Moontown

 
Photo: Annette Beckett

It’s time to cut the talk and get involved. The only way that consumers will get their rights is for consumers themselves to get up and to do something about it. This is the message on the membership form of the Check it out: Barbados Consumers’ Watch being circulated, seeking membership.

Do you think that we need a strong consumer body? The form queries. “What do you think a consumer organisation can do for you and the consumers of Barbados?” it continues.

The driving force behind the new organisation is none other than Ms. Annette Beckett, former President of the Barbados Netball Association,  and the first female Bajan to sit as a Director on an International sporting Federation. She also has some knowledge of consumerism .

There is no doubt that Barbados does need a strong consumer organisation, but it can only happen if you the consumers answer the call to come together. We sincerely hope that you come out and support Annette with this effort.

This effort is being supported by BANGO because of its attempt to attract mass membership. This is an opportunity to create an organisation to support you the consumer and to keep you informed with new information and also to build an archive of standards which could be accessed by members.

This effort is so necessary at a time when global economic arrangements include free trade. This means that Government can no longer  easily   impose such mechanisms as price controls and it is now up to the consumer to take guard in order to enjoy   some  level of consumerism .

It is now for consumers to monitor such things as quality and safety. We need to be linked to such agencies as the FDA and hundreds of standards bodies across the globe as well as to our own BNSI. This has nothing to do with studying legislation and interpreting the limits of the legislation as well as intervening into public hearings or even going to the consumer Claims Tribunal. This new organisation promises this level of consumer services.

The Organisation already has a blog site where consumers can find relevant information and at the same time watch Consumer TV bringing the latest consumer news, features, documentaries, hearings and lectures.

You may download a copy of the Membership Form  from the Barbados Consumers’ Watch blog . Complete and return form to any of the listed emails.

Huntley Medley, Contributing Editor - Business

National Commercial bank has made most loans under the IDB credit scheme.

Commercial banks are reporting mixed results in their efforts to channel to clients the 80 per cent of the US$300 million (J$26.7 billion) in credit government received from the Inter-American Development Bank (IDB) in January for on-lending to local industry.

Originally, all the money was intended for the private sector, but the finance ministry confirmed last week that it had recieved approval from the IDB to allow public-sector entities to access 20 per cent of the cash, once they do not require central government guarantees.

open to all commercial banks

Only four financial houses - National Commercial Bank (NCB), First Global Bank, Pan Caribbean Financial Services and the Export Import (EXIM) Bank - have taken up any of the funds, which are being administered by the Development Bank of Jamaica (DBJ), but which finance ministry official, Pamella McLaren, said are open to all commercial banks and the EXIM Bank.

“The banks borrow the funds at a variable rate determined by the six-month US dollar Libor, reset semi-annually each year on the 15th of February and 15th of August, plus 450 basis points per annum,” McLaren, who is the senior director for debt management told Sunday Business.

Currently, the rate to the banks is 5.58 per cent, McLaren, who was inadvertently, incorrectly named in the Financial Gleaner story, said.

The banks determine the on-lending rate to its client and there is no cap on the rate they charge.

First Global says its lends the IDB funds at 10 per cent and 11 per cent and got the funds at a seven per cent variable rate from the DBJ. Other banks declined to say what they were lending at.

The finance ministry has said US$89.7 million, or approximately J$8 billion, has already been loaned, with 71 per cent going to the private sector and the balance taken up by government companies, which have not been named.

70 projects

By the finance ministry’s count, 70 projects have already been funded from the IDB cash, with 24 or 34 per cent of them being in manufacturing. The services sector was next, with 13 projects, followed by tourism with 10, agroprecessing - nine, distribution - seven, four projects in construction, two in the energy field, and one in mining.

Even as the government rolls out these numbers, some in the banking sector point to problems in the structuring of the loan facility that make it unattractive to many enterprises it was meant to help. One banking source, who declined to be named, said the funds have not been the cheapest of similar multilateral loans, being about two per cent more expensive than normal.

NCB has already disbursed to borrowers US$43.93 million from the facility, which it accesses based on client demand. The bank says it expects a further drawdown of US$4 million this month.

Meanwhile, one-year-old Pan Caribbean Bank, the commercial banking arm of Pan Caribbean Financial Services group, has reported that with a late start to its participation in the facility, only US$3.5 million of the funds has so far been lent to its clients.

aggressive stance

A total of nine firms involved in tourism, energy, distribution, transport and construction have received loans from the IDB facility through NCB. The three tourism projects, at US$22.78 million, account for the bulk of the disbursements, with US$10 million going to one transport business; US$9 million allocated to two energy companies; US$1.6 million going to two entities in construction; and, US$500,000 lent to a distribution concern.

The high take-up of the funds through NCB reflects the bank’s aggressive loan stance with the Bank of Jamaica March 2009 commercial banking industry review showing NCB with the bulk of net loans. In its nine months to June, the bank, with the largest branch network in Jamaica, grew commercial loans by 38 per cent over the same period in 2008. During the nine months, NCB earned $9.8 billion in interest income from loans, nearly 33 per cent more than the same period last year.

Comparatively, Pan Caribbean pulled in $531.9 million in interest income from loans for the first six months of 2009, 39 per cent more than in the same period in 2008.

First Global says it has lent US$23 million to 10 corporate clients seeking working capital for distribution companies, manufacturing retooling and hotel refurbishing.

foreign-exchange exposure

In information posted to its website, the EXIM Bank says it has accessed US$18 million from the IDB pool of funds.

“EXIM Bank Jamaica assists potential borrowers to manage their foreign-exchange exposure by ensuring that hard currency funds are lent only to those businesses that earn hard currency. As such, loans will be disbursed in United States dollars (USD) and borrowers must prepare to repay the loan, in full, in USD only,” the bank said.

But with a still uncertain foreign-exchange situation, at least one bank says many of its clients are shying away from US-dollar-denominated loans.

“With the currency risks involved and revenues of many companies affected by the economic downturn, many clients are more interested in Jamaican dollar loans,” a Pan Caribbean representative, who requested anonymity, said.

special facilities

Based on the nature of the bulk of its private sector loan demand, Pan Caribbean, which says it matches client needs with available loans rather than marketing specific programmes, has been directing most borrowers to DBJ and EXIM Bank’s small and medium enterprise special-loan facilities, rather than towards the IDB funds

Despite the bank official being optimistic that demand for the IDB funds will improve over time, the relatively low demand through Pan Caribbean is also symptomatic of concerns over the structure of the loans and their still relatively high interest rate.

The funds are wholesaled to the lending institutions at “seven per cent or a little below” one bank representative said.

“There are also fees attached, which are not always recoverable from the client and so have to be included in the pricing of the funds, which results in this facility not being competitive against other loan products,” said the Pan Caribbean executive.

Import restrictions connected to this line of credit require that raw material and supplies purchases be made only from IDB member countries.

Other eligibility criteria mandate that businesses must be at least 66.6 per cent Jamaican owned, borrowers must be in compliance with environmental law and have the necessary environmental and other permits to operate.

JohnsonJamaican ambassador to the United States (US) Anthony Johnson, speaking to guests at his residence recently, outlined the economic problems faced by small Caribbean states and suggested that closer collaboration in the business area was one of the major solutions.

The occasion was a lively reception to celebrate American-sponsored community development projects in Bluefields. The English-Speaking Union of Washington, using monies from the Gunst Foundation, funds a free hot lunch programme for Bluefields Basic School. Additionally, Bluefields Bay Villas (Westmoreland), a small luxury resort, takes money from each guest’s fees for other good works in the area.

show of appreciation

Ambassador Johnson told his 100 guests, mostly English-Speaking Union members or tourists who had stayed at Bluefields Bay Villas, how much Jamaica appreciated their generosity and how important their contribution was to the betterment of the country. Guests imbibed Jamaican rum punch, served as tropical frozen drinks, and enjoyed Jamaican smoked marlin, ackee and salt fish, callaloo and salt fish, jerked chicken wings and more.

The event was funded by sponsors Deborah and Braxton Moncure, owners of Bluefields Bay Villas and long-time supporters of Jamaican tourism. The ambassador thanked the Moncure family for its investment in Bluefields and for its charitable contributions. He noted that three hurricanes in the last five years as well as the current recession had caused major financial problems in Jamaica, but assured his listeners that the Government had programmes that could solve them.

Guests also viewed photographs and heard the recent achievements of the Bluefields Bay Villas community fund. This fund covers shortfalls in teacher salaries and other needs of Bluefields Basic School, pays for an anti-litter campaign to keep Bluefields Bay beautiful, recently completed an architect-designed community skip to finally provide Belmont residents with a place to dispose of their trash, and is now building modern bathrooms for the Mearnsville All-Age School. The school has had only pit latrines with no sinks for its more than 200 students. Expertise in building a proper septic pit and tiled drain field for this project came from Peace Corps volunteers Scott and Carrie Eklund, both trained engineers.

heart-warming

Deborah Moncure, an architect as well as a hotelier, designed these community projects on a pro bono basis. “I really look forward,” she said, “to the completion and opening of these modern school bathrooms in a few more months. And I find it heart-warming to learn that a government official is considering using my community skip design as a prototype in other areas.” The younger generation of Moncures, Houston and Rachel, were born in Jamaica, have held Jamaican passports since birth, and are involved in Bluefields Bay Villas and its local good works too.

As the People’s National Party (PNP) contemplates its next steps, its only surviving former president, P.J. Patterson, has stressed the need to rebuild and repackage the 71-year-old party

“This is a time when we are not at the helm of leading the affairs of the country, but we must not lose our faith and we must not lose our purpose. It is, instead, a time for renewal of our energy and of our purpose,” Patterson said.

He was speaking Friday at the first day of the party’s annual conference at its Old Hope Road headquarters.

Patterson added: “This is a time for rebuilding the national alliance which Norman Manley established in 1938. It is a time for the bakers, the cooks, the businessmen, the farmers … the musicians … the carpenters … . It is time for the People’s National Party to rebuild that great indivisible and unconquerable alliance.”

recruiting new members

Patterson suggested ways the party could go about recruiting new members. He said that each member should make it his or her daily task to recruit a new member.

“I am struck, as I move around quietly, by the people who are asking, what can we do to help our party?” Patterson said. “I am saying to each of you, make it a mission, make it a task. Each day, recruit one person to membership and get that one person to recruit another. Let it be like a chain letter, and if you do that, believe you me, with all the attempts to destroy and distort, you will return.”

President of the PNP, Portia Simpson Miller, wants to put Jamaica under the umbrella of the party’s Progressive Agenda.

“No matter the opposition and cynicism about the Progressive Agenda, no matter what, we will succeed … . We will not be deterred from our mission. We must stay this course together. What we need, now more than ever, is all hands on deck,” Simpson Miller said on Friday .

The annual conference continued yesterday with a business session and will culminate with a public session at the National Arena today.

With bids already in on the majority of the immovable properties of Clico (Guyana), the High Court will soon consider whether to wind up the company as repeatedly argued by the Judicial Manager, and or allow some lines of business to continue in keeping with submissions made on behalf of the troubled insurance company.

Chief Justice (ag) Ian Chang called on the attorneys appearing in the matter to make final submissions on Friday when the hearing continued, and in a brief address Senior Counsel Ashton Chase, representing the judicial manager, argued that Clico is effectively crippled without the US$43M invested in the Bahamas, while adding that his side would be willing to start a dialogue about the company continuing to do business should the funds reappear.  “The investment in the Bahamas was unauthorized because no permission was given by the Commissioner of Insurance, the instructions came from Trinidad, but if they can say that the money is coming back then we can have a dialogue,” Chase said on Friday. He identified the Bahamas investment as the key issue, ranking above all other matters affecting Clico.

But Clico’s lead attorney Roysdale Forde maintained that the company is still solid as evidenced by its existing statutory fund. He again mentioned that former Judicial Manager Maria van Beek failed to reflect a true financial position of the company. Forde was unable to conclude his arguments due to time and will conclude on Monday when the hearing resumes.

Prior to his submissions, Forde argued strongly that the Bank of Guyana (BoG) could not lawfully take over the role of Judicial Manager and dismissed the recent Act of Parliament which made the change as merely transferring the powers, but lacking the authority to do so. He said that the court is the sole place empowered to appoint a Judicial Manager not Parliament. In reply, Chase noted Parliament is supreme and that it has the authority to pass title onto the bank. However, Justice Chang said he was interested in the final submissions rather arguments about the Judicial Manager.

In its capacity as Clico’s existing Judicial Manager, the BoG has added its voice to calls for the company to be liquidated, saying that since assuming the new role it has checked the relevant statements and reports of its predecessor and has concluded that they are true reflections of the financial state of the company. The bank also examined the financial statements prepared by Nizam Ali & Company as well as the relevant records and asserted that they are substantially correct. “Further the Bank is satisfied that the Company has committed breaches of the Insurance Act No. 20 of 1998. These are serious offences particularly against section 55 of the said Act. The investment of the company in the Bahamas of approximately US$43M is a major reason for the company’s inability to meet its commitments. This was a major breach of the aforesaid Act unauthorized as it was by the Insurance Commissioner…,” the bank said in an affidavit filed in the High Court recently.

BoG, which took over Judicial Management of the company in July, said it is a paradox that the same Directors who were responsible for the dilemma in which policyholders are now placed, “should be now belatedly considering their interests.”  It referred to statements filed in the High Court by Clico as largely personal attacks, adding that it holds to the position there is no proper entry of appearance by the company.

Not viable

The bank said the lines of business of Clico were not financially viable, which it said was an indication the company was paying out more money in claims than it was receiving in premiums.  As a result, it said the cost of reinsuring the said general lines of business far exceeded the actual value of the policies and that in the circumstances a refund of unearned premium income was made to policy-holders and proved more economical. “That notwithstanding the foregoing the magnitude of the investment by the company in the Bahamas and the general breaches by it of the Act, it is not recommended nor it is possible for the company business to be compartmentalized and some aspect still be pursued. It is in the greater interest of equality of justice to all that the consequences of the general insolvency should be pursued,” it stated.

Further, the bank said the bulk of the company’s business was long term insurance policies (Executive Flexible Premium Annuities and Flexible Premium Annuities) which it said are impaired by virtue of the heavy loss suffered and to be suffered by the company through its investment in the Bahamas and hence contributing to the company’s insolvency. It dismissed the assertion by Clico that it has much liquid cash saying that after operational expenses the total bank balance is around $2.7M dollars. It said too that Clico’s present view of the contracts/policies made with the National Insurance Board and other named bodies differ from the understanding and expectation of the bodies.

Substantial losses

But in an affidavit in answer to the petition to wind up the company, Clico said the present contention and controversy is in relation only to the long term insurance business of the company, adding that it also engages in the General Insurance, fire and auto insurance business. The company argued that the general insurance and auto insurance business have its separate statutory funds which are not under any peril or in question and as such those classes of insurance business ought to be removed from under the Management of the Judicial Manager. It argued that the effect of placing the entire company under judicial management has caused Clico substantial financial loss, since in those areas of business the existing policies cannot be reviewed or continued.

Clico urged the court to consider with great caution the final recommendation of the judicial manager and again charged that Maria van Beek never managed or attempted to carry out any part or portion of the business. It accused van Beek of concealing substantial and material facts which it said should have been produced in court.  The company said that the policies relied on by judicial manager to establish a deficiency of the statutory funds do not constitute policies within the meaning of the Insurance Act.

Bids tendered

Following an unsuccessful High Court challenge by Clico to stop the sale of several of its immovable properties, the buildings went on the market and bids were recently tendered. In an affidavit filed in the High Court on Wednesday, Assistant Director of Insurance Supervision of the Bank of Guyana, Tracy Gibson reported that tenders were received on all of the properties save one.

Clico’s yet to be completed modern office block at 200-201 Camp Street received a highest bid of G$500M.  Other properties at Lamaha Street; Lamaha Gardens; Queenstown; Camp Street and Essequibo received highest bids ranging from G$38M to G$65M.  No bids were tendered for a property at New Amsterdam.

Clico had challenged the valuation of the properties which were conducted by the Ministry of Finance saying that the value of the properties was seriously understated. The company then hired Valuations Systems Specialist Hugo Curtis, who detailed what he said was appropriate valuations of the properties in an affidavit filed in the High Court. The difference between the Ministry’s valuation and Curtis’ was significant.

PEAS AND RICE; MACARONI PIE

CORN MEAL COU COU; FISH PELAU

STEAMED PUDDING; STEAMED VEGETABLES

GRILLED MARLIN; FRIED MARLIN

FRIED SNAPPER; BBQ CHICKEN

BBQ SPARERIBS; BBQ PIG TAIL

PLAIN GRAVY; TURKEY STEW

TOSSED SALAD; COLE SLAW

Guyana has received the promised $3billion (US$15 million) from the regional Petroleum Fund, which is to be used to assist Clico (Guyana) to meet its liabilities, President Bharrat Jagdeo announced on Friday.

In April, during the 5th Summit of the Americas held in Trinidad and Tobago, President Jagdeo had lobbied with other Caricom Heads for Guyana to receive the additional funds. In an interview following his return from the Summit, Jagdeo stated “before I left Guyana, I said at the press conference that they were putting US$50 million from the petroleum fund into a special facility to deal with the OECS (Organisation of Eastern Caribbean States) countries that had problems with British American (Insurance Company), because they have some issues which are related to the CL Financial Group. I said, I thought it’s unfair…this is a regional problem and requires a regional solution…I argued for an additional US$15 million to come from that fund and to come from Guyana to assist with Clico.”

In April, Judicial Manager of Clico (Guyana) declared that in a worst case scenario, the company’s liabilities will exceed its assets by $11.9 billion. However, President Jagdeo at a subsequent press conference emphasized that this was only a worst case scenario. He expressed optimism that Guyana would regain some of its money.  This comment came after several promises made by Jagdeo that no investor in the company will lose money.

Meanwhile, on Friday at State House Jagdeo told reporters that the government, through its legal team, continues to monitor the court case in Bahamas. He further stated that at the local level, the government is waiting on the Chief Justice is to rule on the liquidation of the company.

The injection of the US $15 million from the petroleum fund is expected to significantly reduce the gap between the liabilities and assets. This interjection, along with other interventions could see the gap being completely eliminated, thereby negating the need to use taxpayers’ money.

Clico (Guyana) invested $ 6.9 billion in Clico (Bahamas) which represented 53 percent of the local companies’ assets. Although these investments were liquid on paper, subsequent investigations revealed that this sum has been tied up in real estate investments that CLICO (Bahamas) had in Florida through subsidiaries. When CLICO (Bahamas) was ordered liquidated on February 24, the local company was subsequently placed under judicial management.

Central government and the city council yesterday brokered a deal to end Georgetown’s garbage crisis, and contractors are expected to resume garbage collection tomorrow, Finance Minister Dr Ashni Singh said yesterday.

Dr Ashni Singh

Singh said the administration has agreed to make an immediate release of $41M to the council and City
Hall is expected to augment the figure with an additional $5M to cover some two months of arrears to garbage contractors who had pulled their services three weeks ago. One month of arrears now remain outstanding.

The Finance Minister, who spoke after government met with mostly technical officers within City Hall, said the point was emphatically made that efforts must be intensified when collection resumes for a significant reduction in the garbage overflow. He explained this might require the use of existing resources within the council including lorries and trucks.

Coming out of the talks yesterday government intends to continue engaging City Hall on the issue, Singh said, but he pointed out any future discussions will address the issue of financial regulation at the council because of what the records currently show. Though they focused on the pressing issue of the garbage crisis, he said council’s financial situation came up, particularly its expenditure profile which was briefly examined.

Deputy Mayor Robert Williams was absent from the meeting though the President had indicated earlier he was invited, and when contacted yesterday he declined to comment on his non-appearance. However, President Bharrat Jagdeo had declared that Mayor Hamilton Greene was not invited to the meeting saying “He is from a different era and clearly I’m not working with him.”

According to the Finance Minister City Hall records reflect a shortfall in revenue collection due to its inability to collect rates and taxes from a large number of ratepayers. He deemed this a serious issue because the rates to go the bulk of services offered at City Hall. He said the records as publicly disclosed yesterday point to government being up-to-date with its payments, while there are many defaulters in the system. But there is also a serious problem of an imbalance in the council’s expenditure profile, Singh said.

He said what the records perused yesterday showed is that funds are spent at City Hall on activities which do not result in services which benefit citizens, noting that too much is spent on administration. Singh stated that City Hall’s expenditure needs to be examined and re-oriented. Further, he said the officials at the Ministry of Local Government plans to meet with officials from the council this week on a way forward for the council.

The garbage crisis began just about three weeks ago when garbage collectors withdrew their services after not receiving payment from City Hall; the outstanding sum had ballooned to $75M dollars. Since then garbage has piled up in the city, with much of it being dumped indiscriminately at street corners. In other instances, residents have paid to have it removed.

Meanwhile Opposition Leader, Robert Corbin referred to the President’s call for the establishment of an Interim Management Committee in Georgetown as a tactic to change the focus of the present political debate of the “criminality” of his administration. He called an IMC in Georgetown a non-issue, from his party’s perspective, saying the matter surfaced some years ago. According to him, Jagdeo was seeking then to exert political control of Georgetown to achieve political advantages ahead of local government elections.

“The PNCR expressed its total opposition to such an initiative and urged the completion of Local Government Reform and the early holding of Local Government Elections. It is therefore mind boggling that President Jagdeo, who recently attacked the Chairman of the Elections Commission for delaying the Local Government Poll, should now even be entertaining the thought of an IMC in Georgetown when he should be working to ensure the early holding of Local Government Elections,” Corbin wrote in a response last night.

He said the PNCR position and that of its leader are unambiguous, which is that local government elections under the reformed local government system is the priority. Corbin noted that his party would not, therefore, entertain any intermediate steps. Additionally, he said the problems being experienced by the City Hall are clear manifestations of the obsolete system of local democracy, which he said government seems reluctant to change. “In simple language neither the Leader of the Opposition nor the PNCR would agree to the establishment of any IMC in Georgetown,” he added.

by BARRY ALLEYNE

COME CLEAN, MR PRIME MINISTER!

Tell Barbadians what you plan to do!

That was the cry from Opposition Leader Mia Mottley yesterday, as she urged the island’s leader to tell the true story regarding a number of recommendations made by the International Monetary Fund (IMF) earlier this month to save Barbados from economic disaster.

Mottley said that Thompson’s recent statement “been there, done that” about taking stock of an IMF report was way too vague, and the public deserved better.

‘No details’

“Enough is enough. I don’t think the issues were handled appropriately. It is clear the Barbados economy is on a knife’s edge.

“If we slip, we will slide,” she told a Press conference at the Opposition’s headquarters in Parliament.

Mottley said the economic situation was so dire, even a hurricane could place it on the precipice of complete collapse, yet the Prime Minister had brought no details whatsoever to the people regarding how his Government would stem the tide in the midst of a worldwide economic recession.

“The precarious nature of where we stand today must be a concern to all Barbadians,” she said.

Mottley said unemployment continues to rise, and the Barbados Labour Party totally rejected the Prime Minister’s claim that unemployment had fallen in the second quarter this year.

“What is of more concern is that if you look at the numbers of persons employed in Barbados, we have lost 4 200 jobs as compared to last year,” she claimed.

The MP for St Michael North East noted that there had been a $691 million dollar drop in foreign investment, and it was time for the Prime Minister to tell Barbadians the real story regarding how bad the economy was, and what exactly he planned to do about it.