EIL executive: Review Exim Bank

Krishna Ramlogan, chief operating officer of the EIL Group, supports the move by the Government to encourage greater stock market participation, especially from smaller businesses. “The creation of the junior stock exchange is a positive move and will give better access to capital to SMEs. It is left to be seen if our business sector is mature enough to access the same as T&T has more family-owned small to medium businesses as opposed to 25 shareholder-plus SMEs, but certainly, this is a very positive and innovative move.” He recommended that the proposed National Infrastructure Bank be expanded to include SMEs.

“Consideration should be given in the future to expanding the National Infrastructure Bank to include medium to large private sector businesses, as many companies need access to low, single-digit financing if they are to be internationally competitive.” Ramlogan said he is satisfied that the 2011-2012 budget will increase economic activity. “Overall, I think this was a good budget geared towards increasing economic activity and steps in the right direction towards diversification of the economy, while keeping the focus on the revenue streams from the energy sector and continuing to improve the social security net,” said Ramlogan in an e-mail response to questions from the Business Guardian.

Ramlogan commended the Government for taking steps to ensure that VAT refunds are timely done.
“There is positive news in the online filing and payment of taxes, and the intent for the timely issuance of VAT refunds. This is a very important matter to manufacturers, particularly when seeking to grow export markets as many are now doing, and I would urge that this be implemented by legislation so that manufacturers can know what to expect. “While I commend the move to remove VAT on certain asset classes in the energy sector, I think consideration should also be given going forward to extending similar incentives to the manufacturing sector, as this can impact on investment decision and competitiveness of our goods and services for export.”

Reviewing the Export-Import Bank
Ramlogan praised the Government for wanting to review the role of the Exim Bank of T&T. “This is also positive and, as additional details come forward, the manufacturing sector, through the T&T Manufacturers’ Association (TTMA), can have an input as the development of export markets is key to growth and sustainability of the manufacturing sector. “Our group has increased our plant capacities at all three of our manufacturing facilities, and while we have increased our export markets in 2011, we would be interested utilising the services of Exim Bank into additional markets.”

Underestimating local capacity
Ramlogan called for more attention to be given to manufacturing and agriculture as tools of diversification. “While I see emphasis on the diversification in the downstream energy sector, ultimately, these are still industries exposed to commodity prices and worldwide demand and supply factors, as we saw in the crash with oil, gas, methanol and ammonia prices, and I think more attention and acceleration needs to be placed on other sectors, such as manufacturing and agriculture.”

He urged the private sector to become more involved in large projects. “The mega projects have traditionally not done well under state ownership. They have been divested to foreign multinationals and we should instead seek to partner with the multinationals who bring the expertise, but also engage local private sector businesses in discussions of equity participation and stock market listings to ensure local participation and ownership of the benefits of the country’s natural resources. We underestimate the courage and capacity of our local entrepreneurs and businesses.”