Reinvesting profits

Government should include a clause in all agreements with multi-nationals seeking to invest here and/or to expand existing investments, which would require them to reinvest an across the board minimum percentage of their profits in the country. In turn, it should seek to discuss with companies already established here or with whom terms and conditions with respect to expansion have already been negotiated, for example Atlantic LNG re its Trains Four and Five, the question of a percentage of potential additional profits coming under the umbrella of a Profit Reinvestment Programme. Should Government adopt a Profit Reinvestment Programme as a new policy position it should begin with energy and energy based companies which, because prevailing favourable international prices for crude, natural gas and liquefied natural gas, are likely to continue within the foreseeable future would enable Trinidad and Tobago to further develop its infrastructure. In turn, the country with the additional revenues which would result would be in a better position to place needed emphasis on vocational and agricultural training and development programmes to provide for an even more bankable work force.

At present the bulk of the profits gained by multi-nationals and other foreign investors from their investments in Trinidad and Tobago go toward benefiting the countries where their head offices are located by way of revenue and dividends, and to a lesser though not insignificant extent the purchase of goods and services. As a result of this Trinidad and Tobago unwittingly contributes to the subsidising of the economies of far more developed countries, and while all investors, international, regional and domestic, have a right to expect the optimising of their returns to make their investments worthwhile, nonetheless an increased, although manageable portion of those profits made in TT should be reinvested here. The rationale for any reinvestment of profits in Trinidad and Tobago by foreign investors will be that in addition to turning more money around within the economy it will lead also to an improvement in our foreign exchange earnings, and ipso facto in our balance of payments position. The direct jobs created will in turn lead to the creation of yet more employment in service industries and thereby a strengthening of the country’s overall economic position.