Raphael John-Lall
Local economists are confident that the presence of BRICS countries like China and India in T&T as investors can help T&T’S economic development.
In 2006, Brazil, Russia, India and China created the “BRIC” group while South Africa joined in 2010, making it “BRICS.”
Since then, other large developing countries have joined the line to join “BRICS Plus.”
The trade group was designed to bring together the world’s most important developing countries, to challenge the political and economic power of the wealthier nations of North America and Western Europe.
While China has the world’s second largest economy, India has the world’s fifth largest economy.
According to a BBC factsheet, the expanded group has a combined population of about 3.5 billion, or 45 per cent of the world’s inhabitants.
Combined, members’ economies are worth more than US$28.5 trillion - about 28 per cent of the global economy.
In 2014, the BRICS nations set up the New Development Bank to lend money to boost infrastructure.
By the end of 2022, it had provided nearly US$32 billion to emerging nations for new roads, bridges, railways and water supply projects.
Prime Minister Dr Keith Rowley visited India in May and in June met members of the Indian Investment Mission at the Diplomatic Centre, St Clair.
The Prime Minister also met chairman of Jindal Steel and Power Ltd, Naveen Jindal ,who has expressed interest in the mothballed Petrotrin refinery.
China and T&T are also growing closer.
On June 20, T&T and China celebrated 50 years of diplomatic relations.
According to media reports, China’s President Xi Jinping exchanged congratulations with the T&T government and said that he attaches great importance to the development of China-T&T relations. The Chinese president said he stands ready to work with T&T to use the 50th anniversary of diplomatic ties as an opportunity to continue to promote high-quality Belt and Road cooperation, deepen exchanges and cooperation in various fields, and take the China-T&T comprehensive cooperative partnership to a higher level.
Economic diversification
While China has been criticised in the last few years for “exploiting” smaller developing countries with a “debt trap,” India, which is also a large investor in Africa and now Latin America and the Caribbean, is not without its critics.
UNC Leader Kamla Persad-Bissessar has called out the Government on Indian businessman Jindal, questioning if it was “the Venezuelans” who put the Government on to Jindal to get the Pointe-a-Pierre refinery.
She slammed the Prime Minister’s statements that he was unaware Jindal was on alleged corruption charges in India.
Winston Dookeran, who has served as a former Central Bank Governor and held ministerial portfolios over the last 40 years as finance minister and minister of foreign affairs in different administrations, told the Business Guardian that countries like China and India can play a part in helping T&T to develop and even diversifying the economy.
He also said that the shifts away from more traditional allies like North America and Europe is nothing to be worried about.
“I do not see these as ‘shifts’ away from traditional relationships, but rather as exploring the opportunities that a changing world order offers. It’s a good direction, but it requires more than state-directed leadership, and an expanded private set of initiatives is integral to its success. Diversifying T&T economy is about the non-energy sector - widening the economic space of the economy. Energy investment is about exploration mainly, to increase production. I think investment from China and India will be more about widening the non- energy base of the economy.”
While there have been frequent meetings among different governments, Dookeran believes that if the relationships are to be meaningful, collaboration with large countries like China and India must be private-sector driven.
“To attract large-scale investment, would depend on a private-sector led growth strategy - with catalytic support from the state.”
He also touched on more controversial topics like the US and China rivalry, advising that T&T is a small developing country and must stay out of such global “Great Power” competitions.
“Also, the world will not be so easily divided between Western and Non-Western blocs, and small countries like T&T must play the foreign policy cards on an equal footing, adhering, perhaps to the notion of ‘active non alignment’ - a subject on which we recently had a full seminar at the Institute of International Relations (IIR), University of the West Indies (UWI). In addition, a new regionalism is emerging in the aftermath of the anti-globalisation trends. Our own foreign policy must seize the opportunities from this new regionalism, in some strategic initiatives, as the Caribbean moves its integration processes into a convergence model.”
Economist Dr Vanus James told the Business Guardian that a small, developing country like T&T must be strategic in how it sources investments from large countries like China and India.
“It depends on what you are trying to do and what they can help you with. What the country (including Tobago) needs to do is develop its capacity to innovate, its decision-making institutions, and its capital-producing industries at a sufficient rate. I won’t look to China and India for any help with the development of the decision-making institutions. Indeed, of the three, the only one I would seek their help with is the development of the capital-producing industries. You can only make the judgment about the relevance of infrastructural projects when you work out what the stakeholders want to do on three matters identified, at what rate/scale, and what help they need. In some ways, the governance arrangements have to be cleaned up before that kind of assessment can be done.”
James also expanded on what he meant by China and India can assist in developing T&T’s capital-producing industries.
“These are exportable such as education and skills training; exportable healthcare; development of the export capacity of all our creative industries, including professional services, data science, etc; related financial services; related community tourism housing stock and community safety services.”
China and India trade data
According to data from the website of the High Commission of India in T&T, trade (exports and imports) between India and T&T totalled US$169.53 million in 2019/20 and this number had more than doubled to US$368.96 million by 2023/24.
Additional information on the website stated: “T&T with its oil and gas resources has a high GDP of US $24.46 billion and a per capita income of USD$16,032 as for the period 2022-23. Based on its economically influential role in the region and supported by regional and bilateral preferential trade agreements, T&T provides good opportunities to exporters from India to access the Caribbean region and beyond.”
The website also noted that T&T has very good potential for investment and establishment of joint ventures by Indian companies in the field of energy, SMEs, ICT, pharmaceuticals & medical equipment and consumables, health, wellness tourism and Ayurveda.
Trade and business ties with China, the next global giant, have also increased.
At a meeting with Trade Minister Paula Gopee-Scoon in January 2023, the Ambassador of China in T&T, Fang Qui highlighted the strength of trade between the two countries stating that in the two previous years, annual trade exceeded US$1 billion.
Speaking at the commissioning of the Phoenix Park Industrial Estate in January 2024, China’s Ambassador said in 2019, T&T became the first Caricom country whose trade with China surpassed US$1 billion, and by 2022 bilateral trade between the countries exceeded US$13.1 billion, more than doubling the value prior to joining the Belt and Road Initiative.
Last November, Minister of Foreign and Caricom Affairs Dr Amery Browne, who spoke at a forum on Caribbean-China economic diplomacy at the Arthur Lok Jack School of Business in Mt Hope, said there has been a leap in trade and business relations between the two countries which expanded by 85 per cent between 2012 and 2022.
Despite concerns about high debt burdens, he clarified that, as of September 2023, loans from China to T&T represented less than 5.3 per cent of T&T’s external debt profile.
Browne also discussed the Belt and Road Initiative, emphasising its role in enhancing economic diplomacy.
The Phoenix Park Industrial Estate, a flagship Belt and Road Initiative project, was also highlighted as a key development, fostering connectivity and expanding commercial opportunities.
