Identifier
Created
Classification
Origin
08PORTOFSPAIN358
2008-08-06 18:31:00
UNCLASSIFIED
Embassy Port Of Spain
Cable title:
TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS FOR MID- JUNE TRHOUGH
how-toVZCZCXRO4985 RR RUEHGR DE RUEHSP #0358/01 2191831 ZNR UUUUU ZZH R 061831Z AUG 08 FM AMEMBASSY PORT OF SPAIN TO RUEHC/SECSTATE WASHDC 9333 RUCPDOC/DEPT OF COMMERCE WASHDC RUEATRS/DEPT OF TREASURY WASHDC RUEHDG/AMEMBASSY SANTO DOMINGO 2627 RUCNCOM/EC CARICOM COLLECTIVE RUCNDT/USMISSION USUN NEW YORK 0105
UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000358
SIPDIS
SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE
E.O. 12958: N/A
TAGS: ECON ETRD EAGR EFIN EINV EAIR KIPR SENV TD
SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS FOR MID- JUNE TRHOUGH
MID-JULY 2008
The following were notable economic issues in Trinidad & Tobago during
the second half of June and first half of July.
UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000358
SIPDIS
SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE
E.O. 12958: N/A
TAGS: ECON ETRD EAGR EFIN EINV EAIR KIPR SENV TD
SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS FOR MID- JUNE TRHOUGH
MID-JULY 2008
The following were notable economic issues in Trinidad & Tobago during
the second half of June and first half of July.
1. China and GOTT sign loan and cooperative agreements
2. T&T to sign trade agreement with EU
3. Dubai, NYC support T&T's International Financial Center
4. T&T deposits US$200m into its sovereign wealth fund
5. No flour subsidy for T&T
6. Fuel hedge key to Caribbean Air success
7. Successful bond issue
8. Drop in Global Competitiveness ranking
9. GOTT helps finance St. Vincent Airport
10. Copyright body distributes TT$7 million in royalties
11. Caribbean Sea Initiative
1. China and GOTT sign loan and cooperative agreements
-------------- --------------
On behalf of the Chinese government, visiting Chinese
Communist Party official He Guoqiang signed an agreement
with the GOTT to provide a US$400 million loan facility
to finance the Alutrint aluminum smelter project. He and
his GOTT hosts also agreed to establish a joint committee
for trade, economic, and technical cooperation. In addition,
the PRC agreed to supply Trinidad with a TT$60 million
(US$10 million) interest-free loan to buy a linear accelerator
x-ray scanning and radiation detection system to enhance
cargo security.
2. T&T to sign trade agreement with EU
--------------
Minister of Foreign Affairs Gopee-Scoon announced that T&T
is ready to sign the Economic Partnership Agreement (EPA)
with the European Union (EU). The EPA is designed to further
trade reciprocity between Cariforum (Caricom plus the Dominican
Republic) and the EU. While T&T's goods and services will
receive duty free access to EU markets immediately, under the
agreement, tariffs on EU products will be gradually eliminated
with 82.75% of products entering T&T duty free within 15 years
and 86.9% in 25 years. The agreement has been controversial
in T&T, albeit less so than in some other Caribbean states.
3. Dubai, NYC support T&T's International Financial Center
-------------- --------------
During a trip to Dubai by Finance Minister Nunez-Tesheira and
Central Bank Governor Williams, the Government of UAE and
Dubai's International Financial Center agreed to collaborate
with the GOTT to establish an International Financial Center
(IFC or TTIFC). In addition to their meetings in Dubai, the
T&T officials also met with major financial firms in New York.
According to local reports, Lehman Brothers expressed interest
in becoming an IFC anchor tenant. PM Manning touted the success
of the GOTT missions to Dubai and New York, saying that T&T's
stability and geographic location as the "gateway" to Latin
America will enable it to attract top investors.
4. T&T deposits US$200m into its sovereign wealth fund
-------------- --------------
GOTT deposited TT$1.2 billion (US$200 million) of its petroleum
revenue from Q1 2008 into the Heritage and Stabilization Fund
(HSF),T&T's sovereign wealth fund. In May, the Central Bank
reported a fund balance of US$1,996 million. A rule governing
the HSF requires the GOTT to deposit a minimum of 60 per cent
of excess energy revenues, defined as the difference between
actual and budgeted energy revenues, into the fund.
5. No flour subsidy for T&T
--------------
The GOTT rejected requests by bakers and grocers to subsidize
flour following the second price increase this year and an
increase of over 60% in 2007. The state-owned National Flour
Mills increased the price of flour by 40% in March and 24%
on July 1, while competitor Nutrimix Flour Mill was closed
for expansion. Nutrimix Flour Mill, which supplied 40% of
the nation's flour before its closure, anticipates its
return to market will reduce pressure on flour prices.
6. Fuel hedge key to CAL success
--------------
State-owned Caribbean Airlines (CAL) reported that it is
ahead of revenue targets for the year. CAL president
Philip Saunders attributes this success, in part, to a
fuel hedge that enables the company to purchase jet fuel
at a favorable price until 2011. Despite numerous
requests, the company has declined to disclose more
information regarding the hedge. Several newspapers have
PORT OF SP 00000358 002 OF 002
suggested the GOTT is providing the state-owned enterprise
with subsidized fuel. CAL has adamantly denied this.
7. Successful bond issue
--------------
The GOTT issued TT$1.2 billion (US$200 million) in
government bonds to absorb the excess liquidity generated
by the sale of Royal Bank of Trinidad and Tobago (RBTT)
to Royal Bank of Canada (RBC). The bonds were auctioned
and received bids amounting to TT$1.976 billion
(US$329 million). Having reached the legislated borrowing
limit of TT$13 billion (US$2.16 billion) as a result of
the bond issue, Finance Minister Nunez-Tesheira asked
Parliament to raise the ceiling to TT$20 billion
(US$3.33 billion).
8. Drop in Global Competitiveness ranking
--------------
T&T dropped 17 places on the World Economic Forum's
Global Competitiveness Index, falling from 67 out of
137 countries in 2006 to 84 in 2007. The Global
Competitiveness Report identified crime, government
bureaucracy, a poor work ethic, and corruption as
the four key issues that precipitated the drop.
9. GOTT helps finance St. Vincent Airport
--------------
The GOTT approved the release of TT$78 million
(US$13 million) from the T&T-funded CARICOM Petroleum
Stabilization Fund to support the construction of a
new airport runway in St. Vincent. The fund was set
up in 2004 to assist other CARICOM countries in coping
with high energy prices. T&T contributes TT$420 million
(US$70 million) to this fund annually.
10. COTT distributes TT$7 million in royalties
-------------- -
The Copyright Organization of Trinidad and Tobago (COTT)
announced that it will distribute nearly TT$7 million
(US$1.17 million) in royalties this year, a 21% increase
from last year. While this increase may suggest an
improvement in copyright protection, the Recording Industry
Association of T&T (Riatt) claimed that recorded music is
still largely unprotected on the internet. It stressed
that T&T's Intellectual Property Office (IPO),a division
of the Ministry of Consumer and Legal Affairs, needs to
sign the WIPO Performances and Phonograms Treaty to further
strengthen T&T's regulatory framework and ensure proper
protection for artists. Having passed the Copyright
Amendment Act in May, which brings T&T into compliance
with WIPO, the IPO expects to sign the treaty by late
September.
11. Caribbean Sea Initiative
--------------
During an Association of Caribbean States (ACS) meeting,
a T&T official announced the Caribbean Sea Commission is
working to implement the "Caribbean Sea Initiative."
This effort seeks UN recognition of the Caribbean Sea as
an area of sustainable development. The hope is that
such a designation would curb exploitation and pollution
of the sea while allowing Caribbean states to pursue strong
development agendas.
KUSNITZ
SIPDIS
SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE
E.O. 12958: N/A
TAGS: ECON ETRD EAGR EFIN EINV EAIR KIPR SENV TD
SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS FOR MID- JUNE TRHOUGH
MID-JULY 2008
The following were notable economic issues in Trinidad & Tobago during
the second half of June and first half of July.
1. China and GOTT sign loan and cooperative agreements
2. T&T to sign trade agreement with EU
3. Dubai, NYC support T&T's International Financial Center
4. T&T deposits US$200m into its sovereign wealth fund
5. No flour subsidy for T&T
6. Fuel hedge key to Caribbean Air success
7. Successful bond issue
8. Drop in Global Competitiveness ranking
9. GOTT helps finance St. Vincent Airport
10. Copyright body distributes TT$7 million in royalties
11. Caribbean Sea Initiative
1. China and GOTT sign loan and cooperative agreements
-------------- --------------
On behalf of the Chinese government, visiting Chinese
Communist Party official He Guoqiang signed an agreement
with the GOTT to provide a US$400 million loan facility
to finance the Alutrint aluminum smelter project. He and
his GOTT hosts also agreed to establish a joint committee
for trade, economic, and technical cooperation. In addition,
the PRC agreed to supply Trinidad with a TT$60 million
(US$10 million) interest-free loan to buy a linear accelerator
x-ray scanning and radiation detection system to enhance
cargo security.
2. T&T to sign trade agreement with EU
--------------
Minister of Foreign Affairs Gopee-Scoon announced that T&T
is ready to sign the Economic Partnership Agreement (EPA)
with the European Union (EU). The EPA is designed to further
trade reciprocity between Cariforum (Caricom plus the Dominican
Republic) and the EU. While T&T's goods and services will
receive duty free access to EU markets immediately, under the
agreement, tariffs on EU products will be gradually eliminated
with 82.75% of products entering T&T duty free within 15 years
and 86.9% in 25 years. The agreement has been controversial
in T&T, albeit less so than in some other Caribbean states.
3. Dubai, NYC support T&T's International Financial Center
-------------- --------------
During a trip to Dubai by Finance Minister Nunez-Tesheira and
Central Bank Governor Williams, the Government of UAE and
Dubai's International Financial Center agreed to collaborate
with the GOTT to establish an International Financial Center
(IFC or TTIFC). In addition to their meetings in Dubai, the
T&T officials also met with major financial firms in New York.
According to local reports, Lehman Brothers expressed interest
in becoming an IFC anchor tenant. PM Manning touted the success
of the GOTT missions to Dubai and New York, saying that T&T's
stability and geographic location as the "gateway" to Latin
America will enable it to attract top investors.
4. T&T deposits US$200m into its sovereign wealth fund
-------------- --------------
GOTT deposited TT$1.2 billion (US$200 million) of its petroleum
revenue from Q1 2008 into the Heritage and Stabilization Fund
(HSF),T&T's sovereign wealth fund. In May, the Central Bank
reported a fund balance of US$1,996 million. A rule governing
the HSF requires the GOTT to deposit a minimum of 60 per cent
of excess energy revenues, defined as the difference between
actual and budgeted energy revenues, into the fund.
5. No flour subsidy for T&T
--------------
The GOTT rejected requests by bakers and grocers to subsidize
flour following the second price increase this year and an
increase of over 60% in 2007. The state-owned National Flour
Mills increased the price of flour by 40% in March and 24%
on July 1, while competitor Nutrimix Flour Mill was closed
for expansion. Nutrimix Flour Mill, which supplied 40% of
the nation's flour before its closure, anticipates its
return to market will reduce pressure on flour prices.
6. Fuel hedge key to CAL success
--------------
State-owned Caribbean Airlines (CAL) reported that it is
ahead of revenue targets for the year. CAL president
Philip Saunders attributes this success, in part, to a
fuel hedge that enables the company to purchase jet fuel
at a favorable price until 2011. Despite numerous
requests, the company has declined to disclose more
information regarding the hedge. Several newspapers have
PORT OF SP 00000358 002 OF 002
suggested the GOTT is providing the state-owned enterprise
with subsidized fuel. CAL has adamantly denied this.
7. Successful bond issue
--------------
The GOTT issued TT$1.2 billion (US$200 million) in
government bonds to absorb the excess liquidity generated
by the sale of Royal Bank of Trinidad and Tobago (RBTT)
to Royal Bank of Canada (RBC). The bonds were auctioned
and received bids amounting to TT$1.976 billion
(US$329 million). Having reached the legislated borrowing
limit of TT$13 billion (US$2.16 billion) as a result of
the bond issue, Finance Minister Nunez-Tesheira asked
Parliament to raise the ceiling to TT$20 billion
(US$3.33 billion).
8. Drop in Global Competitiveness ranking
--------------
T&T dropped 17 places on the World Economic Forum's
Global Competitiveness Index, falling from 67 out of
137 countries in 2006 to 84 in 2007. The Global
Competitiveness Report identified crime, government
bureaucracy, a poor work ethic, and corruption as
the four key issues that precipitated the drop.
9. GOTT helps finance St. Vincent Airport
--------------
The GOTT approved the release of TT$78 million
(US$13 million) from the T&T-funded CARICOM Petroleum
Stabilization Fund to support the construction of a
new airport runway in St. Vincent. The fund was set
up in 2004 to assist other CARICOM countries in coping
with high energy prices. T&T contributes TT$420 million
(US$70 million) to this fund annually.
10. COTT distributes TT$7 million in royalties
-------------- -
The Copyright Organization of Trinidad and Tobago (COTT)
announced that it will distribute nearly TT$7 million
(US$1.17 million) in royalties this year, a 21% increase
from last year. While this increase may suggest an
improvement in copyright protection, the Recording Industry
Association of T&T (Riatt) claimed that recorded music is
still largely unprotected on the internet. It stressed
that T&T's Intellectual Property Office (IPO),a division
of the Ministry of Consumer and Legal Affairs, needs to
sign the WIPO Performances and Phonograms Treaty to further
strengthen T&T's regulatory framework and ensure proper
protection for artists. Having passed the Copyright
Amendment Act in May, which brings T&T into compliance
with WIPO, the IPO expects to sign the treaty by late
September.
11. Caribbean Sea Initiative
--------------
During an Association of Caribbean States (ACS) meeting,
a T&T official announced the Caribbean Sea Commission is
working to implement the "Caribbean Sea Initiative."
This effort seeks UN recognition of the Caribbean Sea as
an area of sustainable development. The hope is that
such a designation would curb exploitation and pollution
of the sea while allowing Caribbean states to pursue strong
development agendas.
KUSNITZ