VIVEK CHARRAN, chairman of the Confederation of Regional Business Chambers, expressed concern over the future of TT business despite the Prime Minister's recent announcement that this country has received an exemption to access and produce Venezuelan gas from the Dragon Gas field.
In a telephone interview on Friday, Charran said while the exemption will bring much needed revenue and natural gas content to TT, it could still take years before the nation would realise any benefits.
In the meantime, he suggested that TT should not wait on revenue from the Dragon field but try to raise the level of economic activity in the country before businesses, and the State, are overwhelmed by debts and increased costs.
He said while some economists would say the suggestion would be counter-intuitive in a time of heavy inflation, it would be necessary to build businesses still recovering from the economic and global shocks that came with covid19 as well as the current challenges that businesses face coming out of economic shocks connected to the Ukrainian war.
“Economists will tell us that we need to reduce spending in the economy, but the problem is that businesses are still suffering from the debts they carried coming out of covid19.”
“We are still dealing with inflation. In the US and in Europe central banks are clamping down interest rates which means countries are going to go in recession. In the US, it may not be that bad but reports are that Europe is facing recession. Which begs the question if the large countries go into recession how will that affect us? Then what is the situation with the Ukraine in terms of shortages in things like wheat and what repercussions it would have on food and inflation?”
He said businesses also have to worry about the looming property tax and the increase in electricity rates and the effects on expenditures for them.
Charran said that while there was a spike in commercial activity right after covid19 restrictions were lifted, activity has lulled. He said the businesses that would be doing well at this time would be fête promoters and those in the entertainment industries.
“This is their time and we are very happy for them, but generally everyone else, other than pharmacies and supermarkets, have not been doing well,” he said.
He also noted that by the time TT begins to get revenue from the Dragon Field’s gas wells, the national debt could be much more than it is now.
“So the government would itself owe a lot to the loans it took out and they would have to be paid in US dollars. So the reality is that when we look at the influx of revenues coming in from Dragon Field, where is that going to go? Would it go into the right places? Would we see an increase in the supply of the US dollars, would it go into the right places? Will we see it creating more jobs?”
“There are a lot of hurdles to be navigated and a lot of these things we still don’t know what is going to happen so if the business community is going to plan ahead and say what is our plan going to be in the next three years, before Dragon Gas comes in, what are we going to do? Are we going to sit and do nothing or are we going to try to grow. If we are finding a way to grow, then the electricity bill and the level of property tax that we are going to pay is going to be important.”
He suggested that more focus be placed on the growth SME sector as they make up the bulk of businesses in TT and collectively would employ the most people.
While Charran predicted that it would be anywhere between four to seven years before TT would see any revenue from the Dragon Field, former minister of energy Kevin Ramnarine suggested it would take about four years and a lot would have to be done before then for that timeline to be met.