Moontown

MOON TOWN ENTERPRISES INC. IS LOCATED IN ST. LUCY, BARBADOS. THE CEO IS PARLIAMENTARY REPRESENTATIVE FOR      ST. LUCY, DENIS KELLMAN, WHO IS ALSO THE AMBASSADOR TO CARICOM AND CHIEF NEGOTIATOR.

SALT FISH AND RICE; MACARONI PIE

FRIED PLANTAIN; BBQ CHICKEN

BAKED PORK; GRILLED KING FISH

COU COU; FRIED POT FISH

TURKEY STEW; PLAIN GRAVY

STEAMED VEGETABLES; TOSSED SALAD

The smuggling of petrol from Venezuela to Colombia has long been profitable

“Cucuta is dead,” says Fernando, a Colombian textile trader who is planning to return to his home city of Medellin because work on the border with Venezuela has dried up.

“We bring in fabrics and jeans from Medellin to sell here and we’ve always done well out of it. But not any more. I’m taking my family back home where things are a bit better. Business here is over.”

It is a sentiment echoed by many members of the business community on the Colombian side of the border with Venezuela, who say a range of problems in recent months has hurt them.

Chief among them, they say, is the dispute between President Hugo Chavez of Venezuela and his Colombian counterpart, Alvaro Uribe, over a decision by Bogota to allow the United States to use seven military bases on Colombian soil.

The cane was cut and we got the export licence, but at that moment there was the dispute between the two presidents Eliodoro Viveros Sugar cane farmer

Recently President Uribe travelled to the region to hold talks with local business leaders and politicians to persuade them that his government had a plan in place to lessen the effects of a drop in trade with Venezuela.

It included reducing sales tax in Cucuta and improving road links to the rest of Colombia.

But not all the delegates were impressed. Liberal Party Senator Juan Fernando Cristo walked out of the meeting with Mr Uribe.

“President Uribe and the ministers and technocrats from Bogota don’t understand this situation,” he said as he left.

“They don’t understand this border region, nor the people, and they don’t understand how things work here. They come to Cucuta and talk about budgets and money and infrastructure and social investment. But they don’t really have the solutions.”

Losing out

Many of the products that Colombia exports to Venezuela are perishable, including milk, eggs, meat, rice and coffee.

After Venezuela moved to close the border, much of that produce went bad and had to be destroyed.

Local sugar cane producer Eliodoro Viveros took us down dirt roads in the small town of El Zulia to see one such damaged crop.

“The cane was cut and we got the export licence, but at that moment there was the dispute between the two presidents. Chavez shut the border and we lost all this,” he said, motioning to the piles of blackened and useless sugar cane in the field behind him.

“This has happened at least three times to members of our co-operative in the past few weeks.”

Mr Vivieros says that the crops represented thousands of dollars’ worth of profit for the farmers involved.

His co-operative is pinning its hopes on plans to build an ethanol plant in the region so that sugar cane producers are not so reliant on the Venezuelan market.

On the Venezuelan side of the frontier they are feeling the pinch too, but in different ways.

“Both countries are losing out,” said Alexis Balsa, border affairs commissioner for Tachira state in Venezuela.

“Colombia may be losing out a little more economically, but in Venezuela we’re experiencing food shortages because of all of this. President Chavez has decided to replace Colombia with Brazil or Argentina. That’s going to be very damaging for this frontier region because international trade here could be reduced to zero.”

There would be more job losses in the region too, he predicted.

Siphoned off

But while the legal trade of food, textiles, electrical goods and cars may be held up, illegal trade - especially in fuel - is thriving.

Smugglers fill up their tanks with cheap petrol in Venezuela, then drive over the border and siphon it off in Cucuta at huge profit.

Having paid a few cents a litre, they can sell it on for several dollars. An estimated 15,000 to 20,000 people make their living from the practice and there is a constant flow of vehicles, many of them taxi drivers, taking contraband fuel in one direction and contraband goods in the other.

Much of the trade is run by paramilitary and criminal gangs, but many are ordinary Venezuelans and Colombians making a quick dollar on the side.

Legal trade between the two nations was put at $7bn (£4.2bn) in 2008

Juan, who did not want to use his real name, is one such driver.

“I do this at least once a day,” he said, while heading towards Cucuta with a full tank.

On arrival in Colombia, he found a stall set up by the side of the road where he regularly sells his fuel.

A 20-year-old “pimpinero” - as those who siphon off fuel are known - takes the petrol from Juan’s car by sucking it out of the tank with his mouth and a hose, seemingly oblivious of any potential health risks.

The transaction is successful and Juan leaves with about $7-worth of Colombian pesos for what cost him about 50 US cents in Venezuela.

Recently, Venezuelan Energy Minister Rafael Ramirez announced that Venezuela would not be renewing an agreement on subsidised fuel with Colombia.

“We’re not prepared to subisidise the Colombian economy any longer,” he said.

That move has made the smuggling of fuel more popular and profitable than ever.

Border reality

The Venezuelan government has announced new measures to clamp down on smuggling, including using GPS to track large fuel tankers and forcing drivers to give up their petrol as they cross the border.

People living along the border hope tensions will soon die down

But few in Cucuta expect that the authorities will succeed in shutting down the illegal industry.

“This has always been a popular trade and it’s a good way to make money, but there are more and more people doing this since the argument between Chavez and Uribe,” Juan says.

“This is the reality on this border.”

It seems people on both sides of the border are concerned about the consequences, legal and illegal, of the argument between the two Latin American leaders.

“President Chavez and President Uribe are not going to be here for ever - or at least I hope not,” says Senator Cristo.

“But the people of this region are going to be here for always. We must have a very good relationship with Venezuela and a very good relationship with Ecuador in the south.

“Chavez and Uribe need to understand that if they have a personal fight, they must not involve the population along the border.”

Written By: Jason Sifflet

Security Minister Guy Mayers(center) says residency status would make things easier for some investors who frequent St Lucia.

International websites like Homeoverseas.com.uk are saying that St Lucia’s Parliament is currently changing immigration laws to give instant economic residency to foreign citizens investing US$350,000 or more in the island.

According to these sources, the St Lucian government wants to maximize the benefit of having increased airlift into the island by offering visitors the chance to become residents—for less than EC$1m. Homeoverseas.com, in particular, suggests that the government is trying to boost demand for property in St Lucia by offering foreign millionaires a second passport as well as a tax haven. This comes on the heels of changes to the tax regime which gives tax breaks to property owners who rent out their homes to visitors.

If this were true, it would make St Lucia one of only four countries in the world with an official, government-sanctioned program that exchanges residency/citizenship for economic investment. Despite widespread advertisement of second passports to many countries, only St Kitts/Nevis, Dominica and Austria have legal instant economic residency/citizenship programs. (Grenada and Belize have discontinued their second passport programs and Canada has something like an economic residency program for investors which can, after three years, lead to residency).

But home affairs minister Guy Mayers has told the STAR, “I don’t know anything about it. This is something that must be discussed in Cabinet before it goes to Parliament and to my knowledge it has not been discussed in Cabinet.”

The home affairs minister was not against the idea of offering investors the kinds of privileges usually reserved for citizens and residents. According to Mayers, “It is something that could be considered, especially since so many people are buying homes in St Lucia, right now.”

But several international scandals have tainted the integrity of second passport programs. St Kitts/Nevis has escaped without incident though they have the oldest second passport program in the world. But Dominica was once embroiled in an international debacle when Saudi dissident, Mohammad al-Massari, who promoted jihad from exile in England sought a Dominican passport in order to avoid extradition back to his homeland. In the wake of this (and a change of government), Grenada suspended its second passport program citing concerns about terrorism. Belize also had a legal second passport program which was terminated by the government after concerns about its integrity were raised.

A second passport program can be a valuable economic tool for a country. In St Kitts, there have reportedly been 600 families approved for second citizenship since 1991. At US$100,000 per family, that’s US$60m in the island’s treasury just at the point when the sugar industry was in its death throes. Individuals can also apply for a second passport. In St Kitts, this can be done either by contributing US$350,000 to a fund to help the island’s sugar economy to recover or by investing US$200,000-400,000, most likely, in real estate. In Dominica, an individual can get a second passport for US$75,000. None of these terms are inclusive of service and legal fees, which can run from US$5,000-35,000 per person. Applicants are not required to renounce their first citizenship, nor are they required to actually live in the island. In Austria, by the way, it takes a US$4m investment to get instant citizenship and dual citizenship is not allowed. Citizenship, in all three cases, is for life and cannot be revoked.

“One would have to look at it very closely,” Mayers told the STAR yesterday. “I would be averse to selling our patrimony. But from the point of view that some investors are in and out of the island, economic residency would make it easier for them, rather than going to the immigration department and standing on the line each time. From that point of view, I would be willing to consider it.”

There is evidence that population growth has effectively declined and fertility is now around replacement levels, while life expectancy is relatively high.

Director of the Latin America and Caribbean Regional Office Marcela Suazo recently made this disclosure while speaking at the International Conference on Population and Development (ICPD).

Suazo said issues such as migration and ageing have become among the most pressing population issues. “The Caribbean population is one of the most mobile in the world,” she stated.

While the region has traditionally seen a net out migration of skilled workers in search of better opportunities, leading to a “brain drain” effect, in some countries of the Caribbean, intra-regional migration has created tensions about the treatment of migrants.

According to Suazo, countries still require comprehensive laws, policies, and programme to address the various problems linked to migration.

She used a case involving the Convention on the protection of the rights of all migrant workers and members of their families, which has only been signed by three countries.

Suazo has insisted that special attention must be given to the situation of undocumented and illegal migrants as well as to measures against international trafficking for the purpose of sexual exploitation.

She said the population ageing has been a growing area of concern in the Caribbean in the last decades. “Although the increase in the share of the proportion of the elderly has been limited, the absolute number of older persons has steadily increased,” Suazo added.

She believes that as dependency ratios remain favourable and countries should take advantage of the opportunity to reap benefits of the demographic dividend before the balance between productive and other age groups tips.

Suazo further stated that the early onset of sexual initiation in the Caribbean is a matter of serious concern. Teenage pregnancies are becoming widespread while contraceptive prevalence remains low.

Early parenting remains at nearly 20 per cent of live births in the region, limiting development options for Caribbean teenage mothers.

The opposition Antigua Labour Party (ALP) will roll out another one of its public demonstrations against the government’s mismanagement of the country tomorrow morning in front of the Ministry of Finance, Consumer and Trade Office, which is located at the corner of Redcliffe and Corn Alley streets.

Deputy Leader of the ALP Gaston Browne said the party’s Mega Picket would begin at 8:30 a.m.

Browne told the AntiguaSun that members of the party, supporters and concerned residents would be picketing against the increase of LPG, the proposed engagement with the International Monetary Fund (IMF), the unemployment rate and the increased poverty level.

“We will also be demonstrating against the corruption of the UPP government to include the organised extortion of state resources through corrupt government contracting,” Browne added.

The ALP believes that the UPP is guilty of overspending and this is turning the country into a fiscal crisis.

“This will be the largest picket that will ever take place in the history of Antigua and after that, we will move to lock the country down using all legal, constitutional and democratic remedies available to us,” Browne added.

This is the third demonstration in three weeks for the party; they recently had a picket and a White March.

The United Progressive Party (UPP) said it would not be issuing a statement in reaction to any of the ALP’s demonstrations.

Avia Collinder, Business Reporter
A section of Caribbean Cement Company’s Rockfort plant is seen from the sea, May 2006. - File

In another victory for cement importers that also offers a mild concession to Caribbean Cement Company, Jamaica will retain the duty waiver for importers of the commodity but has reserved a larger portion of the market for the Rockfort-based monopoly producer.

Carib Cement was pressing to reclaim 100 per cent of the market, but Karl Samuda said Tuesday he would give them a secure 80 per cent, while importers would have the remaining 20 per cent, which becomes effective after September 9.

The decision has to be approved by Caricom before Jamaica can claim it a done deal.

The waiver, if approved, would extend the hold that Government first placed on the 15 per cent Common External Tariff on cement imports three years ago.

The importers’ share, however, has been cut by five per cent from 25 per cent under the 2008 waiver, which allowed them then to supply up to 240,000 tonnes to the local market.

The 20 per cent will allow 170,000 tonnes to enter duty free.

Samuda did not say if the application has already been sent to Caricom’s Georgetown headquarters or its Council for Trade and Economic Development.

“The ministry has made the decision to apply for suspension of the tariff on cement to the tune of 170,000 tons over the next year,” he said.

Earlier this year, Carib Cement’s parent company, Trinidad Cement, took the issue to the Caribbean Court of Justice, the arbiter for Caricom trade disputes, seeking to overturn Caricom’s decision to approve last year’s tariff waiver request.

The TCL bid was unsuccessful, but its local subsidiary has continued to mount strong opposition to the move, citing what it said are the harmful effects of the import liberalisation it has blamed for declining sales and loss of market share.

The government has said the 170,000 tonnes represent 20 per cent of the market effectively confining Caribbean Cement to 80 per cent of the market.

The cement maker last claimed 82 per cent of the market in the April to June quarter, down, it said, from 85 per cent in the first quarter ending March.

Months of lobbying

Samuda’s decision to extend the waiver follows months of lobbying on one side from Carib Cement and on the other cement importer Tank-Weld and hardware merchants and building contractors.

The Jamaica Manufacturers’ Association sided mostly with importers though the different sides have membership in the organisation, leading at one time to a threat by Carib Cement to pull from the JMA.

The cement maker launched an aggressive lobby to reclaim control of the market, saying it needed the revenue to pay for the US$177-million investment in boosted capacity to 1.8 million tonnes that is just now being wrapped up.

A resolute Samuda voiced the Government’s view that Carib Cement’s lack of adequate storage capacity for the product which is vital to the country’s construction industry created a risk, he said, the state was unprepared to take.

“Taking all factors into consideration, we feel at this stage that there is not sufficient storage capacity to ensure that the construction industry is never short at a time when we are seeking to expand infrastructure,” the minister said.

“We cannot be in a position like that which that left us with shortages like a year and a half ago. We have to think of inventory levels. The cement company only has a capacity to store two weeks’ supply of the product. It takes three weeks to one month to get cement to Jamaica and so, in the event of a plant breakdown, it would put us at risk. I can’t as a minister be faced with that possibility and not take appropriate steps.”

With the total cement needs of the industry estimated to be 850,000 tonnes, Samuda urged the company to use the period of the contemplated extension to boost its storage capacity.

“We will apply the relief to 20 per cent of local needs for one year. This will give Carib Cement enough time to expand its storage capacity and adequately supply demand. It will also give them some form of competition at a time when cost containment in the construction industry is absolutely critical,” said the minister, who also has responsibility for investment and commerce.

Bad move

But in an immediate response, the cement company has rubbished the Government’s claim of the company’s storage deficit, maintaining that the decision is a bad move.

“Our total storage capacity is 41,000 tonnes. Any emergency that we have would be a natural disaster and our storage is located strategically in several places across the island. We really do not believe that there is anything that could put us out of commission for an entire month, CCC spokesperson Alice Hyde told Wednesday Business.

“We have an unfairly traded product coming in which they are not paying duties on,” she contended.

Asserting that the import-tariff relief would continue to affect her company negatively, the CCC marketing manager held to the company line that Carib Cement can meet national demand in full and without problems.

“We can definitely meet local demand,” she reiterated, pointing to the Rockfort, Kingston, plant expansion and capacity upgrade to between 1.8 million and two million tonnes.

Meanwhile, the company’s profits are down as construction GDP contracts and the cement market retreats.

Carib Cement blames the erosion of profits on the competition from imports.

Only last week, the company informed some 80 workers that their monthly salaries would not be paid by August 25 because of cash-flow problems that it attributed to “sustained contraction in the economy and its impact on sales”.

Public-sector workers are to begin receiving increased fringe benefits in their September salaries.Minister of State in the Ministry of Finance and the Public Service, Arthur Williams, yesterday told the Jamaica Confederation of Trade Unions (JCTU) that effective next month, the Government will begin paying the new rates for benefits to all public-sector groups with signed heads of agreement.

However, Williams, told the JCTU that the arrears for the period April 1, 2008 to August 30, 2009 would not be paid in this financial year.

According to Williams, the Government will make every effort to settle the arrears in the first quarter of the 2010-2011 financial year.

SALT FISH AND RICE; MACARONI PIE

FRIED PLANTAIN; GRILLED KING FISH

FRIED POT FISH; BAKED PORK

BBQ CHICKEN; COU COU

TURKEY STEW; PLAIN GRAVY

STEAMED VEGETABLES; TOSSED SALAD