CREATE AND ENABLING ENVIRONMENT TO SUSTAIN AND DEVELOP OUR MANUFACTURING SECTOR
The manufacturing sector is key to the survival of the domestic economy. It contributes 20% of our GDP and employs over 50,000 people.
As the country seeks to chart a new and innovation-driven future post COVID-19, the sector will be the catalyst for achieving economic transformation, expansion, and diversification. It is private sector driven and must be facilitated by the Government to create the enabling environment for firms to function.
To expand to its full potential, the myriad of bureaucratic bottlenecks impeding the sector must be addressed. These bottlenecks negatively impact productivity and competitiveness and Covid-19 has not helped.
To overcome this, the PNM Government will collaborate with the private sector, to transform the manufacturing sector to become globally competitive, productive, and innovative, utilising advanced technologies and environmentally friendly practices.
The required transformative measures are under 5 broad areas, namely:
- Improving the ease of doing business
- Improving access to finance and foreign exchange
- Improving production capacity and promote new and niche products
- Enhancing human resource capacity in the sector
- Expanding export growth to traditional and non-traditional markets
IMPROVING THE EASE OF DOING BUSINESS
Building on existing systems, such as the Single Electronic Window, the Government will pursue the following initiatives:
- Implement an Electronic Funds Transfer Framework to allow all payments to Government such as taxes and customs duties to be made electronically
- Automate all government services where practicable
- Develop regulatory sandboxes for new applications, to allow innovators to conduct live experiments in a controlled environment
- Expand the Voluntary Compliance Programme (VCP) under the Customs and Excise Division so that shipments of bona fide importers can be fast-tracked
- Enhance the existing cooperation between stakeholders of the National Trade Facilitation Committee to modernize, upgrade and automate import procedures, to reduce the time and cost associated with import and export of goods
IMPROVING ACCESS TO FINANCES AND FOREIGN EXCHANGE
REFORM THE VAT REFUND SYSTEM
- Improving the cash flow for business through the timely release of VAT refunds will significantly ease the financial and economic burden especially during tough financial times and will support and facilitate business continuity. To facilitate this the Government will:
- Systematically clear off all outstanding VAT refunds using the highly successful tradeable VAT Bond instrument developed by the PNM in 2020
- Implement a hybrid approach to VAT, to treat with outstanding VAT rebates, to allow exporters that are owed VAT refunds to net off these amounts against future payments
- Enact legislative amendments to facilitate the establishment of a separate ring-fenced Fund for the collection of VAT revenues and payment of VAT refunds
TRANSFORMATION OF THE EXIMBANK
The PNM will improve and transform the EXIMBANK to facilitate the growth and expansion of the non-energy export and manufacturing sectors, enhance the foreign exchange earnings of the country, and create and sustain employment.
To achieve this, the PNM will:
- Recapitalize the EXIMBANK to meet the needs of the domestic manufacturing sector
- Introduce blended finance which combines existing finance mechanisms and development finance
- Increase the size of foreign currency windows for exporters and importers of essential goods
- Develop and offer a combination of credit offers, such as trade finance, project finance and working capital, and purpose-built concessional loans
- Provide financial support to small and medium-sized enterprises involved in exports
DEVELOPMENT OF PRIVATE AND PUBLIC EQUITY FINANCING
To drive expansion, particularly for SMEs, the PNM will facilitate the use of Private Equity and make it easier for SMEs to get themselves listed on the Trinidad and Tobago Stock Exchange as a means of increasing capital availability.
IMPLEMENT A SECURED TRANSACTIONS AND COLLATERAL REGISTERY SYSTEM
Modern secured transactions law improves the ability of SMEs to provide lenders with readily accessible collateral. To facilitate this, the PNM will fast-track the drafting and passage of the Secured Transactions Act, to allow SMEs to use moveable property as collateral.
IMPROVE PRODUCTION CAPACITY AND PROMOTE NEW AND NICHE PRODUCTS
ACCELERATE IMPLEMENTATION OF THE NATIONAL QUALITY POLICY FOR TRINIDAD AND TOBAGO
The PNM will ensure that:
- An Independent Quality Accreditation Body is established by 2022
- Accreditation of Public and Private Laboratories is accelerated
- The Regulatory Framework to support Trinidad and Tobago exports is improved and modernised
UPGRADE AND EXPAND INFRASTRUCTURE AT THE INDUSTRIAL PARKS
The PNM will:
- Modernise and repurpose eTeck as a facilitator of commercial development
- Collaborate with tenant associations to create conditions to maximise output
- Develop new modern industrial parks to target firms in high-value manufacturing areas
- Review existing terms and condition of leases to provide better long-term lease arrangements, as well as the sale/purchase of lots within parks
COMBAT ILLICIT TRADE
The increasing presence of illegally traded commodities such as tobacco, alcohol and cleaning agents undermine public health, contributes to tax evasion, and creates an unlevelled playing field for legitimate businesses.
To combat this illicit trade, the PNM will:
- Task the respective ministries and border agencies need to take immediate action to increase surveillance of retail operations: to seize illegal products and restrict the importation of illegal commodities
- Facilitate consumer education on the responsible consumption of products
- Enforce appropriate national standards for affected products
PROMOTE EXPORT OF NICHE PRODUCTS
Due to our diverse culture, there are many local products, which can be viewed as niche products and can be exported to new markets and our diaspora located in key markets.
The country is well poised to capitalise on new export markets; our chocolate, the native Moruga scorpion pepper, and the Moruga Hill Rice, to name a few.
The PNM will therefore:
- Encourage and support the export of our niche products
- Assist local manufacturers of niche products to develop overseas franchises and distributors in the US and EU
PROMOTE AND SUPPORT DOMESTIC AND REGIONAL SUPPLY CHAINS
There must be stronger linkages between primary production, retail and distribution trade and the local manufacturing sector. To achieve this, the PNM will:
- Develop a comprehensive profile of the raw material needs of manufacturers and import substitution opportunities
- Develop a platform for domestic and regional buyers, sellers, and investors to conclude business deals which will strengthen production linkages and create new value chains
- Promote subcontracting and integration of SMEs in the manufacturing sector through vendor improvement and certification programmes, as suppliers of raw materials, intermediate inputs, and components
- Promote and facilitate horizontal and vertical diversification within the domestic manufacturing sector to build economic resilience and fuel growth through:
- Strengthening backward and forward linkages between the country’s energy and other sectors through clustering of the agriculture, energy, food and beverage, manufacturing, maritime and tourism sectors
- Accelerating economic diversification through the provision of fiscal and other incentives to the manufacturing sector to increase technology intensity of the country’s exports; and
- Fostering downstream aluminium production and other high value manufacturing such as electronic assembly; steel pan; textile and garment manufacturing for the domestic fashion industry; and pharmaceutical and nutraceuticals (including medical marijuana); cosmetic and petrochemical production
- Develop in collaboration with the private sector, the banking sector and international investors, the export potential of higher value- added products
- Develop green industries for export as well as inputs into the manufacturing sector
- Facilitate the creation of regional value chains through production integration within CARICOM
PROMOTE AND FACILITATE RESEARCH, DEVELOPMENT AND INNOVATION
Technology is increasingly playing a crucial role in improving competitiveness in the Manufacturing Sector. To facilitate and encourage the use of the latest technology, the PNM will:
- Encourage the development of research focusing on the 4th Industrial Revolution and new areas of manufacturing geared towards accelerating the structural transformation in the domestic economy
- Adopt new trends in global manufacturing such as 3D printing, additive manufacturing, advanced robotics, and blockchain
- Implement a Technology Solutions Tax Credit
- Implement a Research and Development capital allowance
- Enhance the commercialization of ideas through collaboration with UWI, CARIRI, the academic community, and manufacturing enterprises for technology development and technology transfer
- Provide grant funding to establish “Proof of Concept” or ultra-low interest loans to grow existing innovative projects
- Promote “Hatchery” programmes operated by the Private Sector, which would create opportunities for mentoring as well as “angel investment”
ENHANCE HUMAN RESOURCE CAPACITY IN THE MANUFACTURING SECTOR
To support the human resource needs of the Sector, the PNM will:
- Design and implement a National Vocational Training Strategy to create skilled employees with relevant vocational qualification standards
- Expand the current vocational offerings within secondary schools to allows students to pursue Caribbean Vocational Qualifications
- Implement a National Apprenticeship Programme modelled along the German vocational education and training system
EXPAND EXPORT GROWTH TO TRADITIONAL AND NON- TRADITIONAL MARKETS
The transformation and modernisation of exporTT into a leading export promotion agency, will be the driving-force for the development of an internationally competitive and resilient export sector.
To achieve this, the PNM will:
- Develop key performance indicators aligned to the export strategic plans of the MTI, TTMA and other manufacturers
- Implement a training plan that effectively addresses gaps in staff competencies and skills
- Develop an effective electronic client management system
- Develop and leverage strategic global partnerships to increase effectiveness
- Facilitate the transformation of existing processes on SMEs to introduce innovation products through the introduction of innovation vouchers
- Negotiate the expansion of preferential access and the removal of non-tariff barriers under existing trade agreements, in particular, Cuba, Costa Rica, Colombia, Dominican Republic and Panama
- Initiate new bilateral agreements that focus on Central and Latin America, the wider Caribbean, ASEAN, and Africa
- Enhance cooperation within CARICOM Member States to increase enhance market access to export market
- Approach the CARICOM Secretariat for an increase in the CET rates within the bound rates for all goods that can be produced locally and can meet regional demand
- Establish Trade Facilitation Offices in selected Overseas Markets, commencing with Costa Rica and Dominican Republic
- Transform the CSO into the National Statistical Institute to publish trade and other types of economic data to facilitate economic policy making and commercial business decisions in a timely manner
- Ensure fair trade and discourage businesses from engaging in anti-competitive business practices, such as the abuse of monopoly power and anti-competitive agreements and practice
- Review the Anti-Dumping Act and Regulations to ensure that local industries are safeguarded from unfair foreign practices
PROMOTING ECO-FRIENDLY BUSINESSES
SCRAP IRON INDUSTRY
The scrap iron industry has the potential to be a viable option for economic diversification and environmental awareness. According to the CSO scrap metal exports escalated from approximately TT$69M in 2009 to TT$216M in 2018, registering an increase of over 213% over a 10-year period. The PNM will support this industry by providing the necessary technical support and regulatory and incentive framework.
RECYCLING AND REUSING
The imminent introduction of the Beverage Containers Bill is intended to set up a deposit and refund system for glass and plastic bottles. This presents a tremendous opportunity for manufactures to rebrand into Green-branded companies and develop packaging that is better for the environment throughout its life: production, use and re-use. The Bill also provides opportunities for SMEs as a deposit scheme will indirectly encourage the introduction of substitutes such as glass, metal and plant-based containers that can benefit local producers and prospective distributors of both. It will boost the country’s embryonic recycling industry.