Identifier
Created
Classification
Origin
06PORTOFSPAIN977
2006-08-17 13:26:00
UNCLASSIFIED
Embassy Port Of Spain
Cable title:  

TRINIDAD ECONOMIC HIGHLIGHTS - AUGUST 1-15

Tags:  ECON EFIN EFIS EIND EINV ETRD TD 
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VZCZCXRO3214
PP RUEHGR
DE RUEHSP #0977/01 2291326
ZNR UUUUU ZZH
P 171326Z AUG 06
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC PRIORITY 7240
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUEHKO/AMEMBASSY TOKYO 0079
UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000977 

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN EFIS EIND EINV ETRD TD
SUBJECT: TRINIDAD ECONOMIC HIGHLIGHTS - AUGUST 1-15

The following were notable economic issues in T&T during the first
half of August:

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000977

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN EFIS EIND EINV ETRD TD
SUBJECT: TRINIDAD ECONOMIC HIGHLIGHTS - AUGUST 1-15

The following were notable economic issues in T&T during the first
half of August:


1. Japanese Minister announces plans to invest in T&T

2. Roof tile manufacturer opens for production

3. Central Bank raises 'Repo' rate to 7.50

4. T&T building costs on the rise

5. MoU signed on sea laws for fisheries company

-------------- --------------

1. Japanese Minister announces plans to invest in T&T
-------------- --------------

In a press conference on August 10, Japan's Social Affairs Minister
Kuniko Inoguchi made a commitment to invest some of her country's
resources in Trinidad and Tobago. As the first Japanese minister to
visit T&T, Inoguchi characterized the occasion as "a sign of
friendship and commitment" after meeting with Prime Minister Patrick
Manning and Foreign Affairs Minister Knowlson Gift. In her
discussion with Gift, according to media reports, Inoguchi touched
on possible ways in which the two countries could strengthen ties --
not only in the energy sector, but with community development, as
well. She noted Japan's interest in lending support to
non-governmental organizations (NGOs) as well as the fisheries and
agricultural industry. Inoguchi also mentioned T&T's active role in
the Japan Exchange and Teaching (JET) program that sends English
teachers from across the world to Japan, which she said helps her
country better compete in the global market.

-------------- -

2. Roof tile manufacturer opens for production
-------------- -

The largest roof tile manufacturer in the Caribbean officially
opened in Chaguanas on August 8th, launching a USD 16.7 million
venture between the local Ansa McAL Group of Companies and Boral
USA. Caribbean Roof Tile Company Ltd is expected to be a landmark
non-energy sector producer for T&T. The company is scheduled to
export 90 percent of its output to the USA and utilize the remaining
ten percent in T&T and the Caribbean. The business relationship
began in October 2004, when the Ansa McAL Group and Boral USA signed

the 50/50 joint venture agreement to build a clay roof tile company
in Trinidad; construction followed in March 2005. Presently, the
company is capable of producing around 15 million clay tiles and
employing up to 90 people. Trade and Industry Minister Kenneth
Valley spoke at the opening and described the company's operations
as being consistent with T&T's aim to be internationally recognized
as the business, trade, and investment hub of the region.

--------------

3. Central Bank raises 'Repo' rate to 7.50
--------------

The latest data released by the Central Statistical Office indicates
that the domestic economy continues to experience inflationary
pressures. On a year-on-year basis to June, headline inflation
increased by 8.65 percent from 7.97 percent in the previous month.
Food prices, which continue to drive headline inflation, rose by 3.7
percent in June and on a year-on-year basis by 25.7 percent.
Contributing to the sharp rise in food prices were increases in the
prices of vegetables (67.9 percent),fruit (33.5 percent),fish
(31.9 percent) and meat (10.2 percent).
Core inflation, which excludes food, remained relatively unchanged
at 3.35 percent. Over the last twelve months, contributors to core
inflation have been due to increases in the cost of services in
education (12 percent),health (9.9 percent),recreation and culture
(9.5 percent) and hotels and restaurants (6.8 percent). Continued
rapid economic growth, an increase in domestic demand and a
tightening of productive capacity contribute to these inflationary
pressures. Against this background, the Bank has decided to raise
its overnight 'Repo' rate by 25 basis points to 7.50 percent
effective July 28, 2006. The next 'Repo' rate announcement is
scheduled for August 25, 2006.

--------------

4. T&T building costs on the rise
--------------

The Ministry of Works and Transport recently published a report
analyzing the rising cost of construction entitled, "The Impact of
Industry on the Construction Sector in T&T from June 2004-June
2006." The study suggested that the current booming pace of
construction, fueled by the rise in oil and gas prices, is likely to
continue for another seven years. In the 20-page report the
ministry states, "We should expect an increasing demand for more
materials and services associated with the industry." The report
went on to advise that, "if nothing is done to reduce the level of
inflation being experienced, prices will undoubtedly continue to
rise beyond the reach of the ordinary person." In the last two
years the cost of clay blocks has undergone an "astronomical"
increase at 184.6 percent. Similarly, the cost of ready mix

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concrete went up by 12.2 percent internationally, but locally it
went up by 188.5 percent. Commenting on the report, Winston Riley,
president of the Joint Consultative Council (JCC),said the GOTT had
been opting for fixed price contracts opposed to contracts that
contain fluctuation clauses. A self-styled "brief study," the
report recommended further independent analysis to "determine and
recommend a course of action to stem this rising inflation."

-------------- --

5. MoU signed on sea laws for fisheries company
-------------- --

After five years of discussions, the Ministry of Agriculture, Land
and Marine Resources and the National Fisheries Company (1995) Ltd.
(NFC) signed an August 9 Memorandum of Understanding (MoU) governing
foreign-flagged vessels that use the facilities at NFC to lawfully
engage in trans-shipment of fish and fishery products through T&T
ports. The MOU states that these vessels must operate in accordance
with national and international regulatory requirements relating to
the conservation and management of living resources and the
protection of the environment. The MOU also allows for the T&T
Coast Guard, among other agencies, to be involved in monitoring and
enforcement. Further provisions within the MOU regulate: data
collection and reporting responsibilities for the NFC, port
inspection and identification of Illegal Unreported and Unrelated
fishing vessels and the regulation of trade in prohibited species.
Anne Marie Jobity, Director of the Fisheries Division in the
Ministry praised the MOU to econoff stating that it would assist T&T
in conforming to international fishing and marine treaties, as the
country is responsible for foreign-flagged vessels' actions in local
waters.

SWEENEY