Notes From The Margin

April 8, 2008

Somehow We’re Not Convinced!

Filed under: Banking,Barbados,Capitalism,Caribbean,Economy,Globalisation,Media,mergers — notesfromthemargin @ 6:39 pm

Has anyone else noticed how all the major bankers are lining up to tell us how the take over of RBTT by RBC won’t affect competition in the Barbados banking market place? First John Beale and now Oliver Jordan who are both saying the same thing….

PRESIDENT and CEO of RBTT Bank Barbados Limited, John Beale, does not foresee any significant impact on the local banking sector from the recently approved amalgamation between RBTT and the Royal Bank of Canada (RBC).

Speaking to Business Monday, Beale stated I dont think it will have a great impact, I dont think it will affect the competition.

You’ll pardon us but somehow we can’t see that the removal of one of the major banks from a marketplace that verges on an oligopoly won’t affect the competition.

Maybe we’re just cynical but despite the goodly efforts of Mr. Beale and Mr. Jordan we remain rather skeptical.

Marginal

April 7, 2008

Is The Barbados Stock Exchange Becoming Irrelevant? Is it already?

We on the margin were reflecting on the recent conclusion of the Neal & Massey BS&T takeover. Neal & Massey were successful of course in buying the entire company. Some 97% of shareholders willingly took the offer and the remainder were bought out by N&M following the 90% rule. (If you own 90% of a public company you can take possession of the other 10% of shares just by paying for them). So lock stock and barrel, BS&T as an independent entity is history. What was once considered the symbol of white corporate power in Barbados has been sold (but that is another post).

So what happens next? Of course the company will be de-listed from the BSE, it’s now a wholly owned subsidiary so it won’t be traded. As a result the numbers of companies on the exchange take a hit. This will be the latest in a series of reductions in the number of public companies in Barbados. Island Properties Ltd. was taken off the exchange by Colin Brewer & Tony Hoyos, Life of Barbados was taken down by the Mutual (now Sagicor), BWIA was grounded by the Trinidad Government. If we want to think back that far Plantations Ltd. went in a long agonizing slide into oblivion. Now we have BS&T joining the ranks of companies that were once public.

Along with this slow dwindling, there is a scarcity of new companies going on to the exchange. Of course unless you count Sunbeach (we won’t go any further on that one). To make matters worse there’s an overwhelming tendancy for people to buy shares and then hold onto them for long term appreciation. So we have far more buyers than sellers. The mutual funds have added a new dimension but the returns (if you take out the BS&T takeover) have been pretty much moribund.

Merging the regional exchanges will buy time, however the fact of the matter is the investment arena in Barbados is pretty stagnant. If you listen to the rumour mill, the stories floating around about “back room deals” may or may not have substance, but they don’t engender confidence in smaller investors.

The management of the exchange must see the trends, and also must realise that from a long term view, if they do not take action they will be consigned to the same file folder that currently holds BS&T.

Marginal

March 20, 2008

One Fatality as Massive Waves Pound Barbados

 

As Barbados’ coasts received a pounding from huge waves generated by an atlantic storm, an elderly gentleman got into difficulty swimming and drowned today.

Noel Austin, who accompanied the elderly man to the beach this morning admitted there were red flags on the beach when they arrived, indicating danger and that swimming was therefore not advised. He said they still ventured into the water, but he emerged after realising the waters were too rough. Unfortunately, Austin said, his friend dismissed his advice to do the same.

The best efforts of the Coast Guard and a lifeguard on duty to save the St. Michael man were in vain.

 The heavy seas also affected operations at the Barbados Port where three cruise ships were forced to abort attempts to berth at the deep water harbour for safety reasons. After discussions between the captains and the Harbourmaster it was decided that conditions were too rough to allow for the tendering of passengers to the shore.  The port was offloading one small cargo ship that had a perishable cargo, but indicated that it’ s operations as far as servicing ships would be curtailed for the day. (The port remains open for deliveries of cargo)

There are some reports of property damage in neigbouring St. Lucia however we are short on details.

It is anticipated that the swell will become more intense over Friday but that sea conditions should be back to normal by Saturday.

We will continue to follow this story as details come to hand.

Marginal.

March 19, 2008

A Suggestion on BOLT’s

Minister of Tranport, Works and International Transport John Boyce made a comment in the house yesterday about the Government’s potential use of Build Operate Lease Transfer (BOLT) arrangements in the future.

ANY FUTURE BOLT – Build Operate Lease and Transfer – arrangements that Government signs will be designed to bring economic benefits
to the country.

Minister of Transport, Works and International Transport John Boyce told the House of Assembly yesterday during debate on the 2008-2009 Estimates of Revenue and Expenditure that BOLT arrangements were supposed to generate savings and not additional costs.

The previous administration made use of several of this type of arrangement. However the nature of the implementations often left questions on the transparency of the deals. This was noted in an IMF  report on Barbados.

The report makes a number of reccomendations with regard to this Public-Private Sector arrangement.

We on the margin would be much more reassured by the implementation of a legal framework to govern the use of BOLT’s and similar arrangements than simply Mr. Boyce’s statement of “Trust us”.
Marginal

March 18, 2008

Welcome to the 5 year long election campaign!

When the dust settled on January 16th the two parties ended up being quite far apart on number of seats but actually quite close on total number of votes cast. With only an 8% difference in terms of total votes, it means that the current government is vulnerable to a 4% swing. This means that despite a comfortable majority in Parliament, the Thompson administration must politically plan from now with an eye to elections in 2013. It also means that the Mottley opposition is already keeping an eye on that year.

As a result of this we are likely to see Mr. Thompson trying to attack what has long been perceived as the BLP’s strongest point; it’s management of the economy. The BLP for it’s part will pick at every flaw in the government’s actions.

This leads to the  ludicrousness of things such as Government suddenly becoming skeptical about unemployment statistics despite never having said a word about it before or during the campaign. It certainly was not a part of their platform. They are not releasing those figures because it will reinformce the BLP’s perception of good governance.

For the BLP’s part, this whole “We don’t know why the government won’t work with our consultants” is laughable. They damn well know why and they would do the same if they were in office as well.

What it amounts to is that we are in for a five year long election campaign, with the cut and thrust of January continuing at a lower intensity until 2013

Strap yourselves in, it’s going to be a wild ride!

Marginal

March 12, 2008

Consultants – Another One Of Those Silly Games That Politicians Play

“Politicians Mekkin Mock Sport At We…..”
Mighty Gabby

We on the margin have watched with a degree of amusement at first Prime Minister David Thompson’s “House cleaning” followed by Former Prime Minister Arthur’s war path speech. Having listened to them both I can only come to the conclusion that our prime ministers both present and past are playing “mock sport” with us.

Let’s accept a few realities here…

1. Consultants are an accepted part of governance in the Caribbean, always have been and more than likely always will be. When running something as complex as a government, it is understandable that policymakers (whatever party they may belong to) may want to have independant advice to help them shape policy or to advise them politically, to write speeches etc.

2. Let’s also accept the fact that each policy maker is going to want to select their own consultants or advisors. Hence you cannot equate persons who fill this role with public servants. Like the directors of statutory boards etc. They SHOULD resign when the administration changes. It is not victimisation for the incoming administration to say that they want to take someone else’s advice.

So here we have PM Thompson, equating hiring consultants with squandermania, just to have to turn around and defend his appointment of “political advisor” Hartley Henry as being somehow different.

We also have former PM Arthur talking about going “on the warpath” over these people being dismissed. (They should have tendered their resignations already)

While we have serious concerns about Mr. Arthur saying that he “helped out” one of his speech writers who had lost his previous employment, we also recognise that Mr. Henry is unlikely ever to file consultant report that will be filed in the government filing system. The advice given by consultants at this level is more than likely to be held in the PM’s personal files and also likely to leave the office with the individual when he demits office.

So when you cut through all of the sound and fury that has surrounded this issue, there really isn’t that much substance here. Just politicians playing “holier than thou” and mekking mock sport as they play to the gallery.

Marginal

March 10, 2008

Is Rihanna Ambassador Material?

Filed under: Barbados,Barbados Media,Caribbean,culture,entertainment,Government,Media,Rihanna,tourism — notesfromthemargin @ 9:34 pm

We came across a thought provoking article in the South Florida Times which was talking about the recent award of “Cultural Ambassador” status to Rihanna by Barbados. The article makes some thought provoking reading.

However the author then goes on to list possible downsides….
While the article concludes positively, we got to thinking that it ignores a salient point. At the moment Rihanna is an ambassador for Barbados whether she has the honorary title or is just a citizen. She is the ONLY entertainer on the world stage publicly identified with the country, and is in fact quite often the only point of reference that many people have.  If you talk to people who market Barbados they indicate that Rihanna has introduced Barbados to a range of people who had never heard of the island before. As a result of this we are inextricably tied to Ms. Fenty.
We could do a whole lot worse for an ambassador… and more to the point Rihanna recognises this tie and seems to embrace it with relish. (She didn’t have to big up the island in her acceptance speech) So yes there are risks in honoring a 20 year old, but we are taking that risk whether we accord Ms. Fenty the ceremonial title or not.
Marginal

March 9, 2008

David Thompson Praises Owen Arthur- BFP Criticises David Thompson….Coincidence?

 

It was bound to happen sooner or later, BFP turned savage on David Thompson. (Just after Mr. Thompson praised his predecessor)  It would seem that BFP is discovering that politicians are politicians. (Particularly in Barbados)

The whole tale in three parts….

Nation News – Well Done!

BFP: Barbados Cabinet Ministers Free To Accept “Gifts” From Persons Wanting Government Approvals Or Contracts

(Note The BFP  article is published same day as the Nation Article)

Our take on the matter…(Published in June LAST YEAR) “Prime Minister Owen Arthur, and the Opposition Democratic Labour Party led by David Thompson, who was once the Minister of Finance, are virtual ideological twins”

What makes Barbados fortunate is that both Mr. Thompson and Mr. Arthur are quite good as politicians go, and while they may both talk left their actions are decidedly centrist. But anyone expecting fundamental change from either party is likely to be disappointed.

Marginal

March 2, 2008

Troubling Developments In Grenada

On of the more troubling stories to cross the Margin’s radar recently is this story out of Grenada where from what is being said it would seem that police were caught spying on an opposition party planning meeting.

 Grenada’s opposition party has accused the Keith Mitchell administration of spying on a private meeting of its executive and wants Scotland Yard to investigate the allegation.

The National Democratic Congress (NDC) claimed that a police officer was caught secretly recording a closed-door meeting and pointed fingers at the Prime Minister’s New National Party (NNP) as the ones behind the move.

But the NNP has denied the spying allegation.

Of all of the islands of the english speaking Caribbean, Grenada has had one of the most erratic relationships with democracy. Having gone through years of mis rule under Gairy, the Revolution and invasion (or intervention) by the United States military.  In spite of all of the foregoing, Grenada has developed today  into a flourishing and stable democracy.

For the coming election on the Spice Isle the stakes are higher than ever, for the first time in a while it looks as if there may be a real chance of the Government changing.  On the night of the Barbados election we made the statement that the true test of democracy is when the result of the election is accepted by supporters of all parties the winners and the losers.  If anything is allowed to cast doubt on the integrity of the electoral process in Grenada the consequences may be significant.

On an island with Grenada’s bloody history, democracy is too fragile to take anything for granted.

Marginal

 

 

February 25, 2008

Do We Need A Caribbean FBI?

Faced with rising crime rates, Caribbean governments have struggled to keep pace. However at a time of challenging economic conditions and soaring levels of indebtedness, many Caribbean police forces are overwhelmed, underpaid, and under-equipped. This is particularly the case in the smaller economies of the OECS (you will note that I did not say “smaller islands”) The Caribbean with it’s inadquately equipped security forces, and many islands with inlets and coves make the chain attractive as a route for drug traffickers to move narcotics to the metropolitan markets.

The wealthier economies in the region have attempted to strengthen their security apparatus however, they are often faced with criminals who have more sophisticated equipment than they do.  The problem is compounded by the lack of financial assistance for security ( a mindset that is slowly changing).

It is against this background that Trinidad Prime Minister Patrick Manning recently proposed the development of a Pan Caribbean law enforcement agency.

Patrick Manning said a well-trained, equipped regional force with the power to legally operate in any CARICOM country would be part of the answer to combating the crime situation – one which he insists is being driven by the illegal drug trade.

“Many of us in the Caribbean today are challenged by the unacceptable levels of criminal activity in our country, most of which are now spurred by the global traffic in illegal drugs. The trade in illegal arms and gang warfare lead to an unacceptable level of homicide in our main urban centres,” he said, while delivering the keynote address at the recent University of the West Indies (UWI) Mona Campus Commemoration Dinner in Jamaica….

…..Mr Manning said his country had sought to stem the flow of illegal drugs and arms into the country through initiatives which he believes will eventually rid the country of the drug trade, such as round the clock surveillance of the twin island republic’s largely unprotected coastline. But he also noted that the pattern in the past demonstrated that when the operations of drug lords are interrupted in one country they move to another.

“(That) pattern emphasises the need for multilateral efforts among ourselves and with the wider world. Failure to effectively deal with the issue of crime could stymie the economic and social development of the Caribbean,” he said.

Mr Manning further urged CARICOM heads to spearhead the process of greater cooperation in the sharing of intelligence among police forces to head off migratory drug smugglers.

In theory this sounds like a great idea, and we on the margin support it generally. However would such a “federal” force be allowed to operate? To often in the Caribbean there are rumours (and we  aren’t prepared to say they are only rumours) of “certain people” in certain countries being untouchable, would a CFBI be allowed to go after them?If they were it would open an interesting can of worms.

Would the criminals arrested by this federal force be prosecuted in local or regional courts? For example we have many cases of witnesses in Trinidad being murdered before they can testify, we also have rumours of corrupt judiciaries in some countries, would people arrested by the “Federales” have a likely chance of getting convicted in a local court?

When you look at the implications of a Caribbean Law Enforcement agency, it’s not as simple as it might appear at first blush. For it to be really effective it would have to be part of a Pan Caribbean judicial system.

Marginal

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