Akash Sama­roo

Re­port­ing from Ja­maica

An­tigua and Bar­bu­da Prime Min­is­ter Gas­ton Browne is urg­ing the new Kam­la Per­sad-Bisses­sar Gov­ern­ment to ful­fil a com­mit­ment made to the Or­gan­i­sa­tion of East­ern Caribbean States (OECS) dur­ing the tenure of the Peo­ple’s Part­ner­ship gov­ern­ment—an oblig­a­tion that would cost Trinidad and To­ba­go ap­prox­i­mate­ly US$60 mil­lion.

This mat­ter stems from the mas­sive fi­nan­cial cri­sis that orig­i­nat­ed with the col­lapse of two ma­jor Caribbean in­sur­ance and fi­nan­cial com­pa­nies: Colo­nial Life In­sur­ance Com­pa­ny (Cli­co) and British Amer­i­can In­sur­ance Com­pa­ny (Baico). This cri­sis, which be­gan in late 2008, sent shock­waves across the Caribbean, par­tic­u­lar­ly af­fect­ing T&T (where Cli­co was head­quar­tered) and the OECS.

“About a bil­lion dol­lars was lost by EC (East­ern Caribbean) de­pos­i­tors. Those are funds that were in­vest­ed by Cli­co/Baico in the Trinidad econ­o­my. And we felt that there should have been greater par­tic­i­pa­tion of Trinidad and To­ba­go in the res­o­lu­tion of the is­sue. Now, the pre­vi­ous Kam­la (Per­sad-Bisses­sar) ad­min­is­tra­tion had agreed to pro­vide a com­pen­sa­tion of 100 mil­lion US dol­lars for the OECS coun­tries, of which 40 mil­lion US dol­lars is paid. Un­for­tu­nate­ly, the (Dr Kei­th) Row­ley ad­min­is­tra­tion did not ho­n­our the re­main­ing 60 mil­lion US dol­lars,” Browne ex­plained to Guardian Me­dia dur­ing a lunch break at the 49th meet­ing of Cari­com Heads of Gov­ern­ment in Ja­maica yes­ter­day.

Browne said with the re­turn of Per­sad-Bisses­sar as T&T Prime Min­is­ter, he is hop­ing the bal­ance will be paid. He, how­ev­er, ac­knowl­edged that T&T has its own fi­nan­cial prob­lems.

“So, we’re not even ask­ing for all of it to be paid at once. It could be a long-term bond, payable at a low in­ter­est rate over an ex­tend­ed pe­ri­od in or­der to re­duce the cash flow im­pact. But those are ne­go­ti­a­tions that we hope to have with Kam­la (Per­sad-Bisses­sar). And I re­main hope­ful that we’ll be able to re­solve the is­sue.”

Per­sad-Bisses­sar did not at­tend the on­go­ing Cari­com meet­ing in Ja­maica.

How­ev­er, PM Browne said the op­tion of send­ing a small OECS del­e­ga­tion to T&T is a vi­able op­tion to dis­cuss the mat­ter.

“Mo­hammed will go to the moun­tain,” he said.

The Cli­co and Baico fall­out had a par­tic­u­lar­ly se­vere and dis­pro­por­tion­ate im­pact on the Or­gan­i­sa­tion of East­ern Caribbean States (OECS) and the East­ern Caribbean Cur­ren­cy Union (EC­CU).

The OECS/EC­CU re­gion had the largest ex­po­sure to Cli­co and Baico as a share of their GDPs, with some coun­tries’ ex­po­sure reach­ing as high as 15 per cent of their 2009 GDP.

OECS gov­ern­ments were forced to un­der­take cost­ly in­ter­ven­tions and bailouts to mit­i­gate the cri­sis and pro­tect pol­i­cy­hold­ers. This placed a se­vere strain on their na­tion­al bud­gets and sig­nif­i­cant­ly in­creased pub­lic debt.

Browne said the in­equities faced by OECS mem­bers in the Caribbean Sin­gle Mar­ket and Econ­o­my (CSME) frame­work were dis­cussed dur­ing yes­ter­day’s meet­ing. And again, he ref­er­enced T&T.

“There must be some ben­e­fit for the OECS coun­tries. You’d find, for ex­am­ple, that the MD­Cs (more de­vel­oped coun­tries), they pro­duce most of the goods that we con­sume. Trinidad and To­ba­go, for ex­am­ple, is like a su­per­mar­ket to the OECS. A lot of the goods that we con­sume, they’re im­port­ed from Trinidad and To­ba­go,” he said.

“But we can al­so source goods ex­tra-re­gion­al­ly at a cheap­er price. But the CET (Com­mon Ex­ter­nal Tar­iff) pre­cludes us from im­port­ing those goods, even from the Do­mini­can Re­pub­lic, for ex­am­ple, where we can get bet­ter prices. So tech­ni­cal­ly speak­ing, we are sub­si­dis­ing prices for the MD­Cs.”

He said with­in the treaty, there is the Caribbean De­vel­op­ment Fund (CDF), which is re­quired to as­sist coun­tries dis­placed as a re­sult of the CSME to as­sist in ca­pac­i­ty build­ing but MDC’s have failed to meet their sub­scrip­tion to the CDF.

OECS coun­tries have felt that the Cari­com arrange­ments, par­tic­u­lar­ly the CSME, have his­tor­i­cal­ly dis­ad­van­taged their man­u­fac­tur­ing sec­tors, he said.

St Vin­cent and the Grenadines Prime Min­is­ter Dr Ralph Gon­salves re­cent­ly used the phrase “Mo­nop­oly mon­ey” to de­scribe T&T’s cur­ren­cy due to the se­vere dif­fi­cul­ties Vin­cent­ian traders face in con­vert­ing their earn­ings in TT dol­lars in­to hard for­eign cur­ren­cy.

PM Browne said he would nev­er re­fer to any Cari­com mem­ber’s cur­ren­cy in that man­ner.

How­ev­er, he said, “But in terms of set­tling these out­stand­ing in­voic­es in US dol­lars, un­der­stand­ing they’re small amounts, three mil­lion US dol­lars, I don’t know that is in­sur­mount­able. So, as far as prac­ti­ca­ble, I be­lieve that Trinidad and To­ba­go should set­tle, and to set­tle in the ap­pro­pri­ate cur­ren­cy, that is US dol­lars. And it’s a work in progress. These is­sues that have been raised now for sev­er­al years, and we’re hop­ing that the new ad­min­is­tra­tion will give a tan­gi­ble ef­fect to re­solv­ing these is­sues.”