Moontown

Trinidad Express

NOT OFFICIAL: Jwala Rambarran

Several local economists agreed yesterday that although the quarterly figures could be argued, they did in fact indicate a recession.

Jwala Rambarran said the government could easily refute the claims of a recession because there was no official body in Trinidad and Tobago that could declare a recession except the Central Statistical Office, which publishes statistics annually and not quarterly.

“Those numbers are not considered official numbers but whether or not they recognise (it), it is there. It is one piece of evidence that we are in a recession.”

Rambarran said there were declines across most sectors of the economy.

“We see a sharp drop in retail sales and that tells you across the board consumers are spending less,” Rambarran said.

He said local sales of cement was another leading indicator of what will take place “later down the line”.

“In three to six months down the road we are going to see the number of projects and the number of jobs decreasing because there has been a drop in the sale of cement.”

“So looking at that data tells me that there has been a slow down across the sectors and on the basis of the data we have, the data from the second quarter would prove that we are already nine months into a recession,” he said.

Rambarran said the data warranted attention.

“We are almost a year late in putting together a stimulus. A stimulus plan should have been put into place since earlier this year, he said.

Economist Dr Dhanayshar Mahabir said though the data may be not be entirely accurate, the Central Bank figures are beginning to show that he may have been right about the country being in a recession all along.

“What we are seeing is not surprising at all, even if the figures may be questionable, because we do not collect very accurate quarterly statistics of real GDP,” he said.

He said that the United States, recession is defined as three consecutive quarters of negative growth.

He said energy prices have been depressed since last September.

“As long as energy prices remain depressed the economy will continue to slow,” he said. University of the West Indies Economics professor Dr Patrick Watson said he expects other economies to go into recession.

“Recession is an economic reality… in a way many of us did not need the figures, but the figures are nice because they confirm it in the definition of successive.”

Aretha Welch awelch@trinidadexpress.com

Minister of Finance Karen Nunez-Tesheira said the Government is satisfied with the way CLICO has been using the first injection of cash provided by the State to bail out the crippled insurance powerhouse.

In response to questions about CLICO’s quick use of the first one billion dollars allocated, the Minister said,

“That was to be anticipated. We understand the background of CLICO. There were issues of the statutory fund being in deficit. And we expected that that billion dollars would have been utilised.”

She said all together the Cabinet had approved an estimated $5 billion for the CL Financial bailout.

She assured, however, that the money was being used “for the intended purpose”, to avoid the systemic risk (of a CLICO collapse.)

She said from what Cabinet had seen, “We are satisfied they (CLICO administration) are on the right path to recover CLICO and to certainly get back the tax payers dollars. In essence we believe…the commitment the Government has made to CLICO has been transferred to the regulator, which is the Governor of the Central Bank and has been utilised in the way it was intended.”

When asked when the next tranche of the allotted $5 billion would be handed over to the insurance company, as several employees have stated that liquidity issues were still hindering the company’s payments to customers, she suggested that those questions would be better answered by the Central Bank Governor, Ewart Williams or members of CLICO’s executive board.

Cabinet recently held a special meeting to the grant of further sums of money to CLICO and Government Ministers benefitted from a power point presentation by CLICO Chairman Shafeek Sultan-Khan and other officials.

In January, the Government moved to take control of CLICO and other CL Financial subsidiaries because the company could not repay hundreds of millions of dollars owed to creditors and depositors.

The Minister was speaking to the media after the launch of the 20 in 20 Mortgage Programme, which Scotia bank introduced to the market yesterday morning at the Scotia Hospitality Suite, at the Queen’s Park Oval yesterday morning.

Trinidad Express

Louis B Homer and Dave Persad

playing it safe: Security personnel line the front of the stage at Centre City Mall, during Prime Minister Patrick Manning’s address at the PNM meeting in Chaguanas on Monday night. -Photo: DAVE PERSAD

Prime Minister Patrick Manning returned from Jamaica Monday in time for that night’s PNM public meeting in Chaguanas, and announced that Trinidad and Tobago’s economy was the best performing in the Caribbean.

This, he said, was revealed during his discussions with heads of government in Jamaica.

The success, he said, was because of the management of the economy by the PNM.

When Manning spoke at a public meeting in Arima on July 27, he revealed a foiled plot to assassinate him by an unnamed organisation.

When he came to Chaguanas Monday night, Manning arrived in a motorcade of eight patrol vehicles.

He was surrounded by eight police officers as he entered the meeting at Centre City Mall carpark.

And when he addressed the crowd, four men lined the front of the stage. The crowd, usually within touching distance of the stage, were kept more than 25 feet away.

Manning made no mention of the recent attack on a British couple in Tobago.

He spoke of the progress of the draft constitution for Trinidad and Tobago.

Manning said “we are not in a hurry. We want maximum participation by the public. It took three years to develop the framework and it will take two more years to be completed.”

General elections would be constitutionally due in 2012, one year after Manning’s time frame for the adoption of the new constitution.

Manning said “another round of public consultation on constitutional reform will take place with a view to drafting a Green Paper.”

He said there were already 51 consultations, and a Green Paper will be prepared.

“Finally we propose to have a Queen’s Hall system of public discussions to hammer out the differences, after which a final constitution will be brought to Parliament.”

He said the new constitution should reflect the history and culture of the people, and not one prepared by technocrats and intellectuals.

He said previous constitutional committees consisted of academics “and when the constitution proposed by them went to Parliament it had to be changed”.

He said “The approach was fundamentally flawed. If you set up academics alone, it will be flawed.”

He again hit out at UNC Caroni East MP for his statement on ethnic cleansing during a recent debate in Parliament.

“They would call on the race card to try and discredit the PNM, (and) to divide the society.”

Manning told his supporters not to get involved in the race issues but concentrate on living together in harmony. He said there should be a commitment on the issue.

“When we say we want to live together in harmony with people who are different from us, I want it to be a commitment from your heart,” said Manning.

Camille Bethel cbethel@trinidadexpress.com

Trinidad and Tobago is in recession - according to data released by the Central Bank.

During the period October 2008 to March 2009 the country’s economic growth fell by more than four per cent.

The first quarter of 2009 showed a -3.3 decline in real GDP while the last quarter of 2008 showed a 1.1 per cent dip.

The statistics for the second quarter of 2009 have not yet been released.

A recession, according to the definition accepted by most economists, is when there are two successive quarters of economic decline in a country’s Gross Domestic Product (GDP).

The International Monetary Fund (IMF) advises that a broader number of indicators be used to ascertain whether or not a country is facing a recession.

A breakdown of the Central Bank’s Summary of Economic Indicators posted on its website on July 23 shows that the country has not only experienced two successive quarters of negative economic growth in its real GDP but declines across several sectors.

Last week Prime Minister Patrick Manning, during a breakfast meeting at La Romaine, advised the population to “release” their belts and breathe a little by taking advantage of existing opportunities in the financial sector, Central Bank Governor Ewart Williams said recently that available data showed that the Trinidad and Tobago economy was decelerating faster than anticipated and the country would likely register zero, or even negative GDP growth this year.

He maintained that the country’s economy was not in recession but in “stagnation”.

President of Guyana, Bharrat Jagdeo, told journalists at Jamaica House on Monday that there is a clear need for urgent financing for many CARICOM states to avoid a catastrophic situation.

Jagdeo, who is in the island on a working visit, was speaking in his capacity as Chair of a special Prime Ministerial Task Force, which includes Jamaica’s Prime Minister, Bruce Golding, set up by CARICOM to craft appropriate responses to the impact of the crisis on the region.

Members of the Task Force, excluding Prime Minister of St Vincent and the Grenadines, Ralph Gonsalves, met in Jamaica on Monday

“We are not seeking a write off, at this time, to a specific amount of debt. What we are seeking to do is to get these institutions, in principle, to agree that middle income countries of a particular kind, and those can be found in our region, where they have specific vulnerabilities, that they should be eligible for multilateral debt relief,” the Guyanese president said.

“They must also be eligible for financing, so they can refinance some of the high cost, short term debt,” Jagdeo added.

The Task Force has completed a dossier on each country, outlining the gaps that exist in each and where they plan to seek their solutions.

Jagdeo said the task force recognises that there is need for immediate action, and that most countries will have to seek multilateral assistance, including the International Monetary Fund(IMF), as the level of resources needed does not exist in the region.

“If they do not, then the situation will get significantly worse. They will face serious balance of payment difficulties, they will have to run down reserves, (there would be) exchange rate depreciation and, to fight that, most countries will have to push up interest rates,” he cautioned.

“One way of avoiding this, is going to the multilateral institutions to get some assistance to fill the gap from a fiscal perspective, and also balance of payment,” he outlined.

He said most states have already indicated that they will be seeking some kind of programme with the multilaterals. He noted that action has to be taken to stem the debt overhang in the medium term.

“For the medium term to be sustainable, something has to be done about the huge amount of resources extracted out of our economy to service the debt. Without us being able to address this situation, which is grave for many countries in the region, the prospect of having a sustainable medium-term framework looks dim at this point in time,” he stated.

The Task Force has agreed that a group of Heads will meet with the Heads of the multilateral financial institutions, to argue the case of middle income countries to be eligible for multilateral debt relief. The group of Heads will advocate for sufficient resources to refinance some of the debt that some member states have already contracted on commercial terms, or with high interest rates.

He said that there has been agreement to approach several countries, because to secure the support of the multilateral agencies would require political support from countries that are critical in the decision-making process at the level of the boards of the institutions, including China, the United Kingston and the United States.

CARICOM Heads will begin meeting with multilateral Heads by September. Jagdeo said that it is hoped to put the issue on the table at the annual meeting of the International Monetary Fund (IMF) and World Bank in October.

The Commonwealth Heads of Government meeting in Trinidad and Tobago, in November, will also be critical in garnering support for CARICOM’s position.

President of Guyana, Bharrat Jagdeo (right) addressing a joint press briefing with Prime Minister, Bruce Golding, at Jamaica House Monday. Jagdeo was speaking in his capacity as Chair of the special Prime Ministerial Task Force set up by CARICOM to craft appropriate responses to the impact on the region of the global economic crisis.(JIS photo)

This was indicated by Guyana’s president, Bharrat Jagdeo, when he addressed a special press briefing at Jamaica House on Monday. The briefing followed a meeting of the Special Prime Ministerial Task Force set up by CARICOM to craft appropriate strategies in response to the global economic crisis and its impact on the region.

Jagdeo, who chairs the committee, said that some of the proposed conditions would present serious challenges to these countries.

“The impending changes in the agreement will present grave difficulties for some of our member states,” he said.

“They didn’t have to pay the full cost of the import of oil, immediately. The rest came as a loan to these countries, which they could have used for balance of payment purposes and budgetary support. This change now will jeopardize that arrangement and, therefore, put some of our countries at a disadvantage when we most need this support,” he explained.

He added that, from a regional perspective, CARICOM will have to approach Venezuela, “to say that we would like the impending changes altered or delayed.”

Jagdeo pointed to particular countries in the eastern Caribbean which have faced enormous problems, with downturn in several sectors, and subsequent significant losses in revenue. He noted that Antigua has lost 35 per cent of its revenue in the past year.

“They have difficulties paying on a monthly basis, wages and salaries in the public sector, and this problem is not unique to Antigua and Barbuda. Because of the weight of Antigua and Barbuda in the eastern Caribbean currency union, we have to ensure, at the task force level, that they receive all the support they can get from the bilateral and multilateral agencies,” he added.

Jamaica’s Prime Minister, the Hon. Bruce Golding, who also spoke at the briefing, said his government has to stress the fact that the national budget was predicated on the PetroCaribe arrangement.

Golding said that, while he understood some of the difficulties that may warrant changes to the agreement, Jamaica’s current budget, as well as its medium term economic programme, were predicated on the PetroCaribe agreement.

“We have already indicated to the Venezuelans that, while we understand some of the difficulties that may warrant a change in the PetroCaribe arrangement.not only our current budget, our medium term economic programme was predicated on the PetroCaribe arrangement as it now exists and, therefore, any sudden change would have a significant effect on our external and fiscal accounts,” he said.

Golding acknowledged that the genuineness of Venezuela’s friendship towards the Caribbean was unquestionable, as the deferred payment arrangement was unmatched.

“To be allowing deferment for 20 years at 2 per cent of as much as 60 per cent of the cost of the product, is a significant amount of generosity and, given the difficulty that Venezuela is now facing, it is not difficult to understand why they may need to make some adjustments in those arrangements,” he admitted.

“We want to work with them. I believe we will be able to work out a resolution to this issue,” the Prime Minister concluded.

The region’s concerns were triggered, mainly, by a proposal from Venezuelan president, Hugo Chavez, to amend the PetroCaribe arrangement so that beneficiaries pay all, or at least 80%, of the cash upfront and then receive direct loans from Venezuela, which would be limited to specific projects approved by Chavez’s administration.

It was expected that Golding would have been able to discuss the issue with President Chavez on Thursday, when the Venezuelan president was expected to pay an official one-day visit to Kingston. However, the visit was postponed, after Chavez sustained an injury on Sunday and was ordered to rest for eight days.

Minister of Energy, James Robertson, left the island Monday for Venezuela, at the invitation of their Minister of Energy and Petroleum, Rafael Ramirez, to hold further discussions.

After one of the calmest starts to the hurricane season in a decade, the experts from Colorado State University said the development of an El Nino effect in the Pacific had caused them to scale back their projections for the Atlantic.

Forecasters Philip Klotzbach (R) and William Gray

The El Nino phenomenon, which involves changes in atmospheric pressure in the southern Pacific, occurs every three to six years, disrupting global weather patterns.

In the Atlantic, El Nino events are associated with decreased levels of hurricane activity, said Philip Klotzbach and William Gray of Colorado State University.

“We continue to call for a below-average Atlantic basin tropical cyclone season in 2009. We also anticipate a below-average probability of United States and Caribbean major hurricane landfall,” they said.

They now project that there will be 10 named tropical storms this season, of which four will become hurricanes, and two of those major hurricanes.

Their earlier forecast in June had predicted 11 tropical storms and five hurricanes.

“This is the quietest start for more than a decade. The last time a storm didn’t form until August 5 was back in 1992,” Klotzbach said.

He added, however, that “a quiet start of the season doesn’t necessarily mean that the remainder of the season is going to be quiet.”

“Obviously people in Florida need to be prepared for the hurricane season as every year. 1992 was a very quiet hurricane season but then hurricane Andrew formed and did… tremendous damage,” he said.

Meanwhile, two tropical storms have formed in the Pacific off the coast of Mexico, according to Stormpulse.com, a website that tracks weather patterns.

The more powerful of the two, Enrique, was traveling in a northwesterly direction with wind speeds of 120 kilometers (60 miles) per hour.

Farther out, a tropical stormed named Felicia also was traveling in a northwesterly direction toward Hawaii with winds of 72 kilometers (45 miles) per hour.

PROVIDENCIALES, Turks and Caicos Islands — The Turks and Caicos Islands Tourist Board (TCITB) is facing yet another lawsuit for alleged non-payment of monies owed and this time, according to one of the attorneys involved, the damages claimed could easily amount to over US$5 million.

Ronald Monterosso, attorney for Film Life Inc., told TCI Net News, “I served papers on the Tourist Board on July 16, 2009, after months of attempting to negotiate a settlement and sent copies by fax and email to the Governor, the Attorney General, the Premier and Deputy Premier and have yet heard nothing from anyone.”

According to Monterosso, “The Tourist Board and the Territory are due to appear in court on August 11.”

Legal documents seen by TCI Net News state that, in September 2007, Film Life, Inc., a New York based production company, entered into a contractual agreement with the TCITB to produce a Turks and Caicos International Film Festival (TACIFF) once a year for five years, with the first to take place in October of 2008 and the last to take place in 2012.

TCITB undertook to pay Film Life, Inc. an initial non-refundable payment of US$650,000 along with a US$2,000,000 annual budget for each TACIFF over and above the initial payment.

According to the court documents, the TCITB made the initial payment of $400,000, but to date has not paid any additional payments, and has refused to schedule a film festival despite the terms of the agreement.

In late March 2009, numerous demands were reportedly made to the TCITB via email and fax requesting arbitration pursuant to the agreement. These demands were addressed directly to the Minister of Tourism, the Governor of the TCI, as well as the Attorney General for the TCI. Demands were also made by registered mail addressed the Director of Tourism and the Minister of Tourism.

On or about April 27, 2009, Wayne Garland, Minister of Tourism, reportedly met with counsel for Film Life, Inc. in New York City and promised to work toward resolving the issues between the parties, but refused to discuss arbitration during that meeting.

Since then, despite reported frequent attempts by Film Life Inc. and their counsel to communicate with the TCI government and/or TCITB, neither has responded to the demands for arbitration, and has ceased all communication with Film Life Inc. and their counsel; leading to a determination by Film Life Inc. that they (TCITB) have refused arbitration, resulting in a breach of contract.

A petition to compel arbitration between the TCITB and Film Life Inc. will reportedly be filed by the latter in a New York District Court on August 11, 2009, in an attempt to bring resolution to the situation.

This latest lawsuit follows hard on the heels of another claim filed on July 24, also in a New York District Court, by Condé Nast Publications, seeking to recover more than one million dollars in unpaid advertising, attorney’s fees, and interest from the TCITB.

The TCITB promotes the TCI as a potential tourism destination using a number of resources, including advertising and international events, and the pending lawsuits by influential media groups may well have a negative impact on the TCI’s tourism industry.

A hint of this is already evident as the TCI is not even listed as an option in the location search of the Condé Nast Traveler 2009 Gold List of the best places to stay in the world. Twelve Caribbean locations, comprising 25 resorts, are listed this year by Condé Nast Traveler, but none from the TCI, compared to several nominations in previous years.