The Services Sector and Diversification
The Trinidad and Tobago Coalition of Services Industries has once again outlined its policy direction and recommendations to the overall diversification thrust of our national economy and the significance of the services sector in its submissions to the National Budget for the fiscal year 2018-2019. These recommendations were obtained after consultations with our membership, who are our main stakeholders and representative of over fifty associations that span a wide cross section of the services sector. To view the full submission please visit our website at www.ttcsi.org.
The recommendations fell within three main areas in which members were asked to give key proposals in an effort to not only increase the economic performance and competitiveness of the services sector but also to highlight the significance of the sector as the main driver of diversification. The following areas in which members gave their recommendations were in regulatory and institutional reform, trade facilitation and diversification of the economy. In each area there was a wide array of recommendations from service providers across the various industries, where measures were specific to the sustainable development of each sector and the overall thrust towards diversification.
In the area of regulatory and institutional reform, we recommend that there be significant reform to government expenditure which highlights the need for a decrease in spending on transfers and subsidies as it often times leads to a decline in productivity and economic decline as oppose to integrating citizens into the wider economy as productive economic agents. As such there should also be more emphasis on incentives specifically for small and micro firms within the services industries. The services sector employs over 80% of the workforce and also over 80% of the unemployed are service sector workers so redirecting money from transfers and subsidies would have a greater and more sustainable impact.
With respect to regulations that will impact all sectors, one of the key pieces of regulatory reform is required legislation for the facilitation of e- commerce payments by businesses engaged in digital trade. As such government should take active steps to encourage the banking sector to provide the facility for the processing of online payments by its customers. This should be done in light of business activity within a thriving services sector, where most of the trade is done electronically in the global market place.
In enhancing the country’s trade balance and facilitating the trade of services exports, there is also a need for more financial support and capacity building to service providers especially those with high export potential who may or may not be export-ready with respect to their ability to take advantage of market access opportunities. Likewise, the need for trade facilitation officers and commercial attaches at Trinidad and Tobago embassies should be implemented with the requisite level of experience in trade to effectively perform their duties in their capacity as trade liaison.
Most importantly, in heralding the call for diversification, we challenge the government to place its focus aggressively on the services sector and ramp up its efforts in developing the sector as a major income and a foreign exchange earner The TTCSI has identified several industries as having significant potential for export expansion. A study done by the TTCSI highlighted the sectors with the highest export potential in the short term, which are tourism, creative industries, information and communication technology, energy services and business and professional services The TTCSI, as the voice of the services sector, urges the Government to take its recommendations into consideration as we enter into a time where the recent decline in oil production and prices have coincided with economic decline and stagnation. It is now a necessity that economic diversification takes place with main driver being the services sector, it is only then we can envisage the sustainable development of Trinidad and Tobago.