Last week, I attended the Development Bank of Latin America (CAF) Seminar, Envisioning long term stability in T&T at the Trinidad Hilton, where, for the umpteenth time, long term development challenges were discussed. My first thought, “The caption is apt”, we are good at “envisioning”. But, not so good at implementing.
By now readers must understand that I eat, sleep, breathe economic diversification and believe in a cluster approach to same. In clustering, a critical mass of firms offering similar services encourages competition and innovation for improved customer satisfaction and long term competitiveness and sustainability. As I sweated up the steep hill from the Hilton’s car park in my 4 inch pumps and later down again, this time (praise the lord) holding on to the arm of a kind woman concerned about my potential broken ankle, I became an even stronger advocate for clustering.
You see, the market in which Hilton plays has only 1 competitor, the Hyatt. It is oligopolistic and so able to extract supernormal profits largely uncontested. If we had a cluster of “Hilton” grade hotels vying to host this and similar seminars, weddings etc, Hilton would have to think about its high heeled, aged, health challenged driving consumers and at the very least, offer a valet parking service, or invest in an appropriate parking facility. Yes the Hyatt has a parking complex, but it too sacrifices customer satisfaction to ministerial reservations for all lower floors. The reverse would be more customer service appropriate. Remember Ryan Air? Low cost value proposition down to staple costs. Everything matters. In this case customer friendly car parking.
The Minister of finance gave the feature address at the Seminar. On the issue of diversification, he said, “Buzz words like the blue economy, the green economy, and the silver economy sound nice, but these transformations cannot be achieved overnight.” The Minister is correct. In fact, it takes 1-2 decades for sustainable transformation of any industry. But, unless we prioritise a start date with key performance indicators on the pathway to achievement, Minister of Finance 2026 will be making this very statement.
These buzz terms are new but many of their composite industries have existed in T&T as in the Caribbean for decades. Take the blue economy; fisheries, maritime services, yachting, ocean tourism are not new industries, but they are rapidly declining in the face of bureaucratic neglect. Will the new “blue label” make a difference? Already the regional and multilateral institutions have hitched their wagons to these new flavours. Blue conferences are being organised in exotic blue destinations. Fun experiences for participants but what then? More talk? When the action? The transformation?
I reiterate, the ingredients for non-energy diversification abound in existing industries, but we can’t talk them into sustainability. The cluster mapping, strategy development and implementation must follow. Maybe like Jamaica, we must hit rock bottom to find the impetus for directed action? According to the World Bank (May 2019), “After decades of high debt and low growth Jamaica has changed its growth trajectory, with positive economic growth for 16 consecutive quarters and growth getting closer to two per cent.”
CAF’s Director of Macroeconomics Adriana Arreaza, was correct to suggest cocoa as an industry in our diversification agenda. Her recommendation is based on one SME winning The T&T Chamber entrepreneur of the year award. But, that’s not enough, a much deeper analysis of this industry is needed to define the way forward.
No offence to CAF, but for me, the networking (and good Hilton food) were the highlights of the event. In a side bar conversation with Donald Baldeosingh, CZITT, Carbon Zero Initiative, diversification came up. He said, “After spending 100 years in producing carbon, T&T should diversify into selling carbon removal.” Panellist Patricio Meller, director of research of CIEPLA, referenced global companies like Apple paying millions to others for carbon removal equivalent to their carbon production. Baldeosingh also added that there is significant international R&D funding available for removal of carbon emission to be tapped into.
I asked Google and found many companies, one of which is online payments platform Stripe which will allocate at least $1 million each year on negative emissions technology by purchasing tons of carbon dioxide taken out of the atmosphere. This is called emissions trading, a market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Polluters hold permits in amount equal to their emissions, and to increase emissions, must buy permits from others willing to sell them. Opportunity for T&T? UWI, UTT?