Although part of the same government body, tourists will find that the two islands of Trinidad and Tobago are vastly different. In Trinidad, visitors discover an atmosphere removed from the relaxed expectations of Caribbean life – bustling towns, cultural attractions and lively nightlife are all commonplace on the island’s sun-drenched streets. Tobago, on the other hand, with its abundance of rainforests, unspoiled coral reefs and stunning landscapes, fulfils the remit for serenity and immersion in tropical beauty. A single glimpse at the island’s spectacular vistas makes for little wonder why it was the setting of choice for the tale of Robinson Crusoe.
Although the twin islands fit neatly into the standard profile of a tourist haven, Trinidad and Tobago is actually more apt a destination for the business traveller. Being a regional leader in energy, industry and financial services, the country has a history of attracting multinational corporations and international investment. Given its sophisticated transportation links and plans to diversify the economy in the near future, the country has the potential to establish itself as a thriving business hub for the entire region.
With two international ports, Trinidad acts as the country’s gateway to the Americas and a transhipment centre for the surrounding islands
Economic powerhouse
As the largest oil and natural gas producer in the region, Trinidad and Tobago is one of the wealthiest nations in the Caribbean. The energy sector, which accounts for more than 45 percent of its GDP and 80 percent of its exports, has enabled the country to boast one of the highest per capita incomes in Latin America. “Within the English-speaking Caribbean, Trinidad and Tobago is the economic powerhouse”, says Patrick Watson, Chairman of Trinidad and Tobago Securities and Exchange Commission. Although the past decade has seen a decline in oil production as greater focus has been placed on natural gas, the government is currently offering incentives for upstream activities in order to re-boost its oil reserves. Other sectors in which investment is being encouraged include construction, information and communications technology, agriculture and shipping.
According to its Ministry of Energy and Energy Affairs, being home to 11 ammonia plants and seven methanol plants, Trinidad and Tobago is the world’s biggest exporter of the former and the second-largest of the latter. It is also among the world’s major producers of liquefied natural gas, while other exports include urea, steel products, food processing, beverages, cement and textiles. “Trinidad and Tobago has the most powerful manufacturing sector in the English-speaking Caribbean, and probably in the Caribbean full-stop. Manufactured goods find [their way] into all the countries of the English-speaking Caribbean, and I’ve actually seen them in the French and Spanish speaking islands as well”, Watson tells Business Destinations.
Business allure
The country has a sophisticated economy for its size, with a favourable business climate that has been enhanced by various incentives offered by the government, including duty-free concessions and tax exemptions. The recent liberalisation of the Trinidadian dollar has also contributed to this environment. Accordingly, its stable and well-regulated fiscal system has made Trinidad and Tobago a financial centre for the region: “In Barbados, Jamaica and other countries of the Caribbean, the financial sector of Trinidad and Tobago is clearly present, but you do not see the opposite”, Watson explains.
Currently, the UK, US, Canada and Germany are among the biggest investors in the country, being largely involved in its dominant energy sector. However, aside from the oil and gas industry, several leading international corporations – including Microsoft, Nestlé, Unilever, Johnson & Johnson, IBM, Fujitsu and Scotia Bank – have taken advantage of the country’s growing economy by locating their regional operations in the country. Situated approximately 19km from a stream of international shipping routes to the US and EU, and with two international ports equipped to receive containerised shipments as well as other types of cargo, Trinidad acts as the country’s gateway to the Americas and a transhipment centre for the surrounding islands. “The country’s geographic location also makes it a near shoring hub for business outsourcing professionals seeking proximity to North America – for example, call centre operations and back-office operations”, says InvesTT, the national investment agency for Trinidad and Tobago.
Driving tourism
Some of the world’s major airlines offer direct, daily flights from North America, South America, Europe and the rest of the Caribbean via the country’s two international airports – a rarity for the region. “Trinidad and Tobago has become a lifeline for the Caribbean tourism industry, with the regional air carrier, Caribbean Airlines, providing connecting flights to the majority of the smaller islands”, InvesTT tells Business Destinations. In addition, the country’s largest port frequently services cruise ships and provides the facilities that they need in order to make their onward journeys to other Caribbean islands. A significant level of support is also offered to the region’s yachting industry – particularly as Trinidad and Tobago is situated beneath the hurricane belt, and so acts as a safe haven during the season.
According to the National Tourism Policy of Trinidad and Tobago, the majority of visitors to Trinidad are business travellers, while Tobago sees mainly Europeans on pre-paid package holidays landing on its shores. The country’s capital, Port of Spain, has a reputation for being among the most cosmopolitan cities in the Caribbean, with a multitude of art galleries, historic buildings, shopping districts and renowned restaurants providing corporate travellers with ample entertainment inbetween business activities.
The country’s status as an ideal destination for both business and leisure has begun to climb in recent years: in 2012, the European Council on Trade and Tourism named Trinidad and Tobago as the world’s best tourism destination – an accolade given to countries that have fulfilled criteria for ethical tourism, safety and respect for traditions and cultural heritage. In part, the country’s success in this area is due to the various religious festivals that are celebrated by locals and tourists alike, such as Holi, Divali, Hosay, Corpus Christi, Eid Al-Fitr and the Tobago Heritage Festival.
Additionally, there is the most celebrated of the country’s festivities, which also marks the peak of the tourism season: its world-renowned Carnival. The build-up begins as soon as Christmas is over and reaches its zenith during the two days prior to Ash Wednesday, which are officially set aside for the celebration.
Bright potential
However, despite its thriving young economy and its international appeal to business and leisure travellers alike, Trinidad and Tobago has various challenges to overcome in order to further boost its fiscal growth and secure its position as a leader in the region. The diversification of the economy is of imperative importance and requires affirmative action – while the theme has received adequate rhetoric, tangible steps have not yet been taken. As Watson says: “I am now over 60 years old – since I was a child I have been hearing about diversification away from the energy sector.”
As such, the overruling energy sector continues to pose a risk for the long-term economic sustainability of the twin islands: not only is such a heavy dependency on finite resources increasingly precarious, it also makes the country extremely vulnerable to external shocks and activities. The recent drop in global oil prices further highlights the need for the country to move away from its reliance on the sale of gas, oil and petroleum products. “One of the problems in having energy relative to the countries, is that when you are suffering, we are laughing. Of course the opposite is also true, and when this happens, we usually go into recession”, says Watson. Then there is the huge environmental impact caused by the energy sector – being such a strong power within this industry gives Trinidad and Tobago the biggest carbon footprint in the region. Damaging the local ecosystem threatens plans to diversify the economy – particularly those to bolster the tourism sector.
That being said, the country has the most sophisticated financial infrastructure in the Caribbean and is among the few islands that are not riddled with debt. Trinidad and Tobago is already a formidable economic entity in its own right. Although tourism is not a large sector with regards to the country’s GDP, if the islands were to focus on tapping into this revenue stream also, Trinidad and Tobago could become an economic hub for the entire Caribbean. This is even more conceivable given that the country is unique in the area in terms of its transportation infrastructure, meaning that it has the potential to significantly boost tourism in the surrounding islands, in addition to further advancing its own prominence.
The favourable climate for business is a crucial aspect in the continued development of the economy, particularly as it acts as an important tool for attracting international business to the country. All factors considered, Trinidad and Tobago is ripe for foreign investment and boasts a host of fiscal opportunities. With certain steps taken, not only could the economic performance of the country be propelled considerably via its logistical capabilities and infrastructure, but the same could be achieved for its neighbouring
countries as well.
