Episode Transcript
[00:00:00] Speaker A: You're tuned into the all new freedom
[00:00:03] Speaker B: 106.5, 106.5 as we switch gears very quickly speak to some someone who is no stranger to the radio world, to freedom. Especially as we talk to Rudolph. Good morning to you. He's the CEO Private Sector Organization of Trinidad and Tobago. Good morning Rudy. What's up?
[00:00:24] Speaker A: Good morning Devi. What a wonderful morning it is indeed in our lovely island. I'm so glad to be back with you and our listeners.
[00:00:33] Speaker B: Beautiful. We talking mid year budget review, the energy sector and what it means to SMEs. And that is the first thing I want you to tell me. Let's start the conversation on the SMEs. You know we heard a lot about reallocations or a little more money being spent on national security with, with the education getting the lease Ministry of Health we have not, I mean listen to get the least but you know we're seeing, you know, a revisit of agriculture
[00:01:03] Speaker A: really continues to be our bastard child. But we could talk about that another time.
[00:01:08] Speaker B: Right, so let's start with what's going on with SMEs. You know, what is happening.
Why did this media budget review in my opinion, I don't know if I missed it but we didn't discuss it. I didn't hear anything, you know, what are your thoughts?
[00:01:23] Speaker A: So David, just for listeners benefit, a quick second around what this organization is.
So the private sector organization of Trinidad and Tobago was launched in December of last year. But it is not a new idea.
There is a version of it in Jamaica which has been in effect in the 70s.
And there's another version of it in guyana since the 80s.
And what this type of organization does is it integrates the entire effort of the private sector around common issues.
So the Minister of Finance should not be receiving 15 letters from 15 different business organizations asking about VAT refunds.
It is not efficient.
Different organizations that represent specific sectors can make representation for those very unique things.
So the PSOT team has been recognized by the state as an innovation. In Trinidad and Tobago we are fully private sector, funded and led. But the state has accepted that they need to partner with an organization like this that can really integrate effort and to create projects.
So when you ask about the SMEs we one of our main members is actually the confederation of Regional Business Chambers.
And that Confederation Davy represents hundreds of SMEs across the length and breadth of Trinidad and Tobago from as far as Moruga to as close as Port of Spain and carinnage.
But those SMEs were also listening out to search if in the, let's call it the lagniape, the lagnia part of the national budget for this fiscal year, if there would have been any additional elements that the Minister of Finance would have brought in to give them some uplift in the last quarter.
I hasten to add though, Devi, that you are right that you would not have some of those measures because the media review really at its core is simply a midpoint where the government says, like we do in business, we have not attained budget, so we need to reallocate resources.
Sometimes the government's past and present, they use it to add a little sweetener to the pot, carrying them into the second half of the year and trying to maintain some level of support.
But in this particular media review, you have to admit that it was really nuts and bolts. We needed an extra $3 billion and the majority of it is going to pay salaries and recurrent expenditure.
What we want to hear in the next few weeks are the SMEs speaking out in a collective fashion and developing not just recommendations, Davy, but actual projects that will get them the type of monetary and fiscal policy in the upcoming budget that will change Trinidad and Tobago's SME landscape. So you are right, but that is why you didn't hear it because the government went to a very hardcore all we really want is some additional money and then we will come again in the October period with the new budget.
[00:05:14] Speaker B: How practical is that? How real is that?
How are we to digest what you have just said as fact? I mean, I understand you are explaining it, but for SMEs not hearing anything, they already feel a bit disgruntled. How are they to navigate the other, you know, part of the year as we lead up to, you know, you
[00:05:37] Speaker A: see people use the term SMEs very broadly and oftentimes SMEs are given lip service, unfortunately.
But within the SME bracket, a majority of them have a certain cultural experience as a business.
They have grown themselves, Davey, through hard work, innovation and very ingenious approaches to digging out opportunities. Most of them are family businesses, not just in Trinidad and Tobago, but across the Caribbean.
So over decades they have been, they have been encouraged to continue to invest with the promise that the right carrot will be presented, the right ecosystem, however, that is yet to be delivered. So how are they going to navigate?
They are going to to have some ongoing challenges in the next quarter.
But what psot, what the private sector organization Trinidad and Tobago is asking of them and we started this last week I was in Grande, I was in San Fernando. We are going to continue those visits. We are actually going out to where they do business and we are going to workshop with them the actual solutions and projects that they require to support their development agenda. So what they need to do is hold together, they need to participate in the consultations and they need to share some data.
Because when we have the data, for example, around foreign exchange needs, capital, financing, capacity building, technology, we can then work with them directly to say to the government, we don't davi. We don't just want to say in the next budget, we need access to foreign exchange. What we want to say is we need X amount of foreign exchange. We are going to be using the foreign exchange to build this type of export capacity in these different sub segments.
And this is what we are going to deliver for the economy.
And this is how you must model the foreign exchange platform. Because Ex Im Bank's platform is not working for the SMEs right now. As a matter of fact, we have been trying to engage with the Ex IM bank and I'm making a public call to them this morning for them to be more responsive to the SMEs because those models sometimes work for the larger businesses. So the M's that are very big and of course the large organizations, but they don't work for the smaller M's and the small businesses within the economy.
[00:08:43] Speaker B: With that being said, I understand and I appreciate you making that call because I often feel that SMEs struggle a lot in order to get some leeway into. And I mean, it's very unfortunate. I applaud governments of the past and present that they try to, you know, in my respected opinion, I could be wrong, but there are little initiatives to netco. You know, they would have tried to encourage small medium enterprises to come on board, you know, become entrepreneurs.
There's platforms such as TIC, where government supports and they come in and they try. But the challenge, as you mentioned, Rudy, is really hard for SMEs to get recognition in this country.
And one that comes to mind is the.
I think it was Pimento flakes. Boy.
[00:09:31] Speaker A: Yes, I use some of those, I know some of those producers.
[00:09:35] Speaker B: Right. And, and, and I, I wonder to myself, why didn't government of the day buy into this initiative so much so that they become a major exporter of that product that, that, that into the, into the wider world?
[00:09:50] Speaker A: You know, maybe it is a simple answer. You know, people got very distracted and they did not truly care about that sector, they acknowledge it and they see it almost as a lifestyle business where the producer or the light manufacturer or the retailer or the. A mechanic is an SME know and my mechanic makes a good raise, especially with the number of cars that exist. And some of them are highly trained. They could actually go and work across the world because they have the technical know how. That's an export, that's an SME export.
But to bring it back to what you really need is seismic ecosystem change when it comes to financing. Davy and for far too long the commercial banks in our country, they, and I understand why they have maintained a collateralized approach with a high, a high need for risk mitigation. So they don't have the appetite for what they see as high risk businesses.
And if we know that, if we accept that, then we needed to have created an ecosystem where there were angel investors and venture capitalists so that the Pimento flake manufacturer would have gone through an incubation process, identified where they can grow and export, map out what the ROI would be. I as an investor would come along and say, all right, I have $100,000 that I can invest in you and in three years, based on your business model, I'm going to get back $150,000, which is more daily than I would get if I left my money in a fixed deposit.
[00:11:47] Speaker B: And that is what I love piece
[00:11:49] Speaker A: that is missing, right?
[00:11:50] Speaker B: And I love that explanation and the clarity that you just said. Because when you look at angel investors, we don't have much of that in Trinidad. People, as you mindfully mentioned, you use the terminology high risk.
All right? And in my respected opinion, and I'm sure you and I would have discussed this at length, any entrepreneur that is delving into this market, I mean you can't always, there's no way to reinvent, to invent the wheel. Those things are invented. We look at different modules, different applications in which we can bring products onto the market. And when we get these products onto the market, the government can start off as an angel investor. You can look at the trajectory and the business plan of said individuals, see how it thrives locally. First, assist with distribution and marketing, put them onto the right individuals, get the supermarket association involved. And when this starts happening over a six month incubation period, we can then revisit this module. See that? Okay, the local markets supermarket franchise have been selling this. It has been evolving pretty well. Let's see if we can tap into the Spice Island. Let's go to Grenada, let's go to St. Vincent. Let's go here.
[00:13:06] Speaker A: There you go.
Advantage of the trade agreements within caricom.
[00:13:10] Speaker B: Within caricom. But you know, and that trickles to my next question for you.
[00:13:14] Speaker A: But it's going to happen. But it's going to happen. Your dream is not going to be lost because the Supermarket association are part of our stakeholder group. We engage in a bilocal development campaign. We're looking at quality standards and ensuring that local, not all, but enough local are comparable to foreign goods. It all helps it import substitution daily and the saving of foreign exchange.
[00:13:39] Speaker B: Exactly.
[00:13:40] Speaker A: So your dream is not going to be lost.
[00:13:42] Speaker B: But as you mentioned, foreign exchange going
[00:13:44] Speaker A: to get this done.
[00:13:45] Speaker B: As you mentioned, foreign exchange. Let me delve straight into one of our largest foreign exchange market that we are now tapped out of, which is the energy sector.
The fact that this budget is this, the trajectory of this budget seems seeks to get the 3 billion or more back on money to continue the balance of this fiscal year that you said that we're going to see certain things happening in the new package to come in October. Outside of that, the minister have already made commitments yet again to pay persons in 2027.
[00:14:18] Speaker C: Right.
[00:14:19] Speaker B: So if we, I mean thanks very much Rudy for highlighting those challenges with the SMEs. But how are we going to be fair with the energy sector?
Because we seem to be throwing all our eggs in that basket.
[00:14:30] Speaker A: Well, unfortunately, Davy, and this has to always be stated, and when I say we, I mean the big we. W E, capital letters, all of us, for decades we allow the Dutch disease. You know that term. I hope the callers understand that's what they call it when you become so energy rich that you depend completely on energy and you expect that it will carry you for the rest of your life and you really ignore everything else. Right.
So we allowed that to take root and unfortunately Devi and this is across administrations, we did not effectively even manage that sector over 100 years. Some people say Trinidad Tobago is the first, first producer of a barrel of oil in the world. Right. Do you know Trinidad Lago does not own as a nation any intellectual property in the oil and gas space.
What we do have though, Davy, are some of the best trained minds in the world. And our people have been building the oil and gas space across the globe for other countries.
So we have the talent, we have access to staff, some financing and we have, we have a mid range energy space because of course we don't have a refinery right now, but we have some other infrastructure that's working for us.
This is what the Private sector is coming to terms with understand in the next few years energy is going to keep us on a plateau.
It is going to give us the foundation.
It's going to continue to buffer for some of the transfers and subsidies that we've become accustomed to. It's going to kind of maintain us, Davy in a float along pattern. But it is not going to save us. It is no longer the savior. It is energy services, Davy that has the highest potential to make the best biggest impact in the shortest space of time. We were speaking to energy services providers. We have to look similarly as Guyana did. They call it local content, we call it local business development.
If we can get those contracts right Davi, those service providers that are helping in other spaces around the world, they can develop hundreds of millions of US dollars extra, Devi for our economy.
And while we build on that, whatever money that we extract from those new taxes, that tax, that new tax, Devi has to finally be used for more productive capacity. We cannot fall into the trap in the next four to 10 years of using extra revenue earned to simply give it away into transfers and subsidies because that is not sustainable.
So that is how the energy sector is going to continue to help us for a bit. But it is not the messiah anymore, Devi. And that is why manufacturing and we come back to the SME space manufacturing, agro, processing, the blue economy creative sector, Devi, you are part of that sector.
Some of those artists and creative assets could be earning us a few hundred million US dollars again if we leverage them properly. Davi. So we have to do things the right way this time around.
I don't think we will get another cycle. This is a moment we have a burning platform and all of us have to push the levers, Devi and ask for what we want and support the government when necessary, but keep them in check so that they go along in the right way. We cannot fall into this belief that energy is going to come and save us. And I was glad that the minister of finance said that in the media review that energy is not going to save us. I'm paraphrasing but he said that. And that is why they were looking at in the new fiscal year of where they can invest for these other sector development month.
[00:18:48] Speaker B: You know, I'm very happy that you said that. Let's take this call quickly. Hello. All right, that's that. We lost the call six to five. Well, you can call us if you can get in.
Diversification is a bad. That bad word again. Do the call is coming to before we get to that question Hello, Good morning.
[00:19:03] Speaker D: Sure a pleasant Good morning. Hello Mr.
I I, I pleasant morning again today.
You know, looking at I listen to all this and I want to listen to you very intensively but we're looking
[00:19:16] Speaker A: at here has Carrie come as a
[00:19:19] Speaker D: body all the different countries that are active have they tapped into all their resources in terms of let's see, what are your strengths? What what you can contribute to the carry company. I would that now with all of our strengths now we'll be able to look at all our weaknesses and then with that on board now we'll be able to see our market that are in a proper caricom market where other car can already be affordable. I reckon with are we looking to develop those things and collaborate collect the different countries, connect with them as other body and carry command over the years I don't think I've seen that and I think we that we have to work towards that. I just want to talk of you Rudy.
[00:19:58] Speaker A: Yes, Davy. I didn't hear the callers so you may have to paraphrase.
[00:20:01] Speaker B: Okay, he let me take this next one quick. Hello, good morning.
[00:20:04] Speaker A: Morning Davy. And to your honorable guest.
[00:20:07] Speaker C: I don't think you are born yet, Davy and I guess but since 1962 we knew we have to export to live daily and it still applies today and forever we have to export to live. But when the oil came, as the fellow said, we had the dress disease. You abandoned other sectors of the economy and you rushed oil and same economy serendipity. Now it got developed, right?
[00:20:32] Speaker A: It hasn't happened.
[00:20:33] Speaker C: We have to export to live Devi now and forevermore. Amen. Thank you.
[00:20:38] Speaker B: All right, so what I say we have to export to live and I kind of miss what Morales was trying to ask, but with the Minister saying that we can't depend on the oil and gas.
One question I want to ask, and I didn't hear it much in the review as well we reviewed the budget, we asked for the 3 billion extra point something, whatever. But when I look at what is taking place geopolitically between our government and Delsey Rodriguez, do you see us as having any opportunity at all in delving into the energy sector as it relates to the Dragon Gas deals that the Prime Minister did allude to that she is putting together a team to send to Venezuela.
[00:21:17] Speaker A: Yes, we need to do that. We need to explore all opportunities, especially with our neighbors who are so close to us.
However, the entire energy landscape has changed, especially within the last five to 10 years and many projections by leading experts daily unfortunately predict that Oil and gas prices are not going to ever reach to the levels that they once did before.
And there are a lot of other factors going on. Suriname has its own deposits.
You've heard Barbados talk about their deposits.
The energy mix in Europe is changing.
So it's one thing to access new resources, but will you be able to sell it as easily as before? Will you make the types of profits that you were making before?
And that is why we must have a much more adult conversation when it comes to energy and our ability to monetize our reserves. We've lost a few opportunities over the years, unfortunately, and we have to make the best of what we can now. That is why tourism, for example. Tourism is a sector that naturally earns foreign exchange.
And when we speak tourism, we cannot speak broadly.
The Ministry of Trade, Investment and Tourism has identified that they're doing as many different segments of tourism, but six of them, for example, are demarcated as high growth potential.
Ecotourism, for example. People who come here to look at our births, they spend four to seven times more than someone who comes for Carnival. Think about that for a moment. Trinidad has never tapped into our tourism sector properly.
We have to stay, start thinking about that and intellectual property rights that bring tourism and culture together so that we can make money while we are sleeping daily.
So if you use just enough the right percentage of the energy revenues and you invest that in the right way, we will be building sustainable economies and economic growth for our grandchildren. Because if you take one simple example, and you and I have talked about this on our other callers, the education system is in dire need of investment and innovation. Where are we going to get the billions of dollars now when other areas of Trinidad and Tobago are just as desperate? And that, Davy, is why the private sector is stepping up. Because Trinidad and Tobago has found itself in a place where everything is a priority.
Every single sphere of our country, Daisy, is now in crisis mode.
And we haven't broken the camel's back. We are not falling off a cliff. However, we need to really grow and expand at an exponential rate. Because now we need to feed many more areas at the same time. And we don't have the luxury anymore of energy coming from on high to save us once again. And that is the truth. And that is why we have to support initiatives and we have to not just support them. We have to guide and influence public policy in the right way because the government can't do it alone. The private sector and labor have to get involved and have our seat.
[00:25:03] Speaker B: You know, I could appreciate that 100%. Let me take this next call. Hello, good morning.
[00:25:09] Speaker D: Yeah, you shared some of the points there where we have to explore all our our talents, our natural talent, our natural resources, whether it be tourism, whatever it is. And besides that to the point I'm making just now Caricom also different Caricom countries who are active in Caricom need to do the same so we can intertwine and I where you can buy something from me what you don't have difference I'm just spiritually really that could be a real tourism polar, you know that can market and bring income forward. But no, nobody ever marketed any way it should be doing should be all right.
[00:25:47] Speaker C: Thanks.
[00:25:47] Speaker B: Okay. He talked about tourism. And in conclusion Rudy, in terms of even looking at diversifying sustainable income for Trinidad and Tobago, you mentioned Pitch Lake. We can advertise and market these things and attract persons. Remember, we're not SOEs. So even if you're trying to market and attract personal life that just wasted money. But the thing is right so how can the tourism sector in your respected opinion affect the budget, the incoming budget, the national one in October.
[00:26:18] Speaker A: Your final thoughts one one main sector and the government has already moved to improve the ease of doing business in the yachting sector.
That sector can almost overnight because I used to be a manager in that in the at the cruise end marina and the Shag terms dockyard and Davy that sector can provide immediately amazing opportunities for young skilled talent to earn foreign exchange. And because we are below the hurricane belt, those yachts will come here. So in the next few months, if we make we've already made it easier for them within a few minutes they can complete their customs and health checks. It used to be hours before that will spread like wildfire. And because we are a safe harbor if we have the skills which are lying there latent dormant if we activate those skills we can start earning tens of millions of US dollars within the next fiscal year. Didi so there are pockets of things that do not require large scale investment by the government. It requires an enabling ecosystem, the right incentives, the right legislation. The private sector will come forward, unlock the capital that is sitting down in the banks and invest and we can start making some money. It may not be enough to replace the energy, but you don't want to replace energy. You want to complement energy, but you want to do it in an effective way. Davy that it has a large impact on the economy, not simply a marginal increase. So we're going to do it. We are a creative and innovative people. We created the steel pan. There's no greater example of that for innovation. I believe in US and the private sectors now come together united and they are willing to invest more than ever and to bring solutions. We expect the government to listen and to work alongside us and we can get this done.
[00:28:21] Speaker D: D.V.
[00:28:22] Speaker A: we have to. We have to get this done.
[00:28:24] Speaker B: Thank you very much, Rudy, for chatting with us this morning.
[00:28:27] Speaker A: You're tuned into The All New Freedom 106.5, 1 6.5.
