"My roof is gone...I am at the complete mercy of the hurricane. House is flooding."
Chairman of the Economic Development Advisory Board (EDAB), Dr Terrence Farrell, yesterday lamented the inadequacy of incentives and other kinds of support for investment in export-generating activities.
Speaking at a news conference to launch the EDAB new website at its Nicholas Tower, Port-of-Spain offices, Farrell said: “Government’s economic policies are not conducive to the local private sector investing in T&T’s non-energy, export sector.
“We have in place a structure to facilitate incentives for the energy sector, but we have not crafted an incentive structure to encourage the local private sector to invest in export- generating activities.”
Farrell said government support, in the form of commercial diplomacy, would be necessary for the local private sector to penetrate new markets such as Cuba.
Farrell, an economist and former central banker, said the EDAB had completed seven advisory notes to the government since its appointment in November 2015. The advisory notes include recommendations on the deepening of relations between T&T and Cuba, the establishment of a heritage fund and current macro-economic policy management.
He said the board is working on a diversification roadmap, which it hopes to deliver in the next few weeks.
The roadmap will set a goal for T&T to increase the foreign exchange earnings from the non-energy sector to 40 per cent by 2030 from 15 per cent now.
Farrell said T&T is not going to diversify by focusing on one large industry or project as he believes that the process of developing export-generating industries would involve “a large number of small things, rather than just one thing.” He said: “There is not going to be the non-energy equivalent of a Point Lisas in the country’s future.”
Asked whether T&T’s exchange rate was appropriate for the diversification thrust, Farrell said one of the elements of diversification is export competitiveness and a factor in export competitiveness is the exchange rate.
The economist said an exchange rate can be a tool of development but it can also be used for macro-economic adjustment.
“One price does different things. As a tool of macro-economic adjustment, I have articulated on a number of occasions over the last few years that the exchange rate needs to be adjusted,” the EDAB chairman said.
On the issue of the legal battle by the Governor of the Central Bank of Barbados, Delisle Worrell, to keep his job, Farrell described the situation as “unfortunate,” but he added that for central banks printing money—financing a government’s fiscal deficit by loans from the central bank—is equivalent to a “mortal sin.”