Inquiring minds in Trinidad and Tobago want to know: How will the new CARICOM, Caribbean Single Market Economy (CSME) Agreement, recently signed in Jamaica, affect small business owners in this country? Dr. Eric Williams must be smiling in his grave because his dream has finally come to past. Remember, he was the one who originally proposed the same idea that inspired the formation of CARICOM, his name for it was “Caribbean Federation”. But now that the ink has dried on CARICOM’s latest agreement the real concern for each country is exactly how this new initiative would affect its citizenry and their commercial markets. Undoubtedly, this is a boon for the corporate giants in the Caribbean they can easily expand there operations without feeling the pains of expansion. But what happens to the small and medium sized businesses, how would CSME impact them?
There is a growing cadre of small/medium businesses that are operating in saturated markets in Trinidad and Tobago. CSME has suddenly open doors to new opportunities in the form of additional markets. But be forewarned that before jumping into this market the business must conduct some sort of self assessment or audited to determine if such a move is not only feasible but profitable.
There is another cadre of business owners in Trinidad and Tobago who will ignore the potential this new initiative represents. Some, even if they are aware of the benefits, do not have the resources to expand their operations in T&:T or anywhere else. These are the businesses that will be most adversely affected by CSME. Their competition will start coming from countries like Jamaica, Guyana, Belize and all the other small Caribbean islands whose economy is not as robust as Trinidad and Tobago. CSME gives them the right to compete like locals.
For readers who are unfamiliar with the CSME Agreement, basically it legalizes the “free movement” of qualified citizens within Caribbean Member States. Currently Members States include; Trinidad and Tobago, Jamaica, Barbados, Guyana, Belize and Suriname. Within 30 days of the signing on March 31, 2006. The following countries are expected to sign a Letter of Intent to become a Member State in CSME: Antigua, Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines.
“Free Movement” is an “important pillar of CSME” where qualified nationals travel with ID cards between Member States. To phase in the free movement of Caribbean citizenry, the Member States have agreed that “qualified citizens” must fall under the criteria of university graduate, artistes, musicians, sports and media personnel, self employed people and any support staff associated with a CARICOM company.
According a document distributed by the Ministry of Labor, “CSME is intended to assist Member States of CARICOM to achieve their national objectives, such as full employment of all factors of production, improved standards of living and work, sustained economic development and expansion of trade and effective economic relations with other countries.”
Based on the content of the CSME Agreement, and the inevitability that there will be losers and winners in this new trade initiative the point of this article is to highlight the actions that should be taken by small and medium sized businesses in Trinidad and Tobago specifically and the other Member States as a whole.
The $64 question is: As an owner of a local small/medium company with maximized resources, how does a small business capitalize on this new initiative?
Let’s make it clear that not every business in the country will benefit from the CSME agreement. Many of them are too under capitalized, in survival mode and in all honesty, will become spectators of this new initiative. There are still others who, because of the particular stage of their business just are not able to take advantage of the CSME. It does not matter how you categorize your business right now, every business owner operating in Trinidad and Tobago must understand the benefits of this new initiative.
But before you categorize your business, answer this simple question honestly: Is my business operating at full capacity now? That is not an easy question to answer if you do not have the metrics to determine what is “full capacity”. And if you don’t have the numbers to tell you where you are, you are most likely not operating at “full capacity”. Granted most local small businesses do not have any idea of what share of the market they control, however any business can quickly use simple indicators to determine their capacity for expansion, for example:
For Retail Sales:
How fast do you turn over your inventory?
Can the business afford to double its inventory and overhead cost?
Is your gross monthly sales, over the last 6 months, going up, down or at a steady pace?
For Services
Do you have the manpower to expand your services locally?
Is there a possibility of opening another branch of your business
In Trinidad and Tobago?
Is the service available in the market you intend to enter?
How is your service different to what currently exist in the market?
When you have determined that CSME is a possibility for your company, your next step is to determine which country/market you would like to approach. Trinidad and Tobago residents will have to go to the Ministry of Foreign Affairs for an application. There is no application fee. The documents necessary for a university graduate to qualify includes: |
