NADALEEN SINGH

Cen­tral Bank Gov­er­nor, Ewart Williams has called for stronger reg­u­la­tion of state en­ter­pris­es as he ex­pressed con­cern about the grow­ing debt oblig­a­tions of these pub­lic sec­tor agen­cies. "Sev­er­al im­por­tant gov­ern­ment in­sti­tu­tions, most no­tably the statu­to­ry cor­po­ra­tions, re­main be­yond the purview of reg­u­lar reg­u­la­to­ry over­sight," Williams said while ad­dress­ing stake­hold­ers at the launch of the Fi­nan­cial sta­bil­i­ty re­port on Tues­day as he list­ed the vul­ner­a­bil­i­ties of the fi­nan­cial sys­tem in T&T. Williams iden­ti­fied ma­jor vul­ner­a­bil­i­ties in the sys­tem as the out­dat­ed leg­is­la­tion gov­ern­ing the fi­nan­cial sec­tor as well as the cen­tral gov­ern­ment's poor reg­u­la­to­ry over­sight of state en­ter­pris­es. "The dom­i­nance of mixed con­glom­er­ates with siz­able in­tra­group ex­po­sures tends to re­duce trans­paren­cy, and out­dat­ed fi­nan­cial leg­is­la­tion does not pro­vide for ad­e­quate con­sol­i­dat­ed su­per­vi­sion to deal with com­plex con­glom­er­ate struc­tures.

But Williams pro­vid­ed the as­sur­ance that the Cen­tral Bank is de­ter­mined to do all it can to al­le­vi­ate the vul­ner­a­bil­i­ties. He al­so said that the bank has a leg­isla­tive agen­da to deal with some of the po­ten­tial weak­ness­es in the sys­tem. David Ab­dul­lah, Pres­i­dent of the Fed­er­a­tion of In­de­pen­dent Trade Unions (Fi­tun), sup­port­ed the Gov­er­nor, not­ing that there was a need for stronger reg­u­la­tion and an ur­gent re­view of the poli­cies–par­tic­u­lar­ly those gov­ern­ing the state's spe­cial pur­pose com­pa­nies. "The gov­ern­ment's pol­i­cy es­tab­lish­ing spe­cial pur­pose com­pa­nies, such as Ude­cott, which are not be­ing prop­er­ly reg­u­lat­ed, has caused T&T to en­ter in­to a sit­u­a­tion where these bod­ies are amass­ing very large debt which will have to be paid by the tax­pay­er, and this bor­row­ing can have im­pli­ca­tions for the sta­bil­i­ty of the fi­nan­cial sec­tor, in par­tic­u­lar the ex­change rate," Ab­dul­lah said.

Op­po­si­tion Leader, Bas­deo Pan­day al­so shared these con­cerns. "For a long­time the Gov­ern­ment has been promis­ing that reg­u­la­tions would be put in place. They have failed to do so, and the gov­er­nor is cor­rect when he said there was need for more pre­dictable reg­u­la­tion and stronger over­sight," Pan­day not­ed. He said in the first in­stance, suit­able in­di­vid­u­als should be ap­point­ed to en­force the statu­to­ry reg­u­la­tions. "The reg­u­la­tions must be en­forced. Their fail­ure to en­act ad­e­quate leg­is­la­tion, to pro­vide com­pe­tent over­sight and an ad­e­quate reg­u­la­to­ry regime, has al­ready re­sult­ed in the col­lapse of a ma­jor cred­it union. "The peo­ple to over­see the process should be cho­sen on the ba­sis of mer­i­toc­ra­cy, so there would be prop­er en­force­ment of the reg­u­la­tions," Pan­day added. Michael An­nisette, pres­i­dent of the Sea­men and Wa­ter­front Work­ers Trade Union, said if reg­u­la­tion is not fol­lowed through on a time­ly ba­sis gov­ern­ment must clamp down on those en­ti­ties.

"I agree that mon­i­tor­ing must be ex­er­cised in a time­ly fash­ion. There must be over­sight and su­per­in­tend­ing of the ac­counts in a sus­tain­able and fun­da­men­tal way, that's the on­ly way you can have checks and bal­ances on these in­sti­tu­tions. "There are cas­es where ac­tion starts af­ter the fact and not be­fore. The ac­tion must be pre­ven­ta­tive and not re­ac­tive," An­nisette said. He said peo­ple who are giv­en re­spon­si­bil­i­ty are not al­ways ac­count­able. Ac­count­abil­i­ty de­mands a re­spon­si­bil­i­ty if you don't ac­count you pay the price. There must be a de­ter­rent mech­a­nism in place." An­nisette added. He said giv­en the re­port­ing mech­a­nisms and how the sys­tem of dis­burs­ing funds in the gov­ern­ment is done, there is al­ready a process and pro­ce­dures for man­ag­ing state en­ter­pris­es. He al­so said there is over­sight in that sys­tem, in­clud­ing the par­lia­men­tary com­mit­tees which are in place. The state en­ter­pris­es are sim­ply ig­nor­ing these reg­u­la­tions and no one is fol­low­ing up to en­sure com­pli­ance.