STATEMENT BY THE GOVERNOR FOR TRINIDAD AND TOBAGO SENATOR, DR. THE HONOURABLE BHOENDRADATT TEWARIE

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1 STATEMENT BY THE GOVERNOR FOR TRINIDAD AND TOBAGO SENATOR, DR. THE HONOURABLE BHOENDRADATT TEWARIE Mr. Chairman, Honourable W. McKeeva Bush, Distinguished Prime Ministers, Fellow Governors, President of the Caribbean Development Bank (CDB), Dr. Warren Smith, Vice Presidents, Directors, Management and Staff of the Bank, CARICOM Secretary General, Distinguished Delegates, Observers, Ladies and Gentlemen: It is an honour for me to represent the Government and people of the Republic of Trinidad and Tobago at the Forty-Second Annual Meeting of the Board of Governors of CDB. On behalf of the Trinidad and Tobago Delegation, I would like to express our sincere gratitude to the Government and people of the Cayman Islands for the friendship and hospitality extended to us since our arrival here. Rest assured that we treasure your warmth and generosity. I would also like to congratulate the Bank and the Government of the Cayman Islands on the excellent arrangements made for the hosting of this meeting. International and Regional Performance Mr. Chairman, this meeting takes place against the backdrop of continuing challenges to the stabilisation of global growth. The signs of improvement are encouraging due to positive though declining growth in emerging and developing economies such as Brazil, Russia, China and India. The United States appears to be headed in the right direction on the upswing as the labour and housing markets begin to rebound. However, the lingering problems of sovereign debt in Europe will continue to temper the outlook for growth and the crisis in Greece will continue to pose a major challenge not only to the Euro but to the integrity of the European Union itself. Any crisis in Europe will have inevitable but perhaps unpredictable consequences for an inter-connected world. It is acknowledged that trends in growth in developed market economies whether positive or negative, as well as developments in international commodity and financial markets, affect the fortunes of Caribbean economies, due to their highly open nature and their connectedness to the larger economies through finance, tourism and trade. On average, regional growth still has not returned to pre-crisis levels as Caribbean economies continued to struggle in 2011 to achieve pre-2008 levels of economic growth. It is estimated that the average real economic growth for the Region for the first half of 2011 was 1.7 per cent (%), compared to 0.2% for the corresponding period in Most economies of the Region, registered either relatively low or negative growth rates, connected as they are to Europe and the United States of America, however, Guyana and Suriname did better.

2 - 2 - Inflation is on the increase, due in large part to high and rising commodity prices and to the importation of food. In this context, the average inflation rate for the Region in the first half of 2011 rose to 6.5%, up from a rate of 4.8% recorded in the same period in Real Gross Domestic Product (GDP) growth in the tourism intensive countries of the Region is improving as tourist arrivals increase, however, the rate of increase is influenced by employment conditions in the main tourism markets and the general economic environment attending these supplier countries. Mr. Chairman, projected growth rates for the year 2012 are promising, as all of the Caribbean economies are expected to experience a positive increase in economic activities. However, the evidence suggests that this emergent recovery in growth is still not far reaching enough to be reflected in improved employment or more robust business activity. Stimulating business activity, quickening the pace of investment decisions, and unemployment all remain formidable challenges across the Caribbean region. Trinidad and Tobago Context Mr. Chairman, while the Trinidad and Tobago economy stood relatively strong, compared to some of our partners in the Region, we were not by any means immune to a slowdown in economic growth as real growth declined by 1.4% in Reductions in the petroleum sector, evidenced by a 2.3% decline in exploration and production and not withstanding new oil finds and the promise of other oil and gas finds, has tended to solidify our commitment to the diversification of our export earning potential away from a maturing oil and gas sector. We anticipate a return to growth in 2012, but we know that full economic recovery will be a slow process. We have had our positive moments. For instance, the non-energy sector has experienced marginal expansion from 53.3% contribution to real GDP in 2010 to 55.5% in 2011, but much more is required to ensure that our GDP growth regains momentum. The Government of Trinidad and Tobago is committed to sustainable development as the framework for growth. Three policy documents guide our action going forward: Our Manifesto of 2010 which identifies seven pillars within a Sustainable Development Framework as follows: people centred development; poverty eradication and social justice; national and personal security; information and communication technologies; a more diversified, knowledge intensive economy; good governance and people participation; and securing our place in the world through foreign policy. Our Medium-Term Policy Framework which lays the foundation for economic transformation through diversification and identifies five priorities: agriculture and food security;

3 - 3 - crime containment and law and order; economic growth, job creation, competitiveness and innovation; poverty reduction and human capital development; and healthcare services and hospitals. Our Sustainable Development Policy which addresses the issue of balancing the demands of economic growth, community welfare and social cohesion, and environmental concerns. This latter document will be presented at the Rio + 20 Conference by the Honourable Prime Minister of Trinidad and Tobago, Mrs. Kamla Persad-Bissessar. Our Medium-Term Policy Framework emphasises creation of an innovation driven, knowledgebased economy through the restructuring of the education system; providing a conducive business environment which supports new strategic sectors in which investors and entrepreneurs alike can become internationally competitive; and investing in the technological requirements that provide the supporting framework for the kind of change that will harness competitiveness and stimulate diversification and innovation. Fostering a culture of innovation requires a restructuring and rethinking of the types of goods and services produced to improve our level of competitiveness. Trinidad and Tobago intends to look at ways in which we can nurture entrepreneurship, stimulate industrial growth through local investment and expansion of markets, and attract foreign direct investment targeted at specific industries that can provide a higher value-added, expand the service industry and promote green industry in order to drive economic growth. We have just issued a call for innovations and inventions backed by 10 million Trinidad and Tobago dollars of government funding. In mid-june, we are going to turn the sod for an Incubation Facility, which the Caribbean Industrial Research Institute (CARIRI) will manage and CARIRI has test marketed a range of new products for which we are going to invite investors. We are developing the Chaguaramas peninsula and the Tamana Intec Park, but also five new growth poles one in Tobago and four in Trinidad. An examination of our marginally decreased unemployment figures from 5.9% in 2010 to 5.2% in 2011 indicates that more needs to be done in order to increase employment, improve economic inclusion and reduce poverty levels. At the end of 2009 poverty levels were close to 18%, 2011 indications are that they are around 14.7% so we are making small progress. As we approach the 2015 deadline for the achievement of the Millennium Development Goals (MDGs), Trinidad and Tobago s progress is not without its share of obstacles. We remain challenged by the impact of environmental conditions such as climate change and natural disasters which impede economic growth. The Bank s Borrowing Member Countries (BMCs) are familiar with this reality. But we press on with our emphasis on the poor and vulnerable groups in society and on things like ensuring that our healthcare service delivery is improved. At the present time we have achieved about 90% of our Millennium Development Goals and we trust that we will achieve 100% or very close to it by Improving citizen security and maintaining law and order continues to demand a collaborative effort on the part of all stakeholders. As a Government, we have begun to implement the appropriate measures to contain criminal activity through effective law enforcement and policing; social interventions and judicial reform. Notwithstanding these efforts, we must all unite as a Region with the intention of reducing the effects of this scourge by sharing our experiences and collaborating to effectively protect our borders and maintain the safety of our citizens. Serious crimes took a 25% dip in 2012, compared to the

4 - 4 - same period last year. Crime continues, but crime is also down in Trinidad and Tobago. The illicit drug industry is in dire need of collaborative action for containment. We consider our relationship with the Bank to be a strong one. I take this opportunity to commend the Bank s staff on the completion of Trinidad and Tobago s Country Strategy Paper ( ) well aligned with our Medium Term Policy Framework. We look forward to working with the expertise and considerable knowledge that resides in the Bank to align investment with needs and to achieve impact and results. Review of Bank Performance Over the past year, the Bank must be commended for its determination to build resilience in the economies of its BMCs through capacity building, improving their level of competitiveness and reducing the risk of vulnerable sectors in the economy such as small and medium-sized enterprises. It is with some concern, however, that I draw attention to the reduction in the amount of loan approvals by 46% from and the paucity of loan approvals to the private sector. Recognising the private sector s role in the promotion of economic growth and poverty reduction, the Bank s initiative to assist in private sector development as an area for greater support and the introduction of interventions that foster this must be commended. However, what is the use of good intentions if actions required to support these are insufficient. In our region productivity needs to improve; respect for timelines and deadlines need to be cultivated and competitiveness needs to be vigorously pursued. We need to collaborate to make meaningful diversification happen and we need to use our creativity and imagination to facilitate innovation led growth. As the Special Development Fund (SDF) Seventh Cycle comes to a close and we continue the negotiations for the Eighth Cycle of the SDF, the Bank must place emphasis on improving the level of approvals which declined in 2011 from the previous year. The Bank s initiative to place emphasis on the issue of Citizen Security as a theme for the SDF Eighth Cycle is noteworthy as it demonstrates the recognition of the fact that a major hindrance to economic growth in BMCs is the rising levels of crime and violence which feeds the cycle of poverty and hinders our progress in attaining the MDGs. Recognising too, the important role that Civil Society plays in the promotion of national development and the need to strengthen civil society participation as a critical component to improve governance and capacity development in BMCs is timely, as Trinidad and Tobago embarks on the establishment of a Civil Society Board as a way of formalising the critical input from this group. The Civil Society Board will be integrally linked to the Economic Development Board in Trinidad and Tobago and will therefore influence the policymaking process. Moving Forward Mr. Chairman, our region may be facing serious development challenges, these include a limited number and range of products and markets with concentration on natural resources or service-based products, inflexible labour markets and lower levels of productivity and export competitiveness. Competitiveness is one of the challenges of the Region but it is also a necessary prerequisite for economic growth and development, as one of the main platforms for ensuring long-term job and prosperity growth is through the fundamental improvement in competitiveness. This would enable the Region to compete successfully in international markets, while improving the living standards of our citizens.

5 - 5 - In this regard, Mr. Chairman, I wish to request the support of all colleagues here present, as my country Trinidad and Tobago bids to host a unique annual regional forum in 2014 the Americas Competitiveness Forum. This forum which is being hosted in Colombia this year and Panama in 2013, brings together representatives of countries to foster dialogue, exchange experiences and adopt initiatives to strengthen and promote competitiveness in the Americas. Indeed at the forum in the Dominican Republic in 2011, the Consensus of Santo Domingo was crafted and several principles were agreed upon to advance the wider Region toward becoming more competitive and prosperous, these included: establishment of effective institutions responsible for promoting competitiveness within the private sector; prioritising the development of human capital and the acquisition of new skills; and positioning innovation and high impact entrepreneurship as a determining factor for competitiveness. It is my hope that Trinidad and Tobago will have your support for, and full participation in, this Americas Competitiveness Conference in 2014 in Port of Spain. We look forward to support for this venture from CDB. We already have a pledge of support from the President of the Inter-American Development Bank. Conclusion Mr. Chairman, I wish to reiterate that as a Region, let us strive to be a key part of an emergent global economic force which includes the Caribbean and the progressive economies of Central and South America. I am confident that the Bank s resourcefulness, capability and comparative advantage will help BMCs improve our quality of life for all our citizens. We need to build our nations. We need without hesitation to create a single regional market space with an ever-widening circumference, we need to make and do things, we need to be focused and targeted in our approach on results and we must make decisions and act on them expeditiously. In closing, on behalf of the Trinidad and Tobago Delegation, I wish once again to extend my sincerest gratitude to the Government and people of the Cayman Islands for their hosting of this meeting and for the warm hospitality and effortless generosity. I extend best wishes to all colleagues from around the Region and across the world and express the wish and hope for a successful meeting and meaningful deliberations. I thank you.