Chamber: Investors wary

...blames high liquidity, four elections in one year

By Carla Bridglal

High liquidity in the financial system and four elections over the course of the year have contributed to a lack of investment in 2013, chief executive of the Trinidad and Tobago Chamber of Industry and Commerce Catherine Kumar has said.
“I think definitely what we’ve seen this year is greater reluctance to put out new investment. There are a couple big projects—the Allum project with MovieTowne in San Fernando, for example—but generally we aren’t seeing investment happening,” Kumar told reporters on Tuesday.
She was speaking after a Chamber workshop on fraud.
She said while Government was making moves to increase the limits on borrowing as a way of sopping up excess liquidity, that was not necessarily the best approach, but in the absence of investment, likely the best option.
“What we need is Government to inspire locals and foreign investment into the country,” she said.
Crime, the cost of security and also the cost of loss of life were also deterrents to attracting investors. Government bureaucracy, despite some advances in technology like TTBiz Link and the ASYCUDA systems, is also a hindrance.
Risk aversion from banks, which prefer to give out loans to proven ventures rather than new ones, also contribute to the lack of investment, leading to a sort of Catch-22 where there is money available for investment but no investments able to access that money.
“You would think with the high liquidity they would want to give loans…Real credit to push business is not really happening,” Kumar said, adding that the Chamber has been discussing with banks to appropriate funds towards riskier investment, whereby even though there is a greater chance for non-performing loans, the economy can be stimulated.
“We put out a lot of events for small and medium enterprises, and there are a lot of those businesses who want to go further but they can’t get bank loans,” she said.
Kumar also said that, from member feedback, there have been mixed reviews for the Christmas season.
“The place is busy; there’s traffic and activity in the malls but that is not translating necessarily to people spending,” she said.
Four elections over the year was also a serious issue for most businesses, she said—maybe with the exception of the media and advertising companies.
“Elections take up a lot of time for the government and are a distraction from the proper running of the country…it’s really not good for a country, especially a small one like ours and I feel we lost a lot this year because of that and with 2015 around the corner campaigning is going to start at least by mid-2014; in some cases it’s happened already.
The overall outlook for 2014 from the Chamber’s perspective, however, is growth, especially as energy output picks up now that routine maintenance of equipment and plants has been completed.
And as a lead into an election year there will also be new activity by the government which will push activity,” she added.
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