In the budget read on Monday, Imbert said the lion's share of revenue is estimated to come from the non-energy sector. Imbert expects that $35.039 billion will come from the non-energy sector, while $14.174 billion is expected from the energy sector. Over the last year, Imbert said the non-energy sector recorded a 2.5 per cent growth with non-energy subsectors such as the accommodation and food service, trade and repairs and transport and storage sectors accounting for 28 per cent of the nation's overall GDP.

He said growth came from all areas in the sector, pointing out food and beverage, distribution, digitisation and ICT.

"We have also had a resurgence in the construction sector this year. If one looks at the sales of cement one would see that there has been growth in sales of cement year-on-year."

He lauded the Minister of Trade, Paula Gopee-Scoon and the TTMA for their contribution to the sector’s success.

"I was talking to the minister of trade. She told me it was the first time in nine years that I referred to her (in the budget). But I had to because there is no doubt that our success in manufacturing in this area is driven by the hard work done by the minister."

Roach highlighted the successes of the sector that were in the budget. He repeated the minister's reports in the budget that showed several manufacturing subsectors achieving significant growth over the fiscal 2020 to 2023. He said the food and beverage industry grew by 40 per cent, paper and paper-related products grew by 47 per cent, plastic and rubber products grew by 66 per cent, basic chemicals and fertilisers increased by 46 per cent, glass and glass products increased by 161 per cent, furniture and light fittings increased by 34 per cent, clothing textiles and apparels, 63 per cent and wood and wood-related products by 46 per cent.

"Over the last four years, from 2020 to 2023, exports of the non-energy manufacturing sector increased by $1.9 billion. Considering that this period was challenging for businesses not just domestically, but globally, this growth underscores the sector’s strength and resilience.

"In 2023, according to provisional data by the Central Statistical Office, the MTI estimated that non-energy manufacturing exports were approximately 12.8 billion, representing an estimated 96 per cent of total non-energy exports and 25 per cent of local exports."

Imbert, in his speech, said the budget presentation on Monday was an opportunity to share all the government had achieved over the past ten years, not just in the business sector, but for all areas of the country. He highlighted the country’s year-on-year growth, noting that the fiscal deficit for the country for this year may once again go down, from $7 billion to $5 billion with the non-energy sector playing a significant role.

"I thought it was necessary to say these things yesterday because if one would read the papers one would say the economy has collapsed. It certainly has not."