I recently heard two seemingly different points of view from respected experts on the topic of recession in T&T. The first was from the President of the Chaguanas Chamber, Mr Richie Sookhai, who advised business owners that there “is no reason to panic” in the face of recession (Trinidad Guardian December 9, 2015). The other is from Mr Mariano Browne, who in a recent television interview, observed that many of us seem to be going about business as usual, oblivious to the severity of our present economic circumstances.
So, which of these points of view is correct? I respectfully submit that they both are. Mr Browne is right that the business community seems not to understand the danger we face from growing recessionary conditions. However, the Chamber President is also right, in that panic is not an appropriate response to our present circumstances.
T&T appears to be on the verge of a prolonged recession, and it is likely that there will be financial casualties as business conditions worsen over time. Recession and business failure go hand in hand.
I was a business consultant in the US in 2009 during the recession brought on by the collapse of the housing market and banking crisis. What followed almost immediately, was an epidemic of business failures and bankruptcies, with business owners surrendering assets to creditors, and taking shelter under Chapter 11 of the Bankruptcy Code. The reason for this high rate of business failure was that the US recession came on suddenly, as its financial system collapsed almost overnight, giving business owners very little time to prepare for what was to come.
In my view, T&T’s circumstances are different, and our recession is likely to start gradually and build in intensity over time, like labour pains. It is the difference between having a hurricane hit suddenly (the US experience) and having the MET office warn us that one is coming. The warning gives us time to plan and to take precautions to limit damage.
For T&T business owners therefore, this is not a time to panic, it is a time to prepare. In my experience, US business owners who had the foresight to address issues of financial efficiency, business discipline, lean management and internal governance, not only survived the recession better, but recovered quicker as economic conditions improved.
I therefore encourage T&T business owners to take the time now to assess the health of their business and evaluate its readiness to withstand stress.
I have designed a Business Health Questionnaire which I will gladly send (for free) to anyone who wishes to make preparations for the coming storm. You can contact me via email: rfullerton@rvfcfo.com.
Robert V Fullerton,
Director, CFO Solutions Limited,
Mt Lambert