An­tho­ny Wil­son

Ear­ly on in the life of this col­umn, it was de­cid­ed to de­part from the jour­nal­is­tic con­ven­tions and to give this space a strong voice that ex­pressed the opin­ions held by the au­thor. There are not many news­pa­pers around the world in which ed­i­tors write a reg­u­lar com­men­tary on top­i­cal is­sues and are giv­en the free­dom to ex­press their opin­ion on some of the con­tro­ver­sial top­ics of the day. For grant­i­ng me this lat­i­tude, I am grate­ful to Guardian Me­dia Ltd.

This col­umn has tak­en a strong stand on what was felt to be the cur­rent ad­min­is­tra­tion's ini­tial mis­han­dling of the Cli­co mat­ter. Be­tween Sep­tem­ber 2010 and ear­li­er this year, this space dealt with var­i­ous as­pects of the Cli­co is­sue about 50 times. Al­though it is clear that the po­si­tions held on the Cli­co is­sue did not win the com­men­ta­tor any friends with those who were pre­vi­ous­ly in charge of the Min­istry of Fi­nance, it is al­so ap­par­ent that the Gov­ern­ment's po­si­tion on pay­ing back the hold­ers of the Ex­ec­u­tive Flex­i­ble Pre­mi­um An­nu­ities-and oth­er in­vest­ments sold by the fi­nan­cial­ly-strapped in­sur­ance com­pa­ny-would not have changed were it not for the un­yield­ing ad­vo­ca­cy in this space.

The for­mer Min­is­ter of Fi­nance, Win­ston Dook­er­an, is to be com­mend­ed, of course, for com­ing around to the po­si­tion that his ini­tial of­fer to the pol­i­cy­hold­ers was doomed to cause Cli­co's af­fairs to be tied up in lit­i­ga­tion for years, and that the on­ly way to clear the dark clouds that hang over the lo­cal econ­o­my would have been to un­block the log­jam of the ini­tial of­fer. The proof that the Gov­ern­ment's re­vised of­fer was ac­cept­able to the over­whelm­ing ma­jor­i­ty of the Cli­co pol­i­cy­hold­ers is demon­strat­ed by the fact that as of last month, some 25,115 hold­ers of the short-term in­vest­ment prod­ucts, in­clud­ing cred­it unions and trade unions, had ac­cept­ed the Gov­ern­ment's set­tle­ment of­fer, amount­ing to $10.268 bil­lion.

That prob­a­bly ac­counts for more than 90 per cent of the li­a­bil­i­ties owed to the pol­i­cy­hold­ers. In this space, it has been ar­gued that un­less and un­til the Cli­co mat­ter is com­plete­ly re­solved, the T&T econ­o­my would con­tin­ue to limp along with min­i­mal new in­vest­ment by lo­cals in the do­mes­tic econ­o­my. In de­liv­er­ing the 2013 bud­get, Min­is­ter of Fi­nance Lar­ry Howai gave a com­mit­ment that the Gov­ern­ment would launch the Cli­co In­vest­ment Fund (for­mer­ly known as NEL 2) on No­vem­ber 1 and that trad­ing on the T&T Stock Ex­change would be­gin on Jan­u­ary 2, 2013, for the units of those per­sons who ex­changed their 11–20-year bonds for units in the Cli­co In­vest­ment Fund. He al­so com­mit­ted that arrange­ments had been made in the bud­get, in keep­ing with arrange­ments in place for sim­i­lar funds, for the in­come gen­er­at­ed by the fund to be tax-ex­empt in the hands of in­vestors. Ac­cord­ing to Mr Howai: "This ac­tion will bring the Cli­co mat­ter to an end, hav­ing set­tled all the oblig­a­tions com­mit­ted by this Gov­ern­ment."

As would be re­called, the Gov­ern­ment has agreed to stand in the shoes of the Cli­co pol­i­cy­hold­ers by agree­ing to pur­chase their poli­cies from them for cash pay­ments for amounts less than $75,000 and com­bi­na­tion of cash and ze­ro-coupon one-20 year bonds for amounts ex­ceed­ing $75,000. The Gov­ern­ment would than seek to re­cov­er the near­ly $20 bil­lion it has used to re­solve this sit­u­a­tion by tak­ing own­er­ship of Cli­co as­sets.

The Gov­ern­ment al­so plans to in­cor­po­rate a new in­sur­ance com­pa­ny in­to which those tra­di­tion­al poli­cies and oth­er as­sets will be trans­ferred from Cli­co. That new com­pa­ny, of which the Gov­ern­ment would con­tin­ue to hold a 49 per cent stake, one as­sumes, will con­tin­ue to man­age the tra­di­tion­al poli­cies. If Mr Howai is able to de­liv­er on the five Cli­co com­mit­ments-launch­ing the Cli­co Fund; trad­ing the units in the fund; tax-free in­come from the fund; es­tab­lish­ment of the New Cli­co and a plan to re­cov­er the $20 bil­lion spent on the bailout-out­lined in the bud­get in the time he set out, he would go a long way to en­sur­ing that the T&T econ­o­my grows by 2.5 per cent in 2013.

In fact, if the Cli­co set­tle­ments is re­solved in the way that Mr Howai out­lined in the bud­get, there is an up­side pos­si­bil­i­ty that the econ­o­my will take off next year, with growth ex­ceed­ing the tar­get in the bud­get. If this comes to pass, there is sure to be a steady, but strong ap­pre­ci­a­tion next year in as­set val­ues-such as lo­cal stocks, prop­er­ty, art and bonds-as there would be near­ly $11 bil­lion held by over 25,000 T&T na­tion­als look­ing for suit­able, long-term in­vest­ments with re­turns that ex­ceed the rate of in­fla­tion.

If the Gov­ern­ment's ac­tions serve to free up close to $11 bil­lion, it seems to me that the Gov­ern­ment al­so has some re­spon­si­bil­i­ty to en­sure there are suit­able in­vest­ment op­por­tu­ni­ties for that mon­ey. If not, there is like­ly to be an in­fla­tion­ary spi­ral the likes of which this coun­try has not ever ex­pe­ri­enced. Em­pow­er­ment through pat­ri­mo­ny This brings me to the sec­ond as­pect of this com­men­tary.

Last week, the Se­cu­ri­ties Deal­ers As­so­ci­a­tion of T&T ho­n­oured me for my con­tri­bu­tion to the de­vel­op­ment of the lo­cal se­cu­ri­ties mar­ket main­ly for ad­vo­cat­ing the virtues of lo­cal share own­er­ship and for Gov­ern­ment to do all in its pow­er to broad­en the num­ber of lo­cals who are in­vest­ing in shares. This col­umn has con­sis­tent­ly ar­gued that lo­cal in­di­vid­u­als and in­sti­tu­tions should own the pat­ri­mo­ny rep­re­sent­ed by the prof­itable state-owned en­ter­pris­es such as First Cit­i­zens, Na­tion­al Gas Com­pa­ny, Phoenix Park Gas Proces­sors and oth­ers.

But in a re­al sense, I feel like a fail­ure be­cause al­though this col­umn has waged a cam­paign for near­ly ten years to con­vince both this ad­min­is­tra­tion and the pre­vi­ous one that the ben­e­fits of pri­vatis­ing some of the coun­try's prof­itable state en­ter­pris­es far, far out­weigh the down­side, not one state en­ter­prise has been di­vest­ed or pri­va­tised in that pe­ri­od. Sad­ly, while the cur­rent ad­min­is­tra­tion has spo­ken about di­vest­ing part of its stake in First Cit­i­zens and in merg­ing T&T Mor­gage Fi­nance with the Home Mort­gage Bank and sell­ing the merged com­pa­ny on the lo­cal stock mar­ket, they have so far ad­hered to the PNM (un­der Patrick Man­ning) the­o­ry of own­er­ship in this coun­try, which is, that the coun­try's pat­ri­mo­ny should be held by the State on be­half of the peo­ple of the coun­try, and the way that cit­i­zens ben­e­fit would be by the State then dis­pens­ing ser­vices and sub­si­dies to the cit­i­zens.

Im­plic­it in what I have been writ­ing is the no­tion that peo­ple need to take more re­spon­si­bil­i­ty for their fi­nan­cial fu­ture and by tak­ing re­spon­si­bil­i­ty for their fi­nan­cial fu­ture, they would need to de­pend less on the State. If there is no move by the Gov­ern­ment to pri­va­tise state as­sets in the 2013 fis­cal year, the Gov­ern­ment could be set­ting the coun­try up for an in­fla­tion­ary bub­ble with­out any re­al in­crease in the wealth of the na­tion.