Moontown

ALICIA ROACHE Business reporter roachea@jamaicaobserver.com

EVEN as the Bank of Jamaica (BOJ) has reduced the reserve requirements for commercial banks, a new kind of banking fee is making customers pay for having too little money in their accounts.

The two largest commercial banks in Jamaica by branch network charge depositors a fee for balances below a certain amount. Scotiabank charges $150 per month for balances below $5,000, while the National Commercial Bank (NCB) charges $50 per month for balances below $2,000. Estimates are that up to 60 per cent of the deposits in commercial banks are below $5,000.

The BOJ made effective July 1 this year a reduction in the reserve requirements for deposit — taking institutions such as commercial banks and building societies. The reduced requirements which is two percentage points from 14 per cent to 12 per cent, applies to Jamaican-dollar deposits. Cash reserve requirements for foreign currency deposits were already reduced in March to nine per cent of clients’ deposits.

This means that the institution will have to reserve less of the total amount of depositor’s money to meet the requirements of the BOJ. In other words, if total depositors’ fund equal $100 million, the institution is now required to have on hand just 12 per cent or $12 million of the total, not the 14 per cent or $14 million that was previously required.

“These adjustments form part of the general easing of monetary policy that is consistent with the improved outlook for inflation and the relatively weak demand conditions in the economy,” the BOJ reports in a release.

However, while the BOJ has signalled an easing of monetary policy with the move, the commercial banks have instituted the new measures to encourage individuals keep your money in the bank.

Sushil Jain, financial analyst, argues that despite the recession which has led to job losses and reduced earnings it is in the interest of the financial institutions to continue to maintain a minimum balance and cover operational costs, by charging a fee for the small balances.

“I think that is fair. In my view that is not unfair. In order to keep their business they have to keep some records and have other operational costs. $2,000 is nothing. I think that’s fair enough,” Jain said. “That means those people really don’t need a bank account. If I have $2,000 I can keep it under my pillow,” Jain said.

He said the real problem with bank fees is that there are too many. “They have fees for too many things. Everything is a fee.” “What happens is that the whole corporate sector has gone astray, nobody questions them,” Jain said.

Jain believes that the central bank should establish a commission to oversee the fees charged by the commercial banks, much like what has been done in Barbados to monitor the fees charged to customers.(Jamaica Observer)

By Rory Butler

Principal of Baptist Academy Hensworth Jonas has pointed to a focus on Christian education as the key to the success of the school.

The capture of the top student prize by Syreba Cornelius of Baptist Academy means that the school has had five top students in the past eight years.

Jonas said the school’s discipline and Christian values translate to academic success.

“This came about because we continued to apply our curriculum discipline along with holistic approach to Christian education,” Pastor Jonas said.

“Our Christianity saturates our entire programme and we do believe this has an impact on our academic performance,” the principal said.

Jonas said there are a number of factors that need to change to improve the overall performance at the Common Entrance Exams.

“What needs to happen are several things: of course curriculum, discipline, and teachers need to have more contact time with their children. There needs to be a synergy established between parents and the teachers. It needs to be understood that parents are the primary educators and the school is assisting them,” the principal said.

All 22 students of Baptist Academy who sat the exam passed, while 14 made the list of top 100 positions. (Antigua Observer)

Caribbean Airlines Limited (CAL) has rights to the Air Jamaica name for one year, but the licensing agreement struck with the Bruce Golding administration also gives the carrier option to renew the arrangement annually.

The cost to CAL: US$5, the finance ministry said last week.

The essential provisions of that agreement are that Caribbean Airlines has the right to use - for an initial 12-month period - those trademarks which are listed in attachments to the agreement. At the end of the initial 12-month period, the right to continue using them is automatically renewed every year at a royalty amount of US$5 per year” said Finance Minister Audley Shaw in a statement responding to a Gleaner editorial asking for clarity on the CAL-Air Jamaica deal.

“It is important to note, however, that the trademarks which Caribbean Airlines may use are restricted to those listed in the licence agreement.”

Not all trademarks

The agreement covers the major trademarks, but not all, he said.

The agreement is nullified if Caribbean Airlines becomes bankrupt; assigns or attempts to assign the rights to some other entity; or the Government of Trinidad and Tobago’s stake in CAL falls below 50.1 per cent.

The agreement may also be terminated if Caribbean Airlines does not use the trademarks for a six-month span.

“Importantly, too, the trademarks can only be used in connection with the airline’s Jamaican operations relating to routes and frequency, fleet and crew - although Caribbean Airlines may make such changes or variations to the routes and frequency and/or to the fleet and crew stipulations as the airline believes are appropriate in order to achieve maximum profitability and the ultimate success of the Jamaican operations,” Shaw said. (Jamaica Gleaner)

business@gleanerjm.com

Caribbean Cement Company has admitted to selling export cement at cheaper prices than it does in its home market, but insists that the practice does not amount to dumping, as defined under international trade rules.

The admission comes as Caribbean Cement continues to pursue importers here, and their suppliers, for selling at prices that it considers harmful to the industry it dominates.

The company, however, said its pricing policy is a deliberate strategy aimed at holding market share overseas.

“Carib Cement is confirming that its export price is below its local market price,” public relations officer Lystra Sharp said in response to Wednesday Business queries.

“This is so in order to maintain competitiveness in the export market,” she said. “This simply means that products must be priced in line with similar products in the export market in order to be competitive.”

Sharp argued that Caribbean Cement’s practice does not amount to ‘dumping’, since that determination rests on whether “there is injury or the threat of injury to a domestic industry”.

“This means that when we export to markets which do not have local manufacturing capabilities and our export price is below that of our local price, this does not constitute dumping.”

She argued that the pricing strategy must be predatory - that is, used to drive down the profits of local manufacturers and drive them from the market - to be labelled dumping.

The World Trade Organization defines dumping as having occurred where “a company exports a product at a price lower than the price it normally charged in its own home market”, but says governments are allowed to act in protection of local operations only where there is genuine or material injury to the competing domestic industry.

Caribbean Cement’s sales office quoted the ex-factory price of Carib Cement Plus at J$585 per bag on Tuesday.

The company, however, has not responded to queries on the financial performance of its exports.

Its overseas markets include Montserrat, St Kitts, Belize, St Maarten, Guyana, Turks and Caicos, Cayman Islands and Dominican Republic. The latter is a cement producer.

Caribbean Cement also sells clinker to places like Haiti and Suriname.

Just last week, the Rockfort, Kingston, operation scored a victory in the high court which ruled that Industry Minister Karl Samuda must explain why he has chosen not to impose anti-dumping penalties - recommended six years ago by the Anti-Dumping and Subsidies Commission - on cement coming out of China.

The Jamaican Government is wary of one company having full control of the domestic-supply market, and Samuda continues to lobby for the suspension of duties to allow importers access.

In July, Caribbean Cement failed to convince the commission that Vulcan cement out of Alabama, United States, was harmful to the manufacturing of cement here, though the watchdog did find a 59.72 per cent margin of dumping in volumes that were “not negligible”. (Jamaica Gleaner)

mark.titus@gleanerjm.com

A policeman at the scene of an accident at the intersection of North and East streets earlier this month. - Gladstone Taylor/Photographer

Nadisha Hunter, Gleaner Writer

Even as the number of road fatalities continues to trend down, the National Road Safety Unit is making a passionate plea for persons to be more obedient to the seat-belt law as the failure to buckle up has resulted in approximately half of road accidents being fatal.

Kenute Hare, director of the road safety unit in the Ministry of Transport & Works, said if more people used their seat belts, it would profoundly reduce the degree of injury in many cases.

“Approximately half of the passengers killed do not wear seat belts and majority of them were seated on the back seat and not strapped down,” Hare said.

“I am calling on the drivers, both private and public, to ensure that passengers are attired in their seat belts and they should not only do it because they see the police, but it saves life. Once you attire in it, it will reduce the level of injury in case of an accident,” he added.

Fewer fatalities

To date, there have been 147 fatalities on the roadways, 27 per cent fewer than the figures recorded over the same period last year.

Hare noted that while the country has seen strides in the number of persons killed, the road safety unit is working to meet its target of having fewer than 300 people killed in traffic accidents per year.

“I am imploring passengers to always use their seat belts, and if you are going in the back of the motor vehicle and there is no seat belt, desist from taking that vehicle,” he argued.

More to be done

Inspector Gary McKenzie of the Police Traffic Division said while the police have seen an improvement in the compliance rate as a result of the public-education programme, coupled with the traffic enforcement law, there is a need for much more to be done.

“We have a constant drive to prosecute drivers and passengers for seat belts. In addition, the education aspect worked to change the culture of the road users to get them to think about their safety and not just about the prosecution by the police,” he noted.

The lawman also said the number of persons refusing to use the child-restraint system is also a cause for concern. (Jamaica Gleaner)

nadisha.hunter@gleanerjm.com

Prime Minister Bruce Golding making his plea to parliamentarians yesterday for the state of emergency to be extended. - Ricardo Makyn/Staff Photographer

Daraine Luton, Senior Staff Reporter

Prime Minister Bruce Golding will this morning huddle with the police and army chiefs to craft adjustments to their massive anti-crime initiative in the wake of the Government’s failure yesterday to get enough votes to green-light an extension of the state of public emergency in the Corporate Area and St Catherine.

Golding, on the request of the heads of the security forces, was seeking to extend the emergency regime until August 21.

However, with six government members not on the island, the Labourites needed support from the Opposition People’s National Party (PNP) to secure the extension.

Under the Constitution, at least 31 of the 60 members of parliament (MP) must give the thumbs up for a state of public emergency to be extended. There are 32 government members in the House of Representatives.

Despite political gymnastics, a stone-faced Golding and a more than 20-minute consultation between senior members of both parties, no consensus could be reached. All 25 government ministers present voted for the extension while the 18 opposition members in chamber abstained. Seventeen members were absent.

Charles’ rebuke

“Shame!” Cabinet minister Pearnel Charles shouted as the results of the vote were read by stand-in Speaker Gregory Mair.

“You are against the security forces who are sacrificing their lives,” the labour minister added, while pointing in the direction of Peter Bunting, opposition spokesman on national security.

Earlier, Golding pressed Parliament to grant the approval. He referred to a downward trend in murder figures since the measure was first implemented in May.

“We would be playing Russian roulette with the country’s security. We would be risking a regression from the significant advances that have been made if, in the face of the recommendations of the security forces, we are to say, ‘Enough is enough, this is as far as we are prepared to go’,” Golding said.

However, the Opposition, during the debate on the motion, argued that there was no need for a one-month extension.

Bunting and Opposition Leader Portia Simpson Miller said they were prepared to allow an extension until July 31 to allow for winding-down operations.

Golding, however, ignored the suggestion, arguing that the security forces would not be able to take on some tasks without those special powers.

Uneasy opposition

As it got closer to the vote, some opposition MPs moved from seat to seat trying to convince others not to be swayed by Golding. Among those uneasy was Fitz Jackson, MP for South St Catherine, who was instructed by Simpson Miller to abstain.

Then came the clearest sign that the parliamentary Opposition feared a political backlash for appearing to be soft on crime.

“We are interested in seeing this matter resolved to the betterment of all and I am suggesting, on behalf of the Opposition, before you put the matter to the vote, that we have a short consultation,” Derrick Kellier, leader of opposition business in the Lower House, said.

A 10-minute recess was granted but members took twice as much time in an attempt to break the deadlock. The result: still no deal.

Bunting later told journalists at a hastily convened press briefing that the Opposition was prepared to have the state of emergency extended beyond Independence Day, August 6.

“We offered to accept a compromise position of an extension for 15 days and during this time we would ask to have a briefing from the minister of national security, as well as the chief of defence staff and the commissioner of police.

“We would be prepared, if we felt it was justified, to extend for a further 15 days to achieve the 30 days that had been requested. The Government took the position that either we agree to the 30-day extension at one shot or there is nothing at all,” Bunting said.

Murder reduction

According to police data, from January to May, 737 murders were committed at a rate of 147 per month or five per day.

Ninety-two murders were committed in June. The year’s homicide toll up to July 20 was 876.

“The effort and the measures that have been used to bring about these reductions are measures that must be sustained, at least for the immediate, to continue that process because the security forces have made it clear to me that the nature of the operations that are being carried out would be severely hampered if there is a curtailment,” Golding said.

However, Maxine Henry-Wilson, opposition backbencher, lamented that the statistics presented by the Government were not sufficiently cogent to support its call.

“We are not against the police having the power to do whatever they need. We are not against a state of emergency per se. What we are saying is that we want to be able to take decisions from an informed perspective,” Henry-Wilson said. (Jamaica Gleaner)

daraine.luton@gleanerjm.com

The Golding administration and Portia Simpson Miller’s Opposition engaged in a reckless piece of political gamesmanship in Parliament yesterday, for which the Jamaican people could suffer severe consequences.

Both, but particularly Mrs Simpson Miller’s People’s National Party (PNP), which attempted to eat its cake and still have it, should be made to bear the penalty for such juvenile and callous fiddling with Jamaica’s interests, allowing for the collapse of the state of emergency that was initially imposed on May 23.

Emergency conditions were declared when the Jamaican state found itself under threat from irregulars loyal to Christopher Coke, the west Kingston strongman, whose extradition to the United States was finally agreed to after months of dithering. Mr Coke’s militia blockaded Tivoli Gardens, attacked the security forces and burnt police stations. Coke’s Tivoli redoubt was eventually overrun and his command infrastructure dismantled.

In the nearly two months since the state of emergency was imposed, first in Kingston and St Andrew, and later St Catherine, it has clearly had a positive effect. The 91 murders in June represented a reduction of over a fifth, compared to the same period a year ago, and by a dramatic 49 per cent compared to May.

There is a clear correlation between the decline in crime and the state of emergency, so it is understandable that most Jamaicans, who faced 1,680 murders in 2009 and more than 870 so far this year, would want it to be extended when it expires on Thursday. Which was the intent yesterday.

Opposition shunning responsibility

The PNP, we suspect, called for an urgent winding-up to the emergency, expecting to be defeated by the Government’s majority. The Opposition would have found favour with human-rights groups, declared itself to have looked out for the interest of the poor, and in the end would be free of responsibility.

Mrs Simpson Miller and colleagues didn’t count on six government members being away, leaving the administration with fewer than the 31 votes for the majority to carry the motion. And Prime Minister Golding insisted that the Opposition bear the responsibility.

It may have been a good political manoeuvre on the part of Prime Minister Golding, but irresponsible action for governance, given what was at stake and with a scared Opposition agreeing to support an extension for 15 days. Mr Golding could then have used the next fortnight to rally his members to ensure any further extension of the emergency.

We also believe it to have been irresponsible on Mr Golding’s part to have taken the motion without assurance of the votes to carry it. Which brings us back to our suggestion for a credible and consistent forum, including a parliamentary committee within which to discuss security issues, and prevent the kind of debacle that occurred yesterday.

So now, persons detained under the emergency power and against whom no charges can be laid immediately will have to released. Many are likely to have a good laugh at the Jamaican people for the inept leadership we tolerate. (Jamaica Gleaner)