Small shops collapse and Govt plans Independence fete as…

BUSINESS ELITES SCORE BIGGER PROFITS

PUBLICLY-TRADED companies have begun publishing their first post-pandemic financial reports.

And the fiscal records tell a startling story of major corporations earning even larger profits, in the process fattening the pockets of elite shareholders.

Now, it’s a safe bet that all business organisations would enjoy a better current season than during the commercial shutdown caused by Covid-19.

But balance sheets are revealing either higher profit than two years ago or on course to top prior earnings.

“We are confident our performance would continue along the current trajectory,” Angostura Holdings said in a statement that could be copied by most other corporate giants.

Larger profit-after-tax is being reported in the banking sector, fast food industry, multi-business conglomerates, pharmaceutical imports, and various other commercial enterprises.

Over the past few days alone, Republic and Scotiabank revealed historic profits, the 129-restaurant Prestige Holdings reported positive results, monopoly pharmaceutical importer Agostini’s had greater returns, and Massy announced good outcomes in all sectors.

That’s the general pattern across the domestic business world.

Profits are in season again.

In a free market system, there is nothing wrong with entrepreneurs raking in profits, a percentage of which is disbursed to investors.

The large earnings are, however, taking place in a shrinking Trinidad and Tobago economy, with the State spending almost $20 billion less than it did a decade ago on goods and services.

More than that, one-fifth of the workforce, about 150,000 employees, are either on the breadline or woefully under-employed.

Further, inflation is chewing away at consumers’ spending power.

The cost of food has been going up by an average of 7.1 percent in each recent month, with a peak last October of 7.6 percent.

That means that each month you have to dig deeper to put food on the table even while your salary remains the same or you have no significant source of income.

Anecdotal evidence suggests that more families are slumping into poverty, unable to buy essentials.

In its most recent report, the Central Bank said there was a 7.2 percent falloff in retail sales in the final three months of 2021.

Grocery sales fell by 16 percent – and that was before food inflation began galloping.

If you are improving your home, you would be confronted by staggering increases in the prices of steel – which is imported since the shutdown of the local manufacturer – and all other construction inputs.

In the first three months of this year, retail prices of building materials zoomed up by 11.9 percent.

So, with reduced consumer spending power, how are big businesses dancing in expanded profits?

Well, some corporations, such as Republic and Massy, have also invested in better-performing economies, including Guyana, whose gross domestic profit is projected to grow by an astounding 47 percent during this current year.

But T&T is the essential operating base for each corporation trading on the domestic Stock Exchange and presenting annual financial reports.

What, therefore, has facilitated such healthy financial results?

While big business has rebounded in style after the Covid-19 lockdown, about a quarter of small and medium-sized enterprises (SMEs) have gone the way of all flesh.

An estimated 6,000 SMEs did not survive the pandemic, being unable to pay rent, meet bank commitments, keep their staff – and hold onto the markets and consumers.

In some cases, these operations were undone by the banks which are now reporting historic billion-dollar profits.

Some big players in industry and commerce muscled into the fields of SMEs and benefited from economies of scale.

They, therefore, lapped up the markets left vacant by smaller competitors who were driven out of business.

All of that took place under the noses of a national administration that did little to protect business sardines in a predatory world of sharks.

Necessity is the mother of invention, and corporations deserve some credit for innovativeness and creativity during a time that demands adjustments.

But that would not have embellished the bottom line in a significant manner.

Instead, higher prices for a two-piece-with-fries would do the trick for KFC.

And yet while the nation observes 60 years of nationhood, there are no attempts to safeguard and develop the all-important SME sector, which typically employs about 70 percent of workers and contributes 40 percent of GDP.

The government remains callous, even as financial power increasingly resides within the tiny business community that was branded years ago by economist Lloyd Best as “the validating elite”.

The ruling regime has unveiled a calendar of Independence wine-and-jam to appease the masses and assuage their financial pain while the financial powerhouse gleefully counts the profits.

That’s life in T&T after 60 years of the red-white-and-black and the promise of a model nation.