GERARD BEST goes one on one with BEVIL WOODING, the Caribbean’s very own technology ambassador

BEVIL WOODING

Since news broke in the international media that a Trinidad and Tobago technology evangelist was one of only seven persons in the world trusted with keys for the Internet, the spotlight has turned to this tiny Caribbean state and to Bevil Wooding, the man with a key to the Internet. Wooding is the Chief Knowledge Officer at Congress WBN, a Trinidad-based NGO with operations in over 95 countries. He was selected by ICANN (Internet Corporation for Assigned Names and Numbers) from among 60 candidates to serve as the “trusted community representative” from Latin America and the Caribbean. ICANN is the organization responsible for managing the systems that store, translate and retrieve the numerical address equivalents of familiar web addresses we use every day, such as google.com, uwi.edu or wikipedia.org.

What exactly is this key to the Internet?
I am one of seven people, designated Recovery Key Share Holders, entrusted with a special cryptographic ‘smart-card’ that holds part of a key used to generate the “Domain Name Server Security Extensions” (DNSSEC) protocol that protects domain names on the Internet. In the event of a natural disaster or major Internet security breach, we could be called upon to fly to a secure location in the United States where at least five of these encrypted key fragments must be combined as part of a process to restore the security of the Internet’s domain name system (DNS). You can think of it as ICANN’s disaster-preparedness plan for the Internet.
The keys don’t actually restart the Internet. In fact, the Internet will not shut down or collapse, even if the DNSSEC system failed, contrary to some reports in the international media. DNSSEC sits on top of ‘the Internet’ as an additional security layer for end users to validate DNS data and to confirm they have a connection to a legitimate operator and not a spoof. If DNSSEC were to fail, the underlying Internet communication medium will continue to function as normal.
How were you actually chosen? Was it by election, or were you “appointed”?
As part of a joint effort to secure the DNS, ICANN made a call for volunteers to act as trusted representatives of the Internet community. The selection process was based on Statements of Interest, solicited from the Internet community and published online. ICANN then selected 21 persons to be Trusted Community Representatives (TCRs) from among 60 candidates from around the world. I applied and was selected to serve as one of seven Recovery Key Share Holders. As a TCR, I am effectively representing Latin America and Caribbean.

For years we have been hearing that Latin America and the Caribbean must make the transition to knowledge-based economies if they are to have any chance of sustainable development. Are Caribbean governments and business making the best use of technology?
The short answer is ‘they are trying’. However, realizing the true potential of Information and Communications Technology (ICT) is still hampered by a number of factors. One can ask, is there a coherent regional approach to ICT strategic planning? Is our education system providing the human resource pool to supply Caribbean business with the right mix on competence and correct perspective needed to innovate, adapt and thrive? Are our regional institutions effective or even relevant to the current landscape?

In practical terms, what are some of the obstacles preventing Caribbean governments and business from making the best use of technology?
Accelerating the spread of the Internet, encouraging development of Internet-based economic activity and reaping consequent social benefit in the Caribbean is dependent on reducing Internet connectivity and bandwidth costs and improving quality of service. Realizing the true potential of Information and Communications technology is still hampered by a number of factors including: the lack of political will to prioritise adoption of ICTs as a viable and sustainable alternative to traditional economic pillars such as agriculture and tourism; the inadequacy of support systems for incubating and facilitating technology innovators and entrepreneurs; insufficient public awareness and limited advocacy group pressure on service providers and policy makers; and limited representation at international fora where decisions are taken that have implications at the national and regional level.
Counteracting these forces requires that in addition to Governments, the private sector, academia and civil society groups must be actively engaged. I am hopeful that new administrations across the region can help facilitate new approaches to national and regional development. However, the main responsibility for political re-prioritization lies with Caribbean societies. As a collective whole, we must all push for the adoption of innovation through ICTs as a viable and sustainable alternative to traditional economic pillars such as agriculture and tourism. These are just some of the issues; there are many more.

Bernadette Lewis

Bevil Wooding has long facilitated seminars and workshops on e-government, ICTs and national development in the US, Africa, Europe and the Caribbean. More recently, working with the Caribbean Telecommunications Union, he has been one of the architects behind the Caribbean ICT Roadshow, a regional initiative now internationally recognized as a model for promoting innovation in the use of ICT at every level of society. Evidently, Wooding’s work in promoting Internet Governance globally and the use of ICTs as a tool for regional development is causing the world to take notice.
For those who have worked with Wooding, his appointment was no surprise. Richard Jimmerson, Chief Information Officer, American Registry for Internet Numbers (ARIN), said of Wooding, “I’ve worked with him on various efforts over the last several years and have always been impressed with his dedication to building Internet infrastructure and the Internet community. In its search for trusted community representatives, ICANN has certainly found the right man.”
Wooding takes the responsibility in stride, stating that the security of the Internet is essential to its role as a major development platform not just for governments and businesses but for social transformation.
“Business innovation, Government service delivery, national and regional competitiveness, social empowerment and human development are all now inextricably linked to the Internet and access to Internet-based technology and systems. The role and selection of the Trusted Community Representatives was conceived with principle squarely in mind,” he said.
The Internet disaster preparedness plan was drawn up by ICANN, a not-for-profit organization based in the US with a mandate to keeping the Internet secure, stable and interoperable. Shernon Osepa, Manager of Regional Relations (Caribbean) at ICANN, stated, “Mr. Wooding’s appointment as a Trusted Community Representative is fitting recognition for his substantial contribution and proof that hard work and dedication has reward. Not only has Mr. Wooding been involved in Internet Governance in the Caribbean since its inception, but his remarkable foresight into general ICTs issues puts him amongst the top regional visionaries I have met.”
Wooding effectively represents the Caribbean and Latin America in this elite, global chain of trust. Upon news of Wooding’s appointment, Sebastian Bellagamba, Regional Bureau Manager for Latin America and the Caribbean at The Internet Society (a non-profit based in Geneva, Switzerland that provides leadership in addressing issues that confront the future of the Internet), said, “Mr Wooding is not only one of the leading Technology speakers to emerge from the region; he is an accomplished practitioner. From his work on promoting Internet Exchange Points and mobilizing the Caribbean Network Operators Group (CaribNOG) to building innovative solutions relevant to the needs of developing countries, he is respected as a man who practises what he preaches. His vision for and passion for leveraging ICTs for Caribbean development are nothing short of inspirational.”
Wooding was the lone representative from the Caribbean to participate in the landmark Internet event. Bernadette Lewis, Secretary General of the Caribbean Telecommunications Union (CTU), said of Wooding, “His technical expertise, international experience and his clear commitment to regional development make him a unique and invaluable Caribbean resource.”
Wooding, a man of many hats, serves as an Internet Strategist for Packet Clearing House (PCH), a US-based not-for-profit research organization that works to support critical Internet infrastructure for Governments, Internet Service Providers (ISPs), policy-makers, and research communities regionally and internationally. Wooding has been raising awareness in the region of the necessity of facilities and policies to support the growth of the “internet economy” in the Caribbean. His work on promoting Internet Exchange Points (IXP) has taken him to Washington D.C. where he presented to an audience of Caribbean Government Ministers and Permanent Secretaries on the subject. His keynote address there has prompted Governments across the region to take action to support the development of domestic internet content by pushing for IXPs in their countries. An IXP is a physical infrastructure through which Internet service providers (ISPs) exchange Internet traffic between their networks at no cost.
“St Vincent must not be left behind in the digital age,” said Dr Jerrol Thompson, Minister of Telecommunications, Science, Technology and Industry of St Vincent and the Grenadines, addressing the importance of establishing a domestic IXP. Minister Thompson was speaking at the opening of a CTU Symposium last August. He acknowledged that a local IXP is an essential prerequisite for the development of a robust, Internet-based domestic economy and for the delivery of new, citizen-centric Government services.
In St Kitts and Nevis, Glen Phillip, Government Minister with responsibility for Information Technology, reiterated his government’s commitment to supporting the establishment of an IXP in St Kitts as a national development priority. He acknowledged that establishing a domestic IXP could bring tremendous benefit to the Federation, and it must therefore be a top priority if the country’s technology-based development agenda is to be fully realised.
“Countries all across the world have realised and exploited the benefits of IXPs,” said Mrs. Allison Jean, St Lucia’s Permanent Secretary in the Ministry of Communications, Works, Transport and Public Utilities. Jean declared her government’s intention to facilitate the establishment of an Internet Exchange Point (IXP). She noted that IXPs were conspicuously absent, not just in St Lucia but in the wider English-speaking Caribbean.
“Across the world, people are realising that taking advantage of the Internet and internet-based technologies is not primarily a technology issue; it is a human development issue,” Wooding said. “Technology is supposed to facilitate development. This means the appropriation of technology must ideally be guided by clear leadership and shaped by articulated vision. This is true whether you running a Government, managing a business or at a personal level, inside of your home.”
For years, Wooding has been serving as a de facto Technology Evangelist for the Caribbean by bringing international attention to ICT issues relevant to the region. But as Chief Knowledge Officer at Trinidad-based non-profit, Congress WBN (C-WBN), Wooding’s reach extends far beyond the Caribbean basin. C-WBN is focused on value-based leadership development initiatives, and its operations include networks of professional groups, educational institutions, businesses, churches, individual national leaders and university students in over 95 countries.
Commenting on his work through Congress WBN, the CTU and PCH to promote the development and adoption of the internet in the region, Wooding said, “Our countries should in no way be deprived of the full benefits the Internet can bring. Governments and private and civil society groups must continue to work together to realise this goal of transforming the region from being a net technology-consumer to a net technology-producer. This is vital if we are to preserve our Caribbean identity and if we are to ensure that our children and are not denied the opportunity to be equal participants in the global Internet. I take this responsibility seriously and will continue to bring awareness to both the issues and the opportunities we face in our journey toward a better Caribbean society.”

By Reay Greaves

Trinidad and Tobago
• Budget proposals for the fiscal year 2009–2010, will be read in Parliament on September 7, three days after the opening of the new parliamentary term.

 • The National Flour Mills (NFM) has posted a half-year after-tax profit of $0.4 million for the half-year period ending on June 30, 2009.

• The Central Bank announced that headline inflation fell to 8.4 percent on a year-on-year basis in June, from 10.3 percent in May. This was the first time in the past year that inflation had reached single digits.

 • The Trinidad and Tobago Chamber of Commerce and the Trinidad and Tobago Manufacturers’ Association say they are concerned about the decision by one of the country’s biggest shipping lines to increase its demurrage fees. As a result of this hike, prices of goods and services will likely increase in the lead-up to Christmas. (Demurrage is a charge required as compensation for the delay of a ship, freight car or other cargo beyond its scheduled time of departure.)

• The ANSA McAl conglomerate recorded a 0.5 per cent (estimated $7.5 million) increase in its profit margins for the year thus far, when compared to last year. However, the conglomerate saw the group’s top line turnover go down by 6.8 per cent.

• First Citizens and Scotiabank reduced their prime lending rate to 11.50 and 11.75 percent respectively, from 11.75 and 12 percent.

• Scotiabank reported total assets of $16.8 billion and an after-tax profit of $330 million as it completed its third fiscal quarter at the end of July.

• For the first half of 2009, Trinidad Cement Limited (TCL) reported a decline in revenue of $153 million—a 14 percent decline when compared to the same period in 2008. Group chairman, Andy Bhajan, and group chief executive, Rollin Betrand, blamed the economic downturn for the decline.

• While most companies are still feeling the effects of the economic downturn, The West Indian Tobacco Company (WITCO) saw increased profits of $120.9 million for the six-month period ended June 30, 2009. This represented an increase of $27 million when compared to the same period last year.

• The Ministry of Energy and Energy Industries held its first consultative meeting for stakeholders on the Government’s proposed new petroleum fiscal package for the petroleum sector.

• The Energy Services Sector Survey conducted by the South Chamber of Industry and Commerce recorded a drop in profitability, and the Chamber remains worried about the global economic uncertainty. In its Energy Services Sector Survey for the second quarter of 2009, the Chamber found that levels of optimism and business confidence improved slightly in the second quarter, “possibly due to the upswing in energy commodity prices since April.”

• Energy giant bpTT said it has reduced the amount of money it plans to spend in T&T on oil and gas projects in 2009. Chief Executive Officer Robert Riley said the company brought its capital expenditure down from a projected US$1 billion to US$600 million this year.

• State-owned Petrotrin closed a US$850 million bond to raise money to finance a gasoline optimisation project which is said to be a year behind schedule and more than US$3.6 billion over budget.

• The Ministry of Energy and Energy Industries awarded seven licences for sand and quarry blocks.
• The Point Lisas Industrial Port Development Corporation (PLIPDECO) saw a $15 million fall in second-quarter revenue. Chairman Rolph Balgobin says the decline was attributed to reduced domestic cargo at its Point Lisas port.

• The Central Bank announced that Trinidad and Tobago’s economy contracted by 3.3 percent in the first quarter of this year as activity in the nation’s energy sector declined by 2 percent.

• Malcolm Jones, chairman of State-owned Petrotrin, was appointed chairman of NGC. Jones replaced Keith Awong who resigned as chairman.

• Tourism Minister Joseph Ross announced that Chinese firm, the Beijing Liujian Group won the $233 million bid to restore and upgrade Maracas Beach.

• New Jersey-based AM Best downgraded CLICO to C (weak) from B (fair) in a rating action. In a statement sent from its US offices, AM Best said, “the ratings remain under review with negative implications.”

• The Caribbean Court of Justice (CCJ) dismissed claims by the Trinidad Cement Limited (TCL) against Caricom’s decision to suspend the Common External Tariff (CEF) on cement imports.

• Cabinet approved $5 billion to help the recovery of cash-strapped insurance giant CLICO.

 • The Trinidad and Tobago Electricity Commission (T&TEC) announced that from September 1, commercial customers would see a one percent increase in their electricity rates.

Jamaica
• Skylan Airways, a Jamaican-owned and operated air charter service, had its inaugural flight from the Norman Manley International Airport in Kingston to Sangster International Airport in Montego Bay.

• Standard & Poor’s (S&P) downgraded Jamaica’s rating to CCC+ and said the outlook on the country remains negative. The rating agency also cut the credit ratings on Air Jamaica and National Commercial Bank of Jamaica, bringing them in line, as its policy dictates, with Jamaica’s sovereign ‘CCC+’ rating on local and foreign currency debt, down from ‘B-.’

• National Commercial Bank (NCB), in a move aimed at cutting back on bad debts caused by delinquent credit card holders, started to block credit card accounts that were 15 days overdue.

• The Bank of Jamaica (BOJ) announced an additional 100 basis points reduction in open market instrument interest rates.

• The Bank of Jamaica (BOJ) received the first allocation of money from the International Monetary Fund (IMF) under the special drawing rights (SDRs).

• The International Monetary Fund (IMF) cleared the way for Jamaica to get approximately US$320 million (J$28.5 billion) from the fund by early September.

• The Ministry of Tourism signed an agreement with US Airways which provides for an increase in airlift out of the United States to Jamaica.

Suriname
• Aluiminum producer, Alcoa, sealed a deal to buy Australia-based BHP Billiton’s bauxite and alumina operations in Suriname.

Haiti
• The World Bank and Haiti signed a US$5 million grant to strengthen Haiti’s agriculture management and support its sustainable development.
Venezuela
• Venezuela’s State oil company, PDVSA, and BP Plc resumed production at the 113,000 barrel per day Petromonagas project in the Orinoco heavy crude region, after it had suspended output in January to meet OPEC cuts.

• Venezuela reaffirmed that no plans are being considered to require more money up-front from poor Caribbean and Central American nations buying oil on preferential terms under its PetroCaribe programme.

• Gross domestic product shrank 2.4 percent in the second quarter representing the first contraction for the Venezuelan economy since 2003.

Antigua & Barbuda
• The Government put an end to fuel subsidies.

• The Government announced that the Venezuela-led Bolivarian Alternative for the Americas (ALBA) provided US$50 million to help the country overcome a fiscal shortfall and pay hundreds of civil servants outstanding salaries and wages.

Other Regional News
• The Inter-American Development Bank (IDB) approved a US$1 million-dollar grant to support the design and implementation of an integrated disaster risk management plan for Guyana.

• The Economic Commission for Latin America and the Caribbean (ECLAC) and the World Tourism Organization (UNWTO) agreed to deepen their cooperation to strengthen statistics systems, tourism satellite accounts and tourism economic indicators in the region.

• The Bahamas Government suspended its Educational Guarantee Loan Programme (EGLP), saying too many students were defaulting on their loans. Educational Minister Carl Bethel said more than 61 percent of loans had not been serviced.

• The St Kitts Co-operative Credit Union (SKCCU) reported a surplus of EC$664,989 for the year 2008, the highest surplus to date in its 27-year-old history.

• The Montserrat telecommunication sector has been liberalised. A new Information Communications Development Act which came into force on August 1, opened the door to fair competition in Montserrat’s telecommunications sector.

• The Cuban Government released statistics showing an increase in its output of diesel and fuel oil in the first half of the year; but the figures also showed a drastic fall in gasoline production for the period.

• Sandals Resorts International (SRI) announced that it bought over the Four Seasons Resort Great Exuma in the Bahamas.

• The Peoples’ Republic of China granted a concessionary loan of US$35 million to the Government of Dominica for the construction of a new state-of-the-art college.

• The Butterfield Bank (Bahamas division) terminated six employees as part of its restructuring efforts to fit difficult market conditions.

Cocoa farmers work on a plan to revive the industry, as low cash flow, high costs and lack of interest
put T&T’s famed cocoa in peril

By Lorraine Waldropt

Dr Darin Sukha, right, examines a cocoa pod with Gary Guittard of Guittard Chocolate Company, USA, at Henry Estate, Prism Agri Estates, Moruga.

Moheepath got stung by a scorpion last Sunday. He was sambling cocoa (colloquial term for gathering cocoa pods in a heap) on the estate where he works. He didn’t bother to go to the health centre which was miles away, and besides, he says, the doctor is never on-site. Instead, he killed the scorpion, burned it and soaked its remains in rum. “This potion does heal you when you get a scorpion sting and it does build your resistance for the next time you get sting,” he explained. Of course there would be a next time; scorpions are common pests in the cocoa heap.
The estate he works on is 30 years old, the “bossman”, as he calls the owner of the estate, may soon sell off the land as real estate because of low cash flow, high labour and input costs and low reliability of labour.
“All I know is cocoa and I know it very well,” says Moheepath. “Nobody cyah chouponeer (prune) a tree like me. Cocoa was king when I was small, but not again. The Government ent doing nothing to resurrect the king. People selling estates like mad and nobody ent trying to save we bread and butter,” he concluded sadly.
Moheepath’s lament is not unfamiliar to other farmers in the local cocoa industry. His complaint is fact: Trinidad and Tobago’s fine or flavour cocoa was, indeed, king in the early 1900s, with a production of over 30 million kg in 1921 and the status as fifth largest producer of fine or flavour cocoa in the world. In 1992, production plunged to 935, 000 kg, and today a modest 1.25 million kg are produced.
In addressing the downward spiral of domestic cocoa quotas, 1999 Government of Trinidad and Tobago and European Union Rehabilitation of the Cocoa Industry Investment Preparation Study suggested disease problems (blackpod) and pests, lack of education in agriculture and dwindling farming population, exodus of labour away from farms, with industrialization and low-input cultivation methods as the precipitating agents.
If credit be given to the respective authorities, not all of these factors mitigate against the industry today. The University of the West Indies Cocoa Research Unit (UWI CRU), and the Ministry of Agriculture Cocoa Research Unit have addressed the disease problems through research and development of disease-resistant and high-yielding varieties. In fact, the International Genebank for Cocoa, at Centeno in east Trinidad, expertly managed by UWICRU, has won the institution and the country much acclaim in the world cocoa fraternity. Pests are also managed more effectively in the fields, and education is not as low as in past years.
Furthermore, the most significant positive characteristics of the local cocoa industry still prevail: a niche market with a premium price, courtesy the intrinsic flavour of Trinidad and Tobago’s cocoa among the other eight exclusive producers in the world, and the fact that it is a prime ingredient in bourgeoisie dark chocolates. This is the dark chocolate sometimes referred to as “vintage chocolate” (as it compares to fine wine because of its price and exclusivity) demanded by the elite market. (Dark chocolate is made from fine or flavour cocoa which is only produced in eight countries of the world. Some countries produce 100 pre cent fine or flavour cocoa while others produce it partially. In Trinidad and Tobago it is 100 per cent. Not all fine or flavour cocoa has the same flavour as this is unique to the country of origin. The characteristic flavour is derived from a combination of environmental, genetic and climatic factors. Milk chocolate is produced from another category of cocoa called “bulk cocoa”, which is produced in the other cocoa producing countries throughout the world, mainly African countries. Fine or flavour cocoa commands a premium price over bulk cocoa. Trinidad and Tobago Fine or Flavour cocoa is, therefore, a brand in itself.)
Nevertheless, the perennial problem of labour has not been solved, and the ageing population of farmers and low interest by younger people continue to be areas of concern. New problems as the economy proceeds through a recession, health and safety and other negating issues have also cropped up to stunt the growth of the sector.
In the first week of March this year, Trinidad and Tobago was the host for the International Cocoa Organization (ICCO) Second Round Table Meeting (RSCE2)—a follow-up to the first in Ghana in 2007, which I attended as Assistant Manager of Prism Agri Estates. The local leg of this forum for world stakeholders in the industry to brainstorm on ways to develop, maintain and sustain the world cocoa economy boosted the morale of the domestic cocoa community and discussed several key issues affecting the global industry. However, according to Joseph, a cocoa farmer from East Trinidad, no significant feat was accomplished through the RSCE2. He got an opportunity to give his views at a recent meeting for cocoa farmers at the Hyatt: “The Minister of Agriculture came in all his glory, rubbing shoulders with the foreigners. He behaved like if he knew our plight as farmers. But I want to let everybody know that that was just a show. Up to now he has not addressed the real issues of the cocoa-farming population.” Joseph says the farmers want a higher price for their cocoa: “Up to now the price is a measly $18 per kilogram. A kind gentleman at the meeting told us he could give us better prices if we shipped to him but the market to buy and sell is not open to small farmers; the old dusty Act from yesterday binds us to export licenses and quotas.”
He says the Minister did not address issues like the closing of National Agro, the local Government-subsidized supplier of fertilizer to farmers, and the fact that farmers have no local cheap source of fertilizer. “So what real issues did Mr Minister really solve and attempt to address at the RSCE 2 meeting?” Joseph asked, to applause of the other farmers. “After that big meeting I saw all kinds of nice things on the newspapers about cocoa. But at the end of the day I’m still struggling to feed my family on cocoa money.” He said to the meeting: “I send my children to school and after they graduate they leave the estate. Why? During the three years that cocoa trees take to grow and bear, the little money I had coming in was from the banana and plantain inter-cropped between the cocoa. The Government gives subsidies for new fields and rehab of old ones but that money is definitely too small and the wait real long.”
Sammy, an 80-year-old farmer from Moruga, said he had the solution to the labour problem: “Bring back the old people to work so they could teach the young!” But, he added, “Government must still pay us pension, because if we work on estates we can lose this privilege.”
The plight of the small farmer is shared by the large farmer, regardless of the varying economies of scale. Another farmer and member of the Private Shippers’ Association of T&T said, “Very soon there will be no cocoa industry, no farmers and no estates. If this situation is not dealt with, the local economy will loose a gem of a commodity. We, the farmers, understand this, the Government doesn’t have a clue, they don’t seem to be affected.”
At another, more formal, meeting, farmers came up with a plan of action to resuscitate the industry. This meeting was the third for the newly formed group, Cocoa Producers Alliance of Trinidad and Tobago (COPALTT), a by-product of the RSCE2 meeting. COPALTT is a collective voice for all local farmers who feel that “enough is enough”. Alexandra Seale, chairperson of the group, says farmers have to become proactive in order to save their estates: “We have to take matters into our own hands.” The group, she says, serves as the lobbying group, representing farmers of all regions and backgrounds in Trinidad and Tobago. She says the farmers made a declaration in which they articulated priorities for the industry. It addresses the issues of agricultural health and safety, education, estate insurance, industry-friendly legislation, marketing and agro-tourism. The group’s core intends to meet with the Ministry of Agriculture and the Cocoa and Coffee Industry Board (CCIB) very soon, and to continue regular general meetings for farmers.
So will cocoa ever win the battle of decline, and reclaim its royalty? Fitz-Clarence Waldropt, a cocoa farmer and member of the CCIB, believes that the new farmers’ groups and their more vocal approach will indeed revolutionize the industry and turn it in a positive direction. He says he grew up in the field with his father who was the manager of Government-owned cocoa estate, MARPER Farms, so he can agree that cocoa was a big part of the economy. “The reason it fell,” he says, “was because agriculture lost its appeal. No one wants to work in the bush anymore; it’s not glamorous. They prefer a ‘10-days’. I had many other opportunities growing up but I decided to honour my dad’s efforts and return to the field.” Waldropt says he has hope that the country will reach dominance once more in cocoa, “once everyone in the industry does their homework.”
Dr Darin Sukha, research fellow at UWICRU, is also confident that the best is still ahead and the marriage between research, the farming community, Government and other stakeholders is critical to the cocoa dilemma. Meanwhile, Lawrence Duprey, owner of a conglomerate of cocoa estates, Prism Agri Estates Co. Ltd., expressed his amazement that cocoa was not a major national priority like energy. “We in Trinidad and Tobago have a commodity in cocoa that has a phenomenal competitive advantage due to its product differentiation. Nowhere else in the world could you produce Trinidad and Tobago cocoa. You can’t take our seedlings and plant them in another country and derive our indigenous flavour. My question is: why aren’t we developing a commodity of this nature? This should be foremost in our economic strategy!”
The CCIB, in tandem with the Ministry of Agriculture, are the agents who supposedly hold the financial key to the doorway of change, their intervention is crucial for the survival of the industry. Jacqueline Rawlins, chairman of the CCIB, assured that strategic plans addressing all the farmers’ concerns aired in this article have been submitted to the Ministry of Agriculture, and that some initiatives have already begun. But while the Minister of Agriculture was unavailable for interview for this article, the plight of Moheepath, Joseph, Sammy and the rest of the cocoa die-hards still resonates in the rural distance. And, day by day, estates continue to be sold to real estate tycoons. Will the sweet crown of cocoa ever be salvaged? “Yes it will,” insists COPALTT activist Alexandra Seale, who is adamant that things will change, once she has something to do with it.

The Myth And The Magic Of The IMF
By JOHN MAXWELL

I reluctantly must confess that I have never heard of any success story associated with the International Monetary Fund (IMF) in relation to its dealings with any poor or Third World country.
Certainly, in its dealings with Jamaica, the record is one of unrelieved disaster after disaster with both political parties fleeing in impoverished terror from the helpful arms of the Fund.
I will never forget the spectacle of Mr Albertelli, the Argentinean principal of the 1977 IMF team, as he scuttled away to hide from journalists in the then Sheraton hotel after delivering the coup de grace to Jamaica’s hopes for rational development. It was therefore with some surprise that I read in the Gleaner a story suggesting that the Michael Manley government had more or less willingly surrendered its sovereignty to the IMF in 1977.
According to Gary Spaulding, Senior Gleaner Writer: “There was no global economic crisis 32 years ago to shoulder the blame for Jamaica’s economic predicament, but on Tuesday, January 19, 1977, when Prime Minister Michael Manley told the House of Representatives of his administration’s intention to pursue a borrowing relationship with the International Monetary Fund (IMF), his rhetoric closely matched that of the present government.”
Oddly enough, I remember not one, but several international crises that provided a background for the Manley recourse to the IMF. These included the so-called Arab Oil Shock of 1973 et seq because of which - according to the most easily accessible source - Wikipedia: “A world financial system already under pressure from the breakdown of the Bretton Woods agreement experienced a series of recessions and high inflation that persisted until the early 1980s, and elevated oil prices until 1986.”
Among the crises I remember was the devaluation of the US dollar, the quadrupling (or worse) of the price of gasoline, and to quote Wikipedia again:
“Underscoring the interdependence of the world societies and economies, oil-importing nations in the non-communist industrial world saw sudden inflation and economic recession. In the industrialised countries, especially the United States, the crisis was for the most part borne by the unemployed, the marginalised social groups, certain categories of ageing workers, and increasingly, by younger workers. Schools and offices in the US often closed down to save on heating oil; and factories cut production and laid off workers. In France, the oil crisis spelt the end of the Trente Glorieuses, 30 years of very high economic growth, and announced the ensuing decades of permanent unemployment.”
If the effect of these crises on the developed countries was so profound and long-lasting it should not take a genius to understand the effect on totally open economies like Jamaica, totally dependent on imported oil and overwhelmingly dependent on imported food.
Put briefly, the IMF thought our aspirations were too ambitious and decided to put us in our proper place. I believe that this judgement was both racist and political, made by a bunch of ‘crazy baldheads’ of the same ilk as are now persecuting Haiti. You can see their point: We had a National Minimum Wage while the English and Americans were still talking about one, we had free education from basic school to university, we had ambitious unemployment relief schemes - the Emergency Employment Programme and the Pioneer Corps, among others, we had decreed maternity leave for every woman worker in the country, including domestic helpers and sugar workers. For the First Time At Last!
There was also serious intrigue. Jamaica had prepared a negotiating position with the IMF - a top secret document. Imagine the delight of the IMF and the total discomfiture of the Government when this ‘Top Secret’ document was broadcast on RJR by the leader of the Opposition, Mr Edward Seaga.
It was a blow from which this country has never recovered. A minister and a permanent secretary were initially found guilty of breaching their trust. They were later acquitted on appeal.
I have never understood why Mr Seaga, a former cabinet minister and bound by the same oaths and undertakings as those in office, was never prosecuted for his breach of trust. He was, however, later excoriated by the prime minister of Trinidad and Tobago, Eric Williams, for his disloyalty to Jamaica when he went to the IMF and World Bank, arguing that they should not help Jamaica. As it was, and as Seaga discovered for himself while prime minister, the IMF and its sibling were never about helping Jamaica; and when Mr Seaga had the opportunity in the ’80s, he ran away from them as fast as his little legs could carry him.
I wonder what my friend Clovis would do now if the current leader of the Opposition were to behave now as Mr Seaga did then?
Brutal and Procrustean
What I called “the brutal and Procrustean strictures of the World Bank and the IMF forced us to cut taxes and public services, to raise interest rates to farmers and, in fact, to turn us back, back to desperation.
In 1998 the then head honcho of the World Bank, one Wolfensohn, lied like a trooper to more than a thousand Anglican bishops at the Lambeth conference, saying that he had given US$200 million to Jamaica to ease poverty. He had not. But Argentina, with a preponderantly European population, and considerably richer than Jamaica, got $200 million for poverty alleviation. The World Bank gave them the money to do some of the things the IMF suggested amounted to criminal mismanagement when we did them in Jamaica.
In other words, Michael Manley’s Emergency Employment Programme - the Crash Programme - and the Pioneer Corps became living realities in Argentina thanks to the World Bank but were a wicked misuse of money in Jamaica.
What we should be looking for in these times of trial and tribulation is not an IMF recipe which basically calls for cutting expenditure, chopping jobs and going even further into recession.
In my opinion, the most significant statistic of all the dread figures bandied about is the precipitous drop in remittances from Jamaicans abroad. Remittances account for 17 per cent of Jamaica’s GDP, which means that one in every six dollars worth of Jamaica’s output or, more crudely, one in every six dollars spent in Jamaica comes courtesy of Jamaicans abroad.
Since, remittances have dropped by 17 per cent in the first six months of this year and may drop even further. This money goes mainly to people at the bottom of the society so it is my guess that for the people, the drop in remittances represents much more than a 20 per cent cut in their living standards - it may represent twice as much.
What we need now
This should tell us where the development aid should go. I once said to Michael Manley that it might make more sense if our foreign aid were simply distributed in cash and benefits to the poor rather than being spent on planning and Pajeros.
According to the newspapers, Badrul Haque, special World Bank representative, is looking for a plausible explanation as to why one-third of Jamaica’s potential workers remained outside the labour force.
The answer is in monoculture - sugar cane - our shopkeeper culture and the effects of our openness to IMF solutions. The IMF’s answer to everything is for us to become more competitive, which means that we need to reduce the take-home pay of our workers until they can compete with the near slave labour of Bangladesh, Indonesia and other south-east Asian labour forces.
Earlier this year, in April, Robert Zoellick, president of the World Bank, predicted that the present global crisis could become an economic disaster for poorer countries with millions being driven into unemployment. “Poor people could suffer the most and we must act in time to prevent a human catastrophe.”
I believe that the Emergency Production Plan of the 1970s - produced by the people themselves - was a superior option to the private sector-driven retreat to the IMF. Both involved hardship, but the Jamaican self-reliance plan would have had the effect of building social capital, encouraging co-operation and cementing communities while producing small-scale enterprises, especially in the production and marketing of food.
Today, we are offered alternatives; the alternatives offered to poor people whenever they are in problems - sell your capital assets and further impoverish yourselves, borrow large amounts of foreign exchange for building facilities for foreigners. We will be building a gigantic public sanitary convenience for Royal Caribbean cruise lines by destroying Falmouth, capturing Up Park Camp to build another deadly ghetto in the middle of Kingston while ignoring the desperation in the slums of Kingston, Spanish Town, Ocho Rios, Montego Bay and Negril - concrete time bombs which, one day, who knows when, will explode with devastating consequences for the rich, the poor and everybody in between.
Let’s give the Trelawny Multi-purpose Stadium to UTech to produce thousands of Masters of Business Administration who will end up on the streets here or abroad while the food they could be growing is imported from abroad, produced by ‘farmers’ who fly planes to work. Let’s take away the beaches and the playing fields from the poor because they won’t know how to use them, and instead of producing more Bob Marleys and Usain Bolts they will be producing more Sandokhans and Jim Browns.
We have a choice. We have always had a choice and we almost always make the same mistake.

jankunnu@gmail.com 
(Courtesy the Jamaica Observer  of Sunday, July 26, 2009)

Barbados

Dr Marion Williams, Governor of the Central Bank of Barbados,

• The Barbados economy officially entered recession following a 3% contraction in the first half of the year due mainly to a sharp reduction in tourist arrivals and manufacturing. The Central Bank Governor Marion Williams, however, insisted that there was no crisis, since the country still has Bds$1.3 billion (US$650m) in foreign reserves which should provide adequate cover for imports. Unemployment is expected to rise while inflation should decline to between 3 and 4 %.

• Barbadians got notice of a 60 per cent increase in water rates.

• For the second consecutive year, FirstCaribbean International Bank won the award for Best Bank in Barbados in the Euromoney Awards for Excellence 2009,  hosted by Euromoney magazine.

• Barbados signed a 10.13 million Euros (BDS$28 million) financing agreement with the European Union to assist with the modernisation of its International Business and Financial Services Sector.

Jamaica

• The Government of Jamaica has applied for a US$1.2 billion Stand-by Agreement with the International Monetary Fund in response to its deteriorating balance of payments. The decision has the backing of the Private Sector Organisation of Jamaica (PSOJ).
Remittances to Jamaica fell by 17 per cent in the first six months of 2009. The World Bank predicted a 7.3 per cent decline in transfers to the Caribbean and other developing countries in 2009.

• The National Commercial Bank Jamaica Limited (NCB) posted net profits of $7.3 billion for its nine-month ended June 2009. This was a nine per cent year over year increase.

• The supply of LNG to Jamaica from Trinidad  and Tobago is back on the front burner after T&T says it can rekindle serious talks following last week’s discussions with Caracas on the exploitation of a new and rich natural gas field in the seabetween Trinidad and Venezuela.

Trinidad and Tobago

• Recession re-entered T&T’s vocabulary after the Central Bank reported a second successive quarter of negative growth  with a decline of 3.3% in the first quarter of 2009 following the 1.1% decline in the final quarter of 2008. Inflation continued to fall, moving into single digits at 8.4%, down from  10.30% in May.

• For the first half of the year, Trinidad’s two ports reported declines in volumes in excess of 30 per cent. Blame is being cast on the global recession and its effect on international and regional trade.

• A group of minority shareholders of defunct national airline BWIA rejected the Government’s offer of 20 cents per share, saying they had paid between $4 and $6-plus per share. Meanwhile, BWIA’s successor, Caribbean Airlines, is back on the hunt for a CEO after the incumbent, Phillip Saunders announced his decision to resign after two years in the saddle.

• The Unit Trust Corporation announced a total payout of $116.9 million to investors in its

 
Growth and Income Fund  who received 45 cents per unit.

• Local investors with common shares in the Royal Bank of Canada (RBC) received a quarterly dividend of US50 cents per share, payable on August 24.

• RBTT Bank reduced its prime lending rate from 12.5 per cent to 12 per cent. State-owned First Citizens also cut its prime lending rate to 11.75 per cent.

• Petrotrin’s president, Kenneth Allum disclosed that the company had posted an after-tax loss of $600 million between October 2008 and May 2009.

• Energy Minister Conrad Enill said Trinidad and Tobago lost US$185 million (TT$700 million) in energy sector investment planned over a four-year period. This after three international companies decided not to follow through with proposals due to the global economic downturn.

• T&T signed production sharing contracts with Canada-based Voyager Exploration (Trinidad) Ltd and Centrica Energy, for the exploration of Guayaguayare Shallow and Deep Horizon fields.

• Flow announced a $1 million sponsorship deal with local television station, Gayelle, the Channel.

• Testimony presented to the parliament committee revealed that as at October 2008, the Trinidad and Tobago Electricity Commission (TTEC) had more than $1 billion in outstanding debt to creditors.

• One Caribbean Media Ltd recorded a profit before tax of $34.8 million for its financial half-year ended June 30, 2009. This was 34 per cent less than the $53 million posted in the same period in 2008.

• NP chief executive officer Richard Callender said National Petroleum is expected to spend an estimated $48 million this year to upgrade the company’s service stations across the country.

• Minister of Tourism Joseph Ross pledged $20.7 million in grants to help upgrade small hotels and guest-houses.

Haiti

• Roughly two-thirds of Haiti’s total debt was cancelled when the World Bank, the International Monetary Fund and the Inter-American Development Bank announced the forgiving of US$1.2 billion of debt. Canada also forgave C$2.3 million in debt owed by Haiti.

• The Barbados-based Caribbean Development Bank (CDB) approved a programme that outlined its assistance strategy for Haiti for the period 2009-2012. The four-year “Country Strategy” programme involved an assessment of the development challenges confronting Haiti, as well as the government’s development agenda in response to those challenges.

Cuba

• Dutch giant Phillips was fined $128,750 by the US Office of Foreign Assets Control  (OFAC) for selling medical equipment to Cuba.

• Cuban workers got official permission to hold more than one government job. 

Other Regional
• The World Bank approved Guyana’s readiness plan (R-Plan).

• IMF Executive Board approved a disbursement in the amount of US $5.1 million to the Government of Dominica for assistance under its Rapid-Access Component of the Exogenous Shocks Facility (ESF). Several other Caricom countries have also accessed ESF funds this year, including St Lucia, St Vincent and the Grenadines, and St Kitts and Nevis.

• Investors from four countries sued Antigua and Barbuda, alleging in court filings that the twin-island nation had  benefited from the operations of financier Allen Stanford. The Texan is currently in jail on charges involving $7 billion in fraud.

• “World’s Best Awards” August issue of Travel + Leisure Magazine named Jade Mountain in St Lucia as the number one resort in the Caribbean.

Continuing uncertainty is the only certainty

By GREGORY McGUIRE

Even in the best of the times, the task of economic management is never easy. During a recession, it can become a nightmare. Just ask Barack Obama.
In a resource-based economy like T&T, this task is filled with perils—both economic and political. The risks associated with management of the economy, however, can be mitigated by winning the confidence of people, through true open dialogue and consistent policy positions, among other things.  In this context, the Prime Minister’s description of the current economic crisis as a “blip” may well be an unfortunate error.  Was the Prime Minister caught up in the euphoria of his Summit’s “success”  or  did he feel obliged to give some good news to the business sector who had gathered for breakfast ?
Whatever the motivation—and sometimes it is difficult to find a motive for political action-there are consequent dangers in Mr Manning’s statement. One is that an earlier request for tripartite discussions has been rendered impractical if not downright impossible. Neither labour nor business will regard any such initiative as serious.  We can now expect to see unions, particularly public sector unions, harden positions across the negotiating table. And who can blame them?  The second and perhaps more significant consequence is really the fiscal stance foreshadowed by the Prime Minister’s address.   The mere hint of recovery seems to have given the Government renewed confidence to press ahead with its expansionist fiscal stance, even at the expense of undermining gains made on inflation.  So how did we come to this juncture?
In an address to the nation just six months ago, the Prime Minister pronounced  that “we are therefore faced with an economic slowdown in many industrialised nations, with most either already in recession or heading there. It all points to a global economic slump which, in the view of experts, could be deep and prolonged”.  He continued “… No country can escape the effects of a global recession…..All countries would be wise to take appropriate action”.  On the impact of the crisis on the T&T economy, the Prime Minister noted the collapse of all export commodity prices which, he estimated, “will lead to a Budget shortfall of six billion dollars”.  “Things could get more challenging”, he warned “…it is clearly a very serious situation requiring immediate action.” The Prime Minister advised that the situation had led his Government to “… a reordering of our developmental priorities and deferral of some of the projects we consider essential to the realization of developed country status.”  The Prime Minster appealed for “restraint at all levels since this is a period when we must tighten our belts”
So the question is: What could have happened in the world over the last six months to cause this dramatic reversal in the Prime Minister’s perspective? If anything, developments in both the international and domestic economy since then have confirmed the prognosis of a global recession. The latest IMF and World Bank forecasts are even more pessimistic than they were three months earlier. In April, the IMF projected a 1.3% decline in global economic activity for 2009, down sharply from the 0.5% growth projected by the Fund in January.  The Fund predicts only a slow recovery in 2010. The World Bank concurs that this year’s decline in world output would be the first since World War II.
Here at home, the Central Bank provided a reality check to the extent that the data allowed it to do so.  Further anecdotal evidence supports the view that the economy may well be in recession as we speak.  Consider the following developments in the key sectors of the economy:
Crude Oil production is now running at about 114 thousand barrels per day, 3% below 2008 but, significantly, 26% lower than in first quarter 2006.
Gas production and consumption remain flat. Only one new Petrochemical plant has been opened in the last three years and only one is under construction in 2009. Apart from Alutrint, several other planned investments are stalled because of financing challenges.
Petrochemical and steel experienced cuts in production in late 2008 with steel remaining at below normal levels.
Private sector investment has slowed all around as investors adopt a wait and see attitude.
Government has scaled back its home construction programme.
CL Financial’s collapse has created major dislocation in the financial system thereby further undermining consumer confidence in financial services.
Manufacturing sales and output are down primarily because of the difficult circumstances facing the rest of Caricom – the primary market for T&T manufactured goods.
Notwithstanding the Summit of the Americas, hotel occupancy rates, particularly in Tobago, are at record low levels.
Nothing in the above gives reason to cheer.  So is it, then, the recent uptick in oil prices that has influenced the Prime Minister’s optimism that recovery is around the corner?  If so, then is it not premature? While oil prices have topped US$ 60/bbl in recent weeks, the oil market is far from settled. Both the International Energy Agency and the US Energy Information Administration expect oil demand to fall in 2009.  In the absence of any demand increase, then, the current price run up seems to be due mainly to speculative buying on the part of traders seeking to cash in on lower prices.  The result has been a build-up of inventories in the major consuming nations.
US commercial stocks are at the highest level in ten years, while Europe is running 30 million barrels above last year.  OPEC discipline seems to be the key to market stability and a strengthening of prices in the short to medium term.  There are signs that the cartel’s exemplary solidarity, evident since July 2008, is beginning to wane as some cash-strapped members wilt under the fiscal strain.  Not surprisingly, those worst affected—including Venezuela and Iran—have been exceeding their quotas.   It is worth recalling that continuous quota violations and the consequent decision of Saudi Arabia to abandon the swing producer role helped to accelerate the price collapse in 1985-6.
But whatever happens in the oil market, it is natural gas prices that have greater impact on government energy sector revenues. Natural gas prices in the US fell sharply over the last six months to US$3.25 in April- the lowest level in seven years.  Cargo diversion to higher priced markets has mitigated, somewhat, the impact of falling US prices. However, the prognosis is that gas prices are likely to remain soft in the short to medium term on account of large increases in LNG supplies.   A recent BP study anticipates unprecedented growth in LNG capacity and trade over the period 2009-11 with the biggest largest increment, some 6 billion cubic feet /day, coming in 2010.  For both oil and gas, therefore, continuing uncertainty is the only certainty.  It is futile therefore, for Trinidad and Tobago to bank on a price revival in these markets.
Economic management must proceed on the assumption that prices will remain at long term average levels.  In terms of fiscal policy, this implies reversion to a lower level of Government expenditure, with greater emphasis on saving unplanned surpluses. The Government should now subject itself to fiscal rules that provide guidelines for the management of hydrocarbon wealth in a context of price volatility.  The required adjustments should not be too difficult to accomplish, beginning with a rescheduling and reprioritisation of the capital expenditure programme.
Elements of recurrent expenditure must also be redirected.   It would be highly desirable for Government to place priority on those areas of basic needs that seem to be crying out for help.
How long are farmers to continue enduring the problems of poor access roads and praedial larceny, or policemen the discomfort of dilapidated stations? Does it make sense to build ultra-modern early childhood education centres while primary schools, sometimes within the same district, are being shut down because of unsafe conditions?   Why does the HDC continue to build new housing settlements without recreational or community facilities? The list of these obvious contradictions in policy and actions of the Government could go on and on.
Unfortunately, the Prime Minister’s recent utterances on the current circumstances and his prognosis of an early recovery suggest that there would be no alteration in Government’s fiscal behaviour.  Unlike several countries in the region and across the world, they have not seen wisdom in using this crisis as an opportunity to engage the population in meaningful dialogue.  Instead, citizens of the Republic are invited to have blind faith that “this too shall pass”.   This Government may well become an object of the old adage: “who cyan hear go feel”.

By REAY GREAVES

ANTIGUA & BARBUDA

• Antigua’s Senate voted to seize R Allen Stanford’s property, setting up a possible showdown with a court-appointed receiver who was to secure the billionaire’s assets for investors in his allegedly fraudulent offshore bank scheme.  The measure was passed one day after the lower house of Parliament also voted to confiscate about 250 acres, including businesses that formed the basis of Stanford’s empire in Antigua and Barbuda.  Antiguan officials said they hoped to keep the businesses in operation and prevent the receiver from using the assets to pay investors in the Antigua-based Stanford International Bank Ltd.

•Prime Ministers Baldwin Spencer of Antigua & Barbuda and Dr. Ralph Gonsalves of St. Vincent and the Grenadines attempted to reassure the public of the soundness of Bank of Antigua Ltd (BOA) by opening, and reactivating personal chequing accounts at the bank. Dr. Gonsalves said the move was organised by PM Spencer and himself to show that members of the public could safely renew their confidence in the bank. 

BARBADOS
 
• In the face of mounting opposition criticism, Barbados Prime Minister David Thompson went on television to inform the nation that CLICO had fallen short - by several million dollars—in 2005, 2006, and 2007 in its commitment to the government’s Statutory Fund.  He outlined details of the increased deficit from 2004 right up in 2007, saying it was a situation of continued negligence for which his government could not be held responsible.

•Butterfield Bank (Barbados) Limited reported record profits on its 2008 operations. The financial statements for last year show Butterfield earning net profits of Bds$5.2 million, up by Bds$3.9 million, or 316 per cent, over 2007.

•Survey figures coming out of the National Productivity Council (NPC) showed that the level of productivity in Barbados’ manufacturing sector was in decline. According to the survey, between 2004 and 2007, the percentage change in output from the sector went from a positive of 14.4 per cent to a negative of 2 per cent.

CUBA

• Cuba and the Bahamas signed an Agreement for Bilateral Co-operation in Nassau. The accord is aimed at promoting trade and investments, technical information exchanges and joint co-operation programmes. 

•Cuba agreed to restore diplomatic relations with Costa Rica. In a statement sent by Cuba’s foreign ministry, the ministry said the Cuban government’s decision is “consistent” with its “mission of integration and unity” with the people of Latin America and the Caribbean. Relations between Cuba and Costa Rica were cut off in 1961, shortly after the Cuban Revolution.

GUYANA

• Guyana’s President Bharrat Jagdeo went public to report that Bahamas Prime Minister Hubert Ingraham had told him that there seemed to be no record in the Bahamas of Guyana having invested 53 per cent of CLICO (Guyana) assets in the Bahamas operations. However, Jagdeo said that it was the duty of the Bahamas regulators to find the money and that failure to do would result in massive fraud with those accountable facing the courts. Guyana’s Finance minister later said that he sent Prime Minister Ingraham numerous documents supporting the claim that CLICO Guyana is owed more than $35m from CLICO Bahamas.

•By late March CLICO Guyana Ltd announced plans to lay off 35 workers as the government moved to liquidate the company to recover money for insurance policyholders and pension fund contributors. Some 23 per cent of staff at CLICO Guyana are to be released in a cost-cutting move.

•President Jagdeo called for a freeze on the Cariforum/EU Economic Partnership Agreement (EPA) in light of the global economic crisis. He made the plea at a gathering of ACP Group of States and European Union (EU) parliamentarians .He said Caricom countries needed time to source funds to diversify their economies.

JAMAICA

•Standard & Poor’s Ratings Services lowered Jamaica’s long-term foreign and local currency sovereign credit ratings on Jamaica to ‘B-’ from ‘B’, one notch down in the rating scale. The short term debt was also lowered from ‘B’ to ‘C’. However the negative outlook remained unchanged. The downgrade reflects Standard & Poor’s heightened concerns about the deteriorating economic situation and its increasing spillover into Jamaica’s fiscal and external accounts.

•Prime Minister Bruce Golding announced that Jamaica had secured commitments for almost US$1 billion from multilateral sources through to the end of March. This as his country sought to maximise the flow of foreign exchange despite the downturn in foreign currency earnings caused by the global financial crisis.

•According to a statement by the Bank of Jamaica (BOJ), the Net International Reserves (NIR) dipped 9.2 per cent to US$1.6 billion in one month, the biggest dip in five months. The NIR - seen as the country’s last resort in defending the dollar - dipped by US$163 million in the month ending February mainly because foreign assets declined by US$138 million.

•The Jamaican Government again placed on the auction block, the old cotton and polyester mill in Old Harbour, St Catherine. The Development Bank of Jamaica, which holds the asset, advertised the land, with the 212,280 square feet of buildings, for sale, inviting bids that will close on April 17.

•Alumina Partners of Jamaica (ALPART), the island’s leading bauxite plant, announced that it would be suspending all operations in Jamaica for at least one year, effective May 15.  Approximately 900 permanent employees were told by letter that their jobs would be made redundant. ALPART said the company’s alumina product had experienced a drastic 60 per cent price reversal since July 2008.
  
TRINIDAD & TOBAGO

•The US company that sold 6,000 acres of land in Florida to British American Insurance Company (BAIC), sued BAIC, a subsidiary of the beleaguered CL Financial group, with the hope of recovering US$38.2 million.  The Trinidad Guardian reported that Green Island Holdings lent British American US$56.5 million to purchase the  land, described as rural which was bought by British American for US$300 million in January 2008 with US$250 million of borrowed money.

•Close to 700 insurance agents employed by the Colonial Life Insurance Company (Trinidad) Ltd (Clico) were told not to sell any new policies until a new business model is formulated and rates have been revised.

•Trinidad Cement Ltd. recorded an eight per cent increase in revenue in 2008 over 2007at a reduced level of profit after tax of $156 million compared to $211 million the previous year.   Group CEO, Rollin Bertrand, attributed the decline largely to a net loss recorded by the group’s Barbados subsidiary, Arawak Cement Company Limited (ACCL). In his director’s statement, Rollin said the outlook for 2009 remains optimistic with strategies designed to improve capacity and increase regional market share.

•Prestige Holdings, parent company of KFC, TGI Friday’s and Long John Silver’s restaurants announced that it would not be paying dividends for the financial year 2008 but plans to resume distributions in 2009. Among the reasons cited were:  substantial  food cost inflation, labour shortages and high absenteeism. Another contributing factor was the cost incurred in leaving the Puerto Rico market where Prestige operated three TGI Friday’s restaurants.

•The National Gas Company announced the appointment of energy sector veteran Andrew McIntosh as its new president to replace outgoing president Frank Look Kin. McIntosh who has more than 31 years experience in the energy sector took up the appointment on March 9.

•In response to public anxiety, Minister in the Ministry of Finance, Mariano Browne  said the government had no plan to devalue the T&T dollar. Responding  to complaints about  a shortage of US dollars, Browne said there was an “ample supply” of foreign exchange holdings to meet demand. Central Bank Governor Ewart Williams backed up the position saying the Central Bank “stands ready to meet all foreign exchange demands from its gross reserves which now stand at around US$9 billion, the equivalent of 11 months imports.” 

•Good news from the Trinidad and Tobago Unit Trust Corporation which announced a total income of $1,439,083,000 for its 2008 financial year. This marked an increase of an estimated $3,259,110 over 2007. After subtracting expenses, finance charges, taxes and its minority interest, net income was $130,840,000.

ALSO NOTEWORTHY

•The Caribbean Tourism Organization (CTO) postponed its annual Caribbean Conference on Sustainable Tourism Development saying that the current global situation made it difficult for countries and delegates to give their full attention to the conference.

•Digicel Limited completed a US$335-million corporate bond offering, the proceeds of which is expected to acquire a 35.8 per cent stake in Digicel Holdings (Central America) Limited [DHCAL] and provide funding for general corporate purposes.

•Belize became the twelfth CARICOM member state to introduce the CARICOM passport during a ceremony held at its capital, Belmopan. The first CARICOM passport was issued on January 7, 2005.

•Japan and Venezuela agreed to a comprehensive energy co-operation pact, paving the way for Japanese enterprises such as Inpex Corporation to tap oil reserves in the Orinoco Delta area. Venezuela plans to invest $79 billion in the Orinoco Delta region to develop some of an estimated 316 billion barrels of reserves.

•The International Center for Settlement of Investment Disputes (ICSID), ruled in favour of Grenada, in the island’s dispute with an American company that claimed it was refused an oil and natural gas exploration licence because it refused to give a bribe to a former Minister. The ruling cleared the way for Grenada to take full advantage of its maritime resources, once the maritime boundary negotiations with Trinidad and Tobago are concluded.

By NORMAN GIRVAN

I must confess to being conflicted by the news that Schengen visa requirements are soon to be lifted for four Caricom countries (http://www.caribbeannetnews.com/news-14249–35-35–.html). 
Like many others who have had to apply for a Shengen visa for even the shortest of visits, I find the procedures onerous, intrusive and demeaning. So I cannot but be happy for those citizens of Antigua and Barbuda, the Bahamas, Barbados and St. Kitts and Nevis who will henceforth not be required to endure them if they wish to travel to Schengen zone countries. 
One the other hand, I wonder whether the measure is not a further step towards the establishment of first and second class citizens, and even of first and second class countries, within Caricom. There is a sense in which such a situation already exists de jure with respect to Haiti (whose citiizens are required to have visas to visit many other Caricom states) and de facto with respect to Guyanese, who are regularly hassled when attempting to exercise their Treaty rights to travel freely within the region.
Notably, the four visa exemption countries are among the smallest and the richest members of Caricom. Their combined population of just over 750,000 is only 5 percent of Caricom’s total population (and about 0.15 percent that of the EU). And their average per capita income is three and half times the Caricom average ( $14,700 compared to $4,220, Purchasing Power Parity 2000 dollars). This puts the four well ahead of the EU’s poorest members-countries like Lithuania, Latvia, Bulgaria and Romania.
Poverty and unemployment in the four are also low-they are all probably net importers of labour. Clearly, there is no risk of the EU being ‘flooded’ by job-seekers from these islands.
In return, the four countries have lifted visa requirements for nationals of all EU states, including several of the EU’s newer members that are former Soviet bloc countries. The European Commission can now boast to these newer members that it has put them on a ‘level visa playing field’ with the older members. Good bonus, little onus.
The problem, of course,  is that this makes the playing field even more unbalanced for other Caricom countries. Ironically, by granting the exemption to a select few within Caricom, the EU is introducing the very kind of distinction within Caricom that it’s seeking to abolish within the EU itself.
Consider the following (hypothetical) example. Mrs. Brown, a lawyer from Dominica, has been living and working legally in Antigua for several years. She may have a work permit, or a Caricom Skills Certificate, or she may a legal resident-it doesn’t really matter.
Mrs Brown plans to take a vacation in the UK and, while there, hopes to take a side trip to Paris. To do so, she will have to obtain a Schengen visa. She will have to answer questions that ‘prove’ that she has a secure and well-paying job in Antigua, when she plans to arrive in France, by what means and in what port of entry, when she will leave, provide documentary evidence of her means of support while in France,  the name and address of her host or host company in Paris,  etc., etc.  (See visa application form at http://www.diplomatie.gouv.fr/fr/IMG/pdf/visagb.pdf).

On top of that, she will be required to take out medical insurance to cover the duration of her stay-even if it’s only for a weekend.
However, all this will not apply to Mr. Jones, the Antiguan taxi driver who takes Mrs Brown to the airport. Mr Jones will be able to simply buy a ticket and spend up to three months legally in France without anybody asking him any questions.
As there are thousands of Caricom citizens living and working legally in Antigua and Barbuda, the Bahamas, Barbados, and St Kitts and Nevis,  this scenario can be multiplied several times and in countless variations and permutations (for example, where Mrs Brown is married to an Antiguan, and her children are Antiguan, etc.).  And of course, it applies en masse to the eleven other Cariforum countries which are not so favoured.  
From the point of view of EU immigration regulations, therefore, we can see the emergence of first class and second class Caricom/Cariforum citizens-and first class and second class Caricom/Cariforum countries.
If the UK joins the Schengen zone-as it is reported to be considering-the distinction will become even more real to the ordinary citizens of Caricom. The majority will be required to secure Schengen visas to visit the UK. A privileged few will not.
There is another side to this. When the pros and cons of the EPA were being debated last year, some of us pointed out that the right of Cariforum countries to export services to the EU-an alleged benefit of the Agreement-was significantly qualified by the visa and immigration restrictions that would still be maintained by EU member states.
Lifting of visa requirements for some countries will place their service providers at a distinct advantage vis-a-vis those from the eleven other  Cariforum states.
They will be able to make casual visits and to scout out opportunities for landing contracts to sell their services under the terms  of the EPA, without the hassle of getting a visa beforehand .
There will still be other barriers to be overcome-  like certification requirements, mutual recognition arrangements and the possibility of economic needs tests being applied by destination countries. Nonetheless, they will have a ‘foot in the door’.
The visa exemption agreement, in other words, strengthens the likelihood of establishing first class and second class ‘country beneficiaries’ as a result of the operation of the EPA.
Could this be a reason why some Caricom countries, with an interest in the export of services to the EU, were much more enthusiastic about signing the EPA than others? At the time that the EPA was being debated, the visa exemption negotiations were well advanced.
The EU, of course, will argue that it cannot afford to allow free travel access to the whole of Caricom/Cariforum, because of the wide differences in living standards between the two regions and the possibility of illegal stay-overs.
There is a glaring double standard, however, in the fact that the EPA will force the countries of the region to open the majority of their markets to imports of European goods, and to allow in employees of European firms, while Europe continues to maintain tight restrictions on the inflow of Caribbean labour and casual Caribbean visitors.
One may also ask why, after centuries of colonial rule, and of European investment in, and trade with, the Caribbean, wealth is so heavily concentrated on one side and poverty on the other.
Europe, I suppose, bears no responsibility for this state of affairs.
The EU will also point out that within Caricom/Cariforum, visa restrictions are maintained against Haitians and that the Bahamas is not a member of the CSME because it does not wish to subscribe to the free movement obligations.
True enough. And the discrimination that Haitians, Guyanese and other Caricom nationals suffer in other Caricom states should be energetically condemned and opposed wherever it raises its ugly head.
At the same time, there is world of difference between the absorptive capacity of a country of less than 300,000 people and that of a continent of 500 million.
At any rate, the claim of Vice-President Jacques Barrot, European Commissioner responsible for Justice, Liberty and Security,  that the agreement shows that Europe is sometimes unfairly called ‘Fortress Europe’, hardly seems to stand up to scrutiny.
Far from breaching the walls of Fortress Europe, the visa exemptions merely extend the perimeter of the fortress by a few centimetres to facilitate tourism. Limited access has been provided to six small, relatively prosperous island states with a combined population that is 0.6 percent of the EU total. (Mauritius, population 1.3 million  and the Seychelles, population 82,000, are also in the agreement.)
The barriers against the rest have, accordingly, been underlined.
In the evolving system of ‘Global Economic Apartheid’ (the term is Fidel Castro’s) the Schengen visa and their British, US, and Canadian versions have become the equivalent of the infamous ‘Pass’ that black South Africans were required to have in their possession when traveling to whites-only areas.
“Don’t leave home without it, kaffir, or you will be in big trouble”.
It was Bob Marley who longed for the time when “there are no longer first class and second class citizens of any nation”.  He could have been talking about the world community.
Until that day, Marley predicted, there will be “war”.

There is some validity in connecting the events taking place in the international financial markets with the unfolding events in T&T with respect to the CL Financial Group and the intervention of Central Bank. This piece is an attempt to put them into a framework for the purpose of analysis, giving context to the events as they’ve unfolded.
 
 TWO CRISES
 

Cyril Duprey

It started out as a “meltdown” in the subprime mortgage market. Essentially, the US housing boom which began in the late 1990s, began to falter by the middle of 2005. The government had no mechanism in place to head off the slump. However, the big firms on Wall Street found an avenue to profit from it. They created private offerings worth trillions of dollars by “securitizing” these subprime mortgage loans and Adjustable Rate Mortgages (ARMs), christening them Collateralised Debt Obligations or CDOs with no government regulator whatsoever scrutinising them.
CDOs became the hottest thing since sliced bread and they were gobbled up by unsuspecting investors as well as banking institutions all over the world. Not only did no government agency or official try to stop these “deals” as they were selling, but Washington cheered this new market because it expanded home ownership…at least until the defaults started piling up. Some firms were selling as much as US$30 billion worth of CDOs in a single month! But as the toxic chain began to take form, cracks appeared that soon became gaping holes despite their AAA ratings from S&P and Moodys. It is the collapse of the CDO market that has triggered everything that has transpired in the international financial markets up to today.
 When the high level of default rates threw the CDO market into disarray, problems began to surface in the credit markets sparking off a financial crisis. However, given the “contagion” effect that’s now inevitable in our “globalised” financial markets, a full blown economic crisis ensued. The result is that the US is forecasting negative GDP growth between -0.5% and -1.3% for this year. Japan is experiencing its worst downturn in 35 years. The UK, its worst in 30 years and Germany, its worst in 20 years. There is a complete collapse in global demand; whether in manufacturing, construction, financial services or retail. The mere fact that a financial crisis and an economic crisis are both running rampant concurrently suggests that we are indeed witnessing the first Great Depression of this new century.

 THE CLF MODEL
 
Over 50 years ago, Cyril Duprey founded Colonial Life Insurance Company (CLICO). It is rumoured that Dr. Williams suggested to him that he change the name after the country attained independence and he stubbornly refused. His nephew, Lawrence, took over the reins at a time when CLICO was writing insurance and managing a few pension plans with funds under management standing at a few hundred million TT dollars. Lawrence Duprey has transformed this “little” company into a conglomerate with over 200,000 depositors and policyholders operating in more than 30 countries, employing over 10,000 people, writing insurance business and holding investments in real estate, spirits, methanol, ammonia,  banking, non-banking and brokerage operations valued in excess of TT$100 billion. How did he do it?
Duprey took over at CLICO during the Reagan/Thatcher era of dominance, a part of which was overseen by the not-so-watchful eyes of the maestro, Alan Greenspan. The prevailing buzzwords were “liberalisation” and “globalisation” while fiscal and monetary policy combined on the premise that unlimited prosperity can be created by the unlimited expansion of credit with a little guidance from Adam Smith’s “invisible” hand. Duprey grasped both the mood and the machinations of the times by travelling extensively and observing the ways of the world. He probably has more “flying” hours than most seasoned pilots.
In 1989, he purchased the 44 per cent of Republic Bank owned by Barclays Bank, via a loan from the same Barclays Bank, at $2.00 per share. At the time of writing, the share price is $86.00. He invested in methanol at a time when its price on the commodity markets was at an historic low. People in the know predicted then that it was going to be the final undoing of CLICO. When production began, the price of methanol soared to unprecedented highs. He went on to invest in real estate, buying out Home Construction. He got into spirits, buying a large chunk of Angostura, and proceeded to establish the CL World Brands platform in Scotland with a slew of alcoholic beverages. Of course, not everything he touched turned into gold. He invested in the Caribbean Tyre Company in Point Fortin which went bust. He bought over British American Insurance which is now the subject of a Central Bank’s intervention that has come years too late.
He couldn’t accomplish all this without a vision. Clearly, he’s the quintessential dreamer; no doubt with empire creation uppermost in his mind. But dreams have to be financed. Therefore, we need to look at these huge investment undertakings in the context of a grossly underdeveloped capital market in T&T that lacks both breadth and depth. Enter the EFPA, acronym for the Executive Flexible Premium Annuity, which was a product created at CLICO due to some loophole(s) in the Insurance Act. This product possessed the nomenclature of insurance but in reality it operated as a simple fixed deposit. The EFPA began selling like hot cakes and CLICO’s army of agents were being handsomely rewarded.
This generated a pool of funds large enough to finance the dreams. Naturally, problems would arise since the funds were being placed for short periods (up to 5 years, I think) and were being invested in projects with much longer gestation periods. The solution to this was to set the agents bigger and bigger targets every year and, of course, increase their commissions. While the agents did deliver in large measure, this also had the adverse effect of increasing the company’s cost of funds. Thus they had to keep on increasing the EFPA rates (to the point where they were way above market rates) to counteract the mismatch in maturing liabilities and assets. Incidentally, this is similar to the events of the 1980s when the Finance Houses began to crash, one by one, with their liquidity issues.
However, markets have elastic limits too. Thus one could argue that the sales of EFPAs began to fall off because of market saturation rather than any risk metrics being employed by investors.  The simultaneous collapse of methanol and ammonia prices served to worsen the situation.  Once the cash cows stopped delivering, liquidity problems were bound to surface. Thus,  unable to met  depositors’ claims , Mr. Duprey approached the Central Bank for liquidity support, apparently not realising that there’s no way the Central Bank would even contemplate such an action without taking full possession of the Group’s assets; which is exactly what it did.
 
THE WAY FORWARD
 
That the Central Bank did the right thing is beyond question. However, when Governor