According to the latest Global Competitiveness Report, Trinidad and Tobago ranks 83rd out of 137 countries. Climbing the ranks and increasing the competitiveness of the country could lead to several benefits. It may stimulate economic diversification and non-energy exports, correct external imbalances, generate employment, and spur innovation.
In order to become more competitive, Trinidad and Tobago needs to improve its legal framework and macroeconomic environment, two areas that require public sector intervention. However, the Global Competitiveness Report also shows that the actions which can be taken heavily involve the private sector – though not exclusively. Trinidad and Tobago scores relatively low in firm-level adoption of new technologies and in the capacity to innovate. Trinidad and Tobago ranks 136th out of 137 countries in terms of the relationship between employers and employees, with only South Africa scoring worse. Additionally, female labour participation can be improved upon.
While there are no easy fixes to these problems, positive change is possible based on what we have learned from successful economic transformation elsewhere in Latin America and the Caribbean. This may require bold moves but with large potential benefits for those who dare to take action.
Take the example of Manizales, a medium-sized city in the Colombian coffee district that collapsed in the 1980s, leading to wide-spread unemployment and despair. However, with the support of the Babson Entrepreneurship Ecosystem Project (BEEP), 73 high-potential firms in Manizales were able to generate an additional US $40 million in revenue in five years’ time, adding 1,400 jobs to the local economy. By taking a holistic approach to entrepreneurship and a willingness to take risks and experiment, the average company was able to grow at an annual rate of 46 percent. The Manizales project generated benefits for both business and the society and should serve as inspiration for business leaders in Trinidad and Tobago to rethink their modus operandi.
Another noteworthy case comes from Honduras, where the installation of a solar system led to a revolution in the energy sector. In 2015, the Corporación Industrial del Norte S.A. (Corinsa) installed a 3,000 kWp photovoltaic system on the roof of its soft drinks plant. At the time, it was the largest rooftop solar installation in all of Latin America. The project – supported by the private sector window of the Inter-American Development Bank (IDB) Group, IDB Invest – was a catalyst for the solar boom in Honduras. In 2016, Honduras became the first non-island nation in the world with 10 percent solar energy in its national electricity grid mix.
Admittedly, current electricity prices in Trinidad and Tobago do not incentivise companies to take similar transformative actions. With the signing of the Paris Agreement, potential tariff adjustments and continuous innovations in renewable energy technology, change is on the horizon. If the private sector in Trinidad and Tobago aims to stay ahead of the curve, it might consider investing in renewable energy options.
We would like to highlight two further innovations, which were created by an Argentine businesswoman who is changing the way companies hire and employ their staff using online technology solutions. In 2008, Silvia Moschini developed TransparentBusiness, an online platform to allow employees to work remotely, while offering tools to employers to monitor the hours worked, assess team performance and identify high performance. The platform also includes functionalities to improve project management and collaboration. Over 9,000 clients in more than 100 countries worldwide currently use Transparent Business. Implementing the platform in Trinidad and Tobago may lead to renewed employer-employee relationships and spur large productivity gains by allowing employees to work remotely, instead of facing severe traffic congestion on a daily basis.
Building on TransparentBusiness, Silvia Moschini also developed SheWorks!, a cloud-based platform with the goal to empower women to work remotely. The application allows companies to find women to remotely work for them in a way that is adapted to their respective situations. According to McKinsey, bringing women into the workforce could increase income in Latin America and the Caribbean by 34 percent, or US$2.6 trillion. Companies could thrive from being more gender-sensitive in their workforce composition. With only 51 percent of female population working in Trinidad and Tobago – versus 70 percent of the male population – there is a tremendous untapped potential for the country. SheWorks! may very well be a solution that could tap into that potential and unleash female empowerment.
Improving competitiveness in Trinidad and Tobago will not be easy and will require concerted action from both the public and the private sector. At the IDB Group, we see that bold moves are being made across Latin America and the Caribbean and we believe that the private sector in Trinidad and Tobago has the potential to take well-calculated risks that will make a difference for the country and be transformative for generations to come.
Rocío Medina-Bolívar is the Country Representative of the Inter-American Development Bank (IDB) Group in Trinidad and Tobago. Ms. Medina-Bolívar manages the private and public sector windows of the IDB Group in Trinidad and Tobago, including IDB Invest and the Multilateral Investment Fund. Prior to this assignment, she was the IDB’s Senior Advisor for the Andean Group Country Department and Country Representative of the IDB in Venezuela. Ms. Medina-Bolivar has held several positions at the IDB over the past 17 years, having extensive experience in both public and private sector financing. She holds a Law degree from the Pontificia Universidad Católica del Perú and a Master of Laws from Harvard Law School.
Lodewijk Smets is a Belgian national with a PhD in Applied Economics. After a post-doctoral fellowship at KU Leuven (Belgium), Lodewijk moved to Washington D.C. to work for the World Bank. At the World Bank’s evaluation department, Lodewijk worked on macro-economic evaluations and provided methodological support to evaluation teams. Since December 2017, he has been at the Inter-American Development Bank as Trinidad and Tobago’s Senior Country Economist.