Moontown

When the House of Assembly meets tomorrow, Friday, August 7, a number of land resolutions should be debated.

Minister of Housing and Lands, Michael Lashley, is expected to move the passing of a measure to lease to the Trustees of the Barbados Diabetes Foundation, Crown land at Lot B, Warrens, St. Michael. This land is to be used to construct the Headquarters of the Diabetes Foundation, a diabetes centre and clinic.

He will also seek to lease to the National Insurance Board, Crown Land at Pine Plantation Road, St. Michael, to construct the Headquarters of the Caribbean Examinations Council (CXC). Both Resolutions are under Section Five of the (Vesting and Disposal) Act, Cap. 225.

Meanwhile, Prime Minister David Thompson is expected to move the First Reading of the Order of National Heroes (Amendment) and the Land Development Duty (Amendment) Bills, 2009.

Minister of Education, Ronald Jones, will move the First Reading of the Student Revolving Loan Fund (Amendment) Bill, 2009. (BGIS)

Facebook ws not completely taken offline by the attack

Micro-blogging service Twitter and social networking site Facebook have been severely disrupted by hackers.

Twitter was taken offline for more than two hours whilst Facebook’s service was “degraded”, according to the firms.

The popular sites were subject to so-called denial-of-service attacks on Thursday, the companies believe.

Denial-of-service (DOS) attacks take various forms but often involve a company’s servers being flooded with data in an effort to disable them.

“Attacks such as this are malicious efforts orchestrated to disrupt and make unavailable services such as online banks, credit card payment gateways, and in this case, Twitter for intended customers or users,” said Twitter co-founder Biz Stone on the company’s blog.

The service was restored shortly after the blog post, but the companies have had to continue to fend off the attack.

Facebook said its service was reduced but not taken offline.

“No user data was at risk and we have restored full access to the site for most users,” spokeswoman Brandee Barker told the AFP news agency.

“We’re continuing to monitor the situation to ensure that users have the fast and reliable experience they’ve come to expect from Facebook.”

Poster Child

Both sites have previously been targeted by hackers.

For example, in January this year Twitter announced that 33 accounts had been hacked, including those belonging to US President Barack Obama and singer Britney Spears.

Twitter CEO Evan Williams on BBC Two’s Newsnight

The latest attacks are what is known as a denial-of-service. These often use networks of computers - known as botnets -under the control of hackers.

The strategy is often employed by protestors against, for example, government websites, said Roger Thompson, chief research officer at security firm AVG.

“Twitter has become a poster-child for our always-connected, always-on internet culture,” he told BBC News.

“With the eyes of the world’s media all trained on Twitter at the moment, those behind this latest attack may be using it as a means of highlighting the vulnerability of the sites we take for granted.

“There is no profit to be made from DOS and those who do carry out an attack like this will lose their botnet, showing there is no gain to be had.”

Both sites now have millions of users worldwide.

Facebook claims more than 250m active users whilst a ComScore study suggests that Twitter had around 45 million users worldwide as of June 2009.

However, as many users interact with the service through mobile phones or third-party software, the actual number of users is likely to be higher.

The sites recently garnered worldwide attention when they were used by Iranians to co-ordinate demonstrations following the election of Mahmoud Ahmadinejad as president.

Many protestors believed there was electoral fraud and opposition leader Mir Hussein Mousavi should have won.

Twitter chose to delay upgrade work during the protests to allow communication to continue.

In a BBC interview, co-founder Evan Williams denied the move had not been a response to a US State Department request.

MOON TOWN IS THE PLACE TO BE TONIGHT. ALL CARIB BEER LOVERS WOULD BE TREATED TO THREE CARIB BEERS FOR ONLY $5….. A TREAT THAT CANNOT BE HAD ANYWHERE ELSE IN BARBADOS.

ENJOY THURSDAY’S NIGHT STEEL PAN, SEACAT AND CARIB BEER IN MOON TOWN, ST. LUCY, BARBADOS, A ONCE IN A LIFE TIME TREAT.

WE ARE STILL CATERING TO LOCALS AND TOURISTS, AND AS A RESULT, SEA CAT IS STILL BEING SOLD AT HALF PRICE, FOUR MACKESON FOR $10, FIVE LARGE BANKS BEERS FOR $10 AND SIX SMALL BANKS BEERS FOR $10.  A RED CARPERT WELCOME AWAITS YOU.

BLACK EYE PEAS AND RICE; BAKED TURKEY

BAKED CHICKEN; BAKED PORK; MACARONI PIE

TURKEY SOUP; SWEET POTATOES MASHED; GRILLED BARRACUDA

FRIED POT FISH; FISH GRAVY; BEEF STEW

STEAMED VEGS; TOSSED SALAD

Left: Chairman of VMBS Roy Hutchinson. Right: President and CEO of VMBS Richard Powell. - photos by Winston Sill/Freelance Photographer Victoria Mutual Building Society (VMBS) last year reported robust growth in mortgage loan portfolio, but is now projecting that business will be so bad this year that it will erase all of the gains in 2008.

Roy Hutchinson, chairman of the VMBS, attributes the expected fall-off mainly to reduction in effective demand, which in turn, he said, is precipitated by the increase in lending rates by the National Housing Trust (NHT), and the growing cost of credit.

The result, real estate is more expensive to acquire, and the cost of loans to acquire houses have also shot up in the past year.

So, “In 2009 your society is likely to experience a reduction in net mortgage disbursements by as much as 50 per cent, year over year,” said Hutchinson at the society’s annual general meeting last Thursday.

Hutchinson had just reported that business activity rose 39.6 per cent, pushing the mortgage loan portfolio to $28.2 billion as at December 2008.

In that year, 1,767 new loans were disbursed, compared to 1,552 new loans disbursed in 2007, VMBS’s annual report shows.

Already seeing reduction

Richard Powell, president and chief executive officer of VMBS, told Wednesday Business that the society is already seeing the reduction.

“We have already seen in the first half of this year a reduction in effective demand for mortgages,” he said.

“There is a growing demand for housing solutions but the afford-ability of households have been affected by higher interest rates, loss of household incomes because of all of the restructuring and downsizing and job losses that are taking place in the economy, inflation has been a problem over the last couple of years,” he further explained.

“We also had a combination of increased prices in terms of new construction, higher cost of financing, stress on household incomes which have served to depress demand. Indeed, also the increase in NHT rates would have been a contributing factor,” said Powell.

State-owned NHT - which partners with private mortgage lenders to bring down the cost of funds to borrowers - has a commanding presence in the market, and its policies tend to drive real estate activity.

But its last adjustment of rates was back in June 2008.

That VMBS is only feeling the effects a year later, and that is not unusual, according to Powell, who says NHT’s actions tend to take some time to be felt throughoutthe market.

Lagging

“Disbursements lag approvals because when people are going to buy in a housing scheme, they (the institutions) may approve them for the loan but disbursement does not take place for six months or more,” he said.

“So when you get a slowdown in approvals, you don’t see the slow-down in approvals until sometime later. So that is why we made the point in our report that although the disbursements this year will be down by comparison to last year, it is from last year we have been seeing reduction in the approvals. So you might think of the approval as a leading indicator to the disbursements.”

Powell did not quantify the level of declines seen by VMBS so far this year.

The society, the second largest in a market of four private players, grew revenues by 15 per cent last year, and grew profits 14 per cent to $743.8 million.

Creditable performance

Hutchinson said some of the society’s subsidiaries performed creditably.

There was some residual impact of the global credit crunch on Victoria Mutual Wealth Manage-ment Limited, Hutchinson said, without elaborating. But the division grew after-tax profit by 22 per cent, to $59.35 million.

Victoria Mutual Insurance Company Limited also reported after-tax profits of $108.98 million, which reflects a 93.8 per cent jump over 2007, the building society announced.

The property division and money transfer operations underperformed, however, while the financial performance of VM Money Transfer Services Limited was negatively affected by the appreciation of the pound sterling, Hutchinson said in his statement.

Jamaica Gleaner

Marcelo Tortoriello (right), general manager of CACORP Caribbean Division, shares a joke with Andrew Reid, general manager of Pepsi-Cola Jamaica. CABCORP now owns 82 per cent of the local beverage company while PepsiAmericas retains 18 per cent under a deal struck in May. The men are seen here at a flag-raising ceremony marking the change of ownership control Monday, August 3 at the Pepsi Jamaica plant on Spanish Town Road, Kingston. - Winston Sill/Freelance Photographer Central America Beverage Corporation (CABCORP), the new majority owner of Pepsi-Cola Jamaica Bottling Company Limited and other regional operations that two months ago were owned by PepsiAmericas, is pumping US$10 million into its Caribbean assets, including US$3 million to US$4 million infusion in the local plant to boost capacity.

CABCORP in May acquired 82 per cent of PepsiAmericas’ holdings under a joint venture agreement that sees PepsiAmericas retaining an 18 per cent share.

The investment in Jamaica, which converts to J$267 million to J$356 million, will “improve manufacturing capability,” Marcelo Tortoriello, general manager CABCORP Caribbean division, said Monday at a ceremony in Kingston marking the ownership change.

The improvements occurred over several weeks, and the new line was commissioned in July.

“Prior to July, the plant was at full capacity, but with the enhanced line and new components added it has enhanced capability and so we are now in a position to increase throughput by at least 30 per cent,” added Andrew Reid, general manager Pepsi-Cola Jamaica.

Current team to retain jobs

Reid and his current team retain their jobs under the new owners, but he now reports to Tortoriello.

Jamaica’s soft drink market is estimated at approximately 12 million cases per annum, of which Pepsi-Cola Jamaica commands more than 60 per cent, accounting for 7.2 million cases, on average, sold domestically per year, said Reid.

Another 10 per cent of output is exported.

The company’s brands are distributed in Jamaica by Desnoes and Geddes trading as Red Stripe.

Pepsi Jamaica carries 18 brands in its portfolio, including brands such as Ting, Mountain Dew, Toma, Tropicana, Gatorade and its water product, Essential, but also D&G flavours which it distributes on behalf of long-time partner Red Stripe.

“The enhanced stations will allow us to fill bottles at a greater speed than previously, moving from, say, 400 bottles per minute to 600 bottles per minute,” Reid told Wednesday Business.

The plan, he suggested, is to increase volume production for all brands bottled at the Spanish Town Road plant.

According to Reid, Jamaica was the first plant to be upgraded. Similar work is being replicated in Trinidad and Tobago, Barbados and Puerto Rico, the other three markets that make up CABCORP Caribbean.

“The same size investment will be made in each country,” said Reid.

Total spend

Reid said the total spend across all four markets would hit US$10 million, all of which is being financed by CABCORP.

The new joint venture, which gives CABCORP management control of the country operations, combines the Caribbean operations with that of CABCORP’s operations in Guatemala, Honduras, El Salvador and Nicaragua.

A new board has also been formed consisting of five CABCORP representatives including Tortoriello, and one representative of PepsiAmericas.

The 18 per cent stake retained by PepsiAmericas could potentially fall to PepsiCo Inc if a deal to acquire the bottler announced Tuesday is consummated.

CABCORP, prior to the deal in May, was bottler for PepsiAmericas, but also manufactured its own brands.

“Going forward, what we expect to see is an embracing of the new cultures through integration and alignment of the Jamaican practices with those of our parent companies both in Central and North America,” said Reid, speaking at a symbolic raising of the CABCORP flag at the company’s Spanish Town Road plant on Monday.

“We look forward to enhancing our dominant market share of not only the Pepsi-Cola brand but also our D&G brands in the portfolio through this synergy.”

Team remains intact

Reid’s team remains intact under the new ownership - among them Dianne Tomlinson-Smith, director of finance, Denise Dixon, marketing manager, Tanya White-Martin, head of human resource, and Richard Bailey, general sales manager - and the name of the company remains Pepsi-Cola Jamaica, at least for now.

“We believe that the business is better run by local people - we do have the best people in Jamaica - but will give some support,” said Tortoriello.

“Expect continued commitment to product quality from CABCORP, our continued investment in D&G flavour brands and promotion,” he added.

Pepsi Jamaica employs 184 persons, and no jobs were cut during the transition, the new owners said..

According to Tortoriello, a relaunch of the flagship brand, Pepsi-Cola, is also expected across the territories, but said it was too early to disclose the specific details.

“It would be immature to say what the investment will be but a sizeable investment will be made in the marketplace to relaunch the Pepsi brand… to take a number of form, new imaginary, new promotional activities all surrounding the marketing of the brand,” he said.

The relaunch is expected to kick off by the end of September.

“It’s early days yet but we expect to continue the brands that we already have in our portfolio. Of course, we will be doing some rationalisation,” added Reid.

“It is expected that there are brands that CABCORP has which may be similar to some of the brands we have, and so an opportunity to look and evaluate the two sets and make a determination which is the one that has more value to the Jamaica consumer and that can provide revenue for the company,” he further said.

Tortoriello added that new products would be introduced only after “lots of consumer research to understand the needs of the consumer in Jamaica.”

CABCORP sales last year reached US$500 million, but with the joint venture it is expected to grow to US$800 million this year.

 Jamaica Gleaner

Daraine Luton, Senior Staff Reporter

CARICOM Chairman and Guyanese President Bharrat Jagdeo (right) speaks to journalists at Jamaica House on Monday. Keenly listening is Jamaican Prime Minister Bruce Golding. - Rudolph Brown/Chief Photographer

CARIBBEAN COMMUNITY (CARICOM) Chairman Bharrat Jadgeo has expressed fear that regional nations will take longer than their developed counterparts to recover from the effects of the global economic crisis.

Speaking at a press conference at Jamaica House Monday following a prime ministerial task force meeting, Jadgeo said the recession has already crippled many economies of the region and some worrying indications are surfacing.

World leaders have suggested that countries could begin emerging from the recession next year. Jadgeo said because ofthe absence of a transmission mechanism, there may be no immediate improvement in the developing world “because it will come with a time lag”.

“We will be suffering from the consequences of the global crisis a little bit longer than the developed world and also there are some structural shifts that are taking place that would lengthen the lag period,” Jadgeo told journalists.

The CARICOM chairman cited activities in the bauxite industry, as well as the move by the powerful Group of Eight nations to clamp down on tax havens, as potentially toxic to the region.

According to Jagdeo, there are reports that China has been stockpiling cheap alumina, which could mean a lack of demand and lower prices for bauxite products when the crisis eases.

“It may take long for the prices to pick up in the post-crisis period because of the stockpile,” Jagdeo said.

Three of Jamaica’s four bauxite companies have ceased operating after low demand for alumina forced the sector to its knees. Prime Minister Bruce Golding has said the companies may never reopen unless Jamaica is able to source cheaper energy.

Tax paradise

Meanwhile, the decision by the G-8 to target tax paradises which protect individuals and firms could adversely affect the region’s recovery, Jagdeo said.

“The pursuit by the developed countries of the so-called harmful tax jurisdictions may make the financial sector in our region less attractive than it was before the US, G-20, and particularly the G8, moved to blacklist and ‘greylist’ countries in our jurisdiction based on their financial practices,” Jadgeo.

He told journalists that Antigua and Barbuda has said that it has lost 35 per cent of revenue compared with last year.

Jamaica has experienced a decline of seven per cent.

Jadgeo pointed to the fallout in remittances and tourism as factors affecting the region’s ability to survive and said they are crippled by heavy debt burdens which retard their ability to respond effectively to the economic crisis.

 Jamaica Gleaner

Daraine Luton, Senior Staff Reporter

The Caribbean Community (CARICOM) has announced that it intends to approach multilateral lending agencies with proposals for debt relief and loan refinancing.

At the same time, the regional body has signalled its intent to press Venezuela to at least delay proposed changes to the PetroCaribe arrangement.

Guyana’s President, Bharrat Jagdeo, head of the CARICOM prime ministerial task force charged with devising a recovery plan for the region in light of the turbulent world economic recession, has said Caribbean development may stagnate if the proposals are not taken on-board.

“A group of heads will go collectively to meet the heads of the multilateral financial institutions to argue that middle-income countries, with the peculiar vulnerability that we have in this region, must be eligible for multilateral debt relief,” Jadgeo told journalists at a press conference Monday.

“We will be arguing that we get multilateral debt relief and, second, that we get resources to refinance some of the debts that we have already contracted on financial terms or on high-interest rates,” Jadgeo added.

Economic crisis

The Guyana president has said that CARICOM countries would not be seeking “a write-off at this point in time for a specific amount of debt”.

He argued that the region has been unable to react effectively to the economic crisis because of the indebtedness of many countries.

In lending his support for the need to revisit loans to CARICOM countries, Jamaica’s Prime Minister Bruce Golding said it would allow countries fiscal space to develop their economies.

Golding pointed to the example of funds used to capitalise the National Road Operating and Constructing Company (NROCC), which his administration has called the debt queen, as one loan Jamaica would gladly refinance.

NROCC, the company responsible for the construction and operation of the country’s highways, is projected to have its loan liabilities climb to $46.3 billion this fiscal year.

“Included in that mix of loan funds is money that was borrowed at 11 per cent, money borrowed in foreign currency,” the prime minister said.

Expensive debts

Golding told journalists that engaging the multilaterals would give countries like Jamaica an opportunity to “retire some expensive debts with new loans that we would get at a cheaper cost”.

“That would ease the budget of an enormous weight that it has to be carrying now to service the debt,” Golding said.

Meanwhile, Jadgeo has said CARICOM states have agreed to approach Venezuela to discuss the impending changes to the PetroCaribe agreement.

According to Jadgeo, the change in the agreement now “will present grave difficulties for some of our member states”.

PetroCaribe is a Caribbean alliance with Venezuela to purchase oil on preferential terms. The payment system allows countries to buy oil at market value, but only a certain amount is needed up front. The remainder can be paid through a 25-year financing agreement at one per cent interest.

“We would like the impending changes altered or delayed and particularly over the period when we have some difficulties,” Jadgeo said.

 JAMAICANS WOULD want Barack Obama to succeed Queen Elizabeth II as the head of the Commonwealth, even though the United States is not a member of the association.

A commonwealth conversation survey - YouGov, conducted between June 29 and July 10 over the telephone by Hope Enterprises Ltd, among 500 Jamaicans, found that many Jamaicans were not only ignorant about the association but also viewed the organisation as irrelevant to national life.

Only 20 per cent of Jamaicans surveyed believed the Common-wealth to be of value to Jamaica.

The Commonwealth is an intergovernmental organisation of 53 independent member states, most of them formerly ruled by the British Empire.

While a significant portion of Jamaicans surveyed - 50 per cent - correctly identified the Queen as head of the Commonwealth, a vast chunk incorrectly placed Obama to the position.

Twenty-five per cent of those interviewed said Obama is the head of the Commonwealth while 17 per cent said they did not know who the head was.

Interestingly, 29 per cent of Jamaicans surveyed said they would want Obama to take over from the Queen as the head of the Common-wealth whenever her reign ends.

The heir to the British throne - Prince Charles - figured low on Jamaicans’ radar as only seven per cent believe that he should succeed the Queen as head of the Commonwealth.

Jamaica Gleaner

Daraine Luton, Senior Staff Reporter
Chavez

PRIME MINISTER Bruce Golding says he is confident Venezuela will be sympathetic to the cause of Caribbean nations and not alter the PetroCaribe Agreement in a way that would further hurt the region’s economies.

“What gives me some encouragement is that there seems to be a strong sense of goodwill and, therefore, I believe we will be able to work this one out,” Golding told journalists at a press conference at Jamaica House on Monday.

Jamaica had been preparing to host Venezuelan President Hugo Chavez for Independence Day celebrations and for discussions around a proposed new-look PetroCaribe agreement.

However, Chavez cancelled his visit following an injury sustained in a softball game Sunday.

Already, Golding has sent Energy and Mining Minister James Robertson off to Venezuela to meet with his energy counterpart as Jamaica attempts to secure the best possible deferred-payment oil agreement with Venezuela.

Robertson’s visit follows that of Dr Wesley Hughes, the director general of the Planning Institute of Jamaica.

Better understanding

Hughes led a team to Caracas and Golding said Jamaica now has a better understanding of the parameters being proposed by Venezuela.

The PetroCaribe is a Caribbean oil alliance with Venezuela to purchase oil on conditions of preferential payment. The alliance, which was launched in June 2005, allows the nations to buy oil at market value but only part of the price is needed upfront; the remainder can be paid through a 25-year financing agreement on one per cent interest.

However, Venezuela has indicated that they wish to change the agreement. The nature of the proposed changes has not been made public.

According to Golding, “Given the kind of difficulty that Venezuela is now facing, it is not difficult to understand why they would want to make some adjustment to those arrangements.”

CARICOM Chairman Bharrat Jagdeo said on Monday that the region “would like the impending changes altered or delayed and particularly over the period when we have some difficulties.”

Meanwhile, Golding said the Chavez government was aware of the difficulties a change to the agreement could have on the region.

“We had already indicated to the Venezuelan government that, while we understand the difficulties that may trigger a change in the PetroCaribe agreement, we have stressed to them the fact that not only our current Budget but our medium-term economic programme was predicated on the PetroCaribe agreement as it now exists and, therefore, any sudden change in that arrangement would have a signifi-cant effect on both our external as well as our fiscal accounts,” Golding said.

The prime minister has said that agreements such as the PetroCaribe initiative could further lead to the indebtedness of countries like Jamaica if care is not taken in the way deferred payment is handled.

“One of the concerns that cannot be overlooked is the fact that these very generous credit terms were increasing, at a significant level, the indebtedness of member countries.”

According to Golding, the discussions revolve around not putting “a huge weight of mortgage around the necks of the next generation because of the generosity of the Venezuelan government.”

Jamaica’s debt now stands at $1.2 trillion.