Econ­o­mist Dr In­dera Sage­wan has said that the Eco­nom­ic Com­mis­sion For Latin Amer­i­ca and the Caribbean’s (ECLAC) fore­cast of low eco­nom­ic growth for T&T should be a wake-up call for the coun­try.

“T&T needs to take stock of what the pre­sen­ta­tion is say­ing. Cer­tain­ly, we need to re­fo­cus in terms of our de­vel­op­ment agen­da. For a very, very long time, we have been talk­ing about the ar­eas in ser­vices but some­how we can’t seem to get off the start­ing line. It is as if some­thing just keeps hold­ing us back,” Sage­wan said.

She added that the is­sue of in­no­va­tion has to be dri­ven by in­dus­try and ad­mit­ted that T&T has fall­en in this area as many do not find jobs af­ter they grad­u­ate.

On Thurs­day in Chile, Ali­cia Bárce­na, the ex­ec­u­tive sec­re­tary at ECLAC, pre­sent­ed the com­mis­sion’s lat­est re­gion­al re­port on the economies of Latin Amer­i­ca and the Caribbean.

ECLAC’s of­fice in Port-of-Spain al­so car­ried the pre­sen­ta­tion live and in­vit­ed lo­cal econ­o­mists to give their views.

ECLAC pro­ject­ed that 2019 will end with T&T’s econ­o­my grow­ing by 0.4 per cent and it fore­cast­ed that in 2020, T&T’s econ­o­my will grow by 1.5 per cent.

Dr An­tho­ny Gon­salves who al­so spoke at the pre­sen­ta­tion shared Sage­wan’s views on the econ­o­my.

“We have dif­fi­cul­ties in im­prov­ing the ease of do­ing busi­ness. I saw Ja­maica come with few­er re­sources and in no time they were able to climb on much high­er than T&T on the in­dex. The last T&T Gov­ern­ment in­vest­ed a lot with the Sin­gle Elec­tron­ic Win­dows (SEW) yet, at the end of the day, we are not see­ing the re­sults. We hear that the cost of get­ting a build­ing per­mit is too high,” Gon­salves said.

He added that he has been in­formed it is im­pos­si­ble to im­prove the ease of do­ing busi­ness in the coun­try with­out im­prov­ing the pub­lic sec­tor.

Gon­salves said if this is true then the coun­try has a lot of work to do and it will take more than five years to change the ef­fi­cien­cy of how busi­ness is con­duct­ed in the coun­try.

Dr Dil­lon Al­leyne, ECLAC’s deputy di­rec­tor, who spoke dur­ing the pre­sen­ta­tion, used T&T’s bank­ing sec­tor to high­light how in­ef­fi­cient and un­com­pet­i­tive bank­ing is in the Caribbean.

“We have a high­ly un­com­pet­i­tive bank­ing sys­tem. It is now con­trolled by four or five banks. One is a price leader and I would not call the name and the oth­ers fol­low. Every year they re­port vast amounts of prof­its. There is no in­cen­tive for in­no­va­tion. The com­mer­cial banks are not the ve­hi­cle for de­vel­op­men­tal fi­nance,” Al­leyne said.

Al­leyne said he banked with a cer­tain bank in Ja­maica and when he came to T&T to take up his post he brought let­ters of good char­ac­ter and oth­er rel­e­vant doc­u­ments.

“I thought the branch here would recog­nise it, but they said they do not do busi­ness with Ja­maica. They are all part of a sin­gle par­ent com­pa­ny in Cana­da but they do not talk to each oth­er in the Caribbean. So I come to a so­ci­ety where I know no­body, no­body could give me let­ters of rec­om­men­da­tion, but they want it.

“I brought it from Ja­maica where I had banked for 20 years. They said they are not in­ter­est­ed. Why do you think that is so? There is no in­cen­tive to pur­sue an­oth­er de­posit from me. They are do­ing well,” Al­leyne said.

When asked what will be the fac­tors that help trans­form T&T’s econ­o­my, he point­ed to Ja­maica’s ex­am­ple.

“With Ja­maica, it was the In­ter­na­tion­al Mon­e­tary Fund (IMF) and the fact that they had gone to the brink and they did not like what they saw. I don’t know what T&T needs. How is T&T go­ing to get the in­sti­tu­tions to­geth­er to get this go­ing? Is there an ur­gency for it?” he said.

Econ­o­mist Dr Vanus James who spoke at the ECLAC launch crit­i­cised T&T and oth­er Caribbean coun­tries for not be­ing in­no­v­a­tive enough.

“When you look at the evo­lu­tion of the glob­al econ­o­my over the decades and the In­dus­tri­al Rev­o­lu­tion, the un­der­ly­ing dri­ver of growth is growth with the ca­pac­i­ty to in­no­vate. Why is Chi­na catch­ing up to the West? Why is In­dia catch­ing up to Chi­na and the West? What ex­plains Japan’s growth? It is the ca­pac­i­ty to in­no­vate,” James said.

Un­like these Asian coun­tries he spoke about, James said T&T and oth­er Caribbean coun­tries are “floun­der­ing” at the bot­tom of any in­dex of in­no­va­tion.

“We are not do­ing any­where near enough as Caribbean coun­tries to add in­no­va­tion to our trade. We are lag­ging be­hind with mat­ters like the evo­lu­tion of our in­tra in­dus­try trade,” James said.

He added that in ECLAC’s last re­port they had pre­dict­ed 1.9 per cent GDP growth for T&T in 2019 and the lat­est pro­jec­tion is 0.4 per cent.

James sug­gest­ed that ECLAC look at their fore­cast­ing mod­el.

“You may want to scru­ti­nise the fore­cast ca­pac­i­ty of this mod­el that you are us­ing,” James said.

Michael Hen­drick­son, ECLAC’s eco­nom­ics af­fairs of­fi­cer said one of the things that baf­fles him is the chal­lenges that To­ba­go’s tourism is fac­ing.

“Why is tourism do­ing so well in St Kitts and Nevis?

“Why is To­ba­go not do­ing bet­ter? I think it has to do with undy­ing pri­or in­vest­ment and vi­sion in terms of di­ver­si­fy­ing the mar­kets en­sur­ing that you have air­lift and so on,” Hen­drick­son said.

He said To­ba­go au­thor­i­ties must do more to learn from the ex­am­ple of oth­er suc­cess­ful Caribbean tourism-dom­i­nat­ed economies.

James said re­gion­al gov­ern­ments must change their phi­los­o­phy to al­low grass­roots peo­ple to have in­put in­to the gov­er­nance mod­el.

“They are pre­oc­cu­pied with lock­ing out peo­ple who are not from the same par­ty and all that. Un­til we con­front that head on in the re­gion, we are not go­ing to get growth rates that are ro­bust,” Hen­drick­son said.

Ac­cord­ing to the re­port, the re­gion is ex­hibit­ing an eco­nom­ic de­cel­er­a­tion that is wide­spread and syn­chro­nised among coun­tries and sec­tors, top­ping off six con­sec­u­tive years of low growth.

In its Pre­lim­i­nary Overview of the Economies of Latin Amer­i­ca and the Caribbean 2019, the Unit­ed Na­tions re­gion­al or­gan­i­sa­tion in­di­cates that the de­cel­er­a­tion in do­mes­tic de­mand is be­ing ac­com­pa­nied by low ex­ter­nal ag­gre­gate de­mand and more frag­ile in­ter­na­tion­al fi­nan­cial mar­kets. This con­text is com­pound­ed by grow­ing so­cial de­mands and pres­sure to re­duce in­equal­i­ty and in­crease so­cial in­clu­sion.

For 2020, ECLAC’s pro­jec­tions in­di­cate that Caribbean na­tions will con­tin­ue lead­ing re­gion­al growth (with a sub­re­gion­al av­er­age of 5.6 per cent), led by Guyana (85.6 per cent, due to oil pro­duc­tion start­ing in 2020), An­tigua and Bar­bu­da (6.5 per cent), Do­mini­ca (4.9 per cent) and the Do­mini­can Re­pub­lic (4.7 per cent). On the low end of the spec­trum, Venezuela, Nicaragua, and Ar­genti­na will have more mod­er­ate eco­nom­ic con­trac­tion rates (with -14 per cent, -1.4 per cent and -1.3 per cent, re­spec­tive­ly).

Mean­while, Cen­tral Amer­i­ca will ex­pand 2.6 per cent and South Amer­i­ca 1.2 per cent.