As the large waves subside, reports of damage are coming in from across the Caribbean. Thankfully in most cases it does not appear to be severe and at this point there is only one fatality being reported (in Barbados)
Here’s the story so far….
Barbados: One person drowned, damage to several boats. Harbour operations disrupted for the day. We passed the Harbour today and several cruise ships were docked so we can assume port operations are back to normal. In a couple of places along the west coast the sea has over run the coastal road depositing sand but no significant damage is reported.
Trinidad: Lifeguards were kept busy at Maracas and Las Cuevas beaches in the north of Trinidad, however beaches remained open and no significant damage was reported. Lifeguards made at least one rescue, however no drownings reported.
Huge waves pounded Tobago beaches that were closed
Fishermen still ventured out and reported good fishing despite the high seas.
In St. Lucia several hotels reported that water had entered areas of the hotel. Also fishing boats were taken to safe harbour….
British Virgin Islands.
There are reports of some flooding with debris on roads but no major damage seems to have been reported yet.
Cuba appears to have been quite badly battered, with 800 people being evacuated from coastal areas, the waves did considerable damage.
There are reports of some coastal flooding and minor damage in some tourist areas.
Because of the Good Friday bank holiday, news reporting (particularly on the net) has been particularly lax today. We have yet to see much news coming out of the OECS so it is likely that tomorrow we will see fresh information. Notwithstanding that, it would appear that with the possible exception of Cuba (and the drowning in Barbados) there has not been any major damage as a result of the waves.
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.
We all bolted for the door this afternoon as we felt and saw the ground shake beneath our feet. Outside other persons were rushing from buildings and car alarms were going off. By the time we realised what was going on it was beginning to subside. Everyone is asking what’s going on and no one appears to know. Calls on cell phones are met with “Network Busy”, calls on landlines are met with busy tones. No one is hurt but everyone is calling their loved ones to see that they are okay. People are sounding strained on the phone not because they are scared for themselves but because they fear for those dear to them. “My husband is on a construction site”, “My parents are on a plane coming in, will the airport be okay?” “I can’t get through to my children’s school I wonder if they are okay?” a jumbled montage of thoughts and of concern.
It now appears that there has been a major earthquake just north of Martinique magnitude 7.3 (some sites are reporting 7.4) it was strong enough to knock a house down in St. George, reports from friends in St. Lucia, Grenada and Trinidad have all reported feeling it and have all reported that they are fine. (thank goodness)
No word yet from Martinique or Dominica. As we get word we’ll post.
It’s a time to hug your family and count your blessings, it could have been much much worse.
In a move that some would argue is long overdue, the Securities Commission stepped into the BS&T circus yesterday.
In a statement issued late yesterday, the commission also suggested that BS&T’s 3 000 shareholders “refrain from taking any further action regarding the tendering of their shares to any and all offers until this matter has been fully ventilated and some order is restored to what has become a disorderly transaction”.
In the meantime rumours of lawsuits continue to circulate around Bridgetown. Some of the questions being asked in particular are “Did the actions of the BS&T board in this matter result in the withdrawal of Ansa McAl’s offer?” and if the answer to that is yes…”Does the board have a legal liability to shareholders who wanted to sell their shares at $10.00?”. We on the margins don’t even pretend to know the answers to either of these questions, but in our humble opinions this whole matter is worthy of intense scrutiny.
There is enough money in question to make a lawsuit worthwhile, however there would appear to be no shortage of people to sue. One thing is for sure, this “disorderly transaction” has rattled the investing public in Barbados far more than any takeover battle before, anything less than complete transparency in this matter will result in lower confidence by investors in the local stock exchange.
The Securities Commission should intervene as the stakes are too high to let this debacle continue unchecked.
IN the most unexpected outcome of the whole saga both Ansa McAl AND Neal & Massey withdrew their bids for Barbados Shipping & Trading today.
Neal & Massy Chairman, Arthur Loc Jack, was first to break the news of his company’s decision “to tender Neal & Massy’s 28.1 per cent shareholding in BS&T to the ANSA McAL offer and will be recommending that BS&T shareholders who had previously tendered their shares to the Neal & Massy offer, as well as those who had intended to do the same, also accept the McAl offer”.
However this was not the case as in very short order Ansa McAl issued a press release withdrawing THEIR offer.
“This decision was taken after extensive and in-depth consideration of all the factors, both positive and negative, that have influenced our ability to acquire 50.1 per cent of BS&T shares as well as to execute our stated plans to improve the performance of BS&T in the future,” it said.
“The timing of this decision was also considerate of the many BS&T shareholders who have deposited their shares with ANSA McAL that will now have the opportunity to accept the offer of the competitor, Neal & Massy Holdings Limited (N&M), before the close of their bid on Thursday 18 October, 2007.”
Now this would seem to be too much of a coincidence to us on the Margin that they should both choose the same day to withdraw and to offer each other their shares. Neal & Massey’ s Chairman Mr. Lok Jack flew to Barbados to make the announcement, Ansa McAl issued a press release.
Looking at what happened our interpretation on this is that both companies came to the conclusion that at $10.00 per share, BS&T was no longer a bargain. Neal and Massey having earlier said that “they would respond” to the Ansa McAl bid, decided to bow out rather than raise their bid of $8.50. Ansa McAl realising that they would be stuck with buying BS&T at $10.00 and having to foot all the costs of restructuring the company, hurriedly withdrew as well, rather than pony up the cash required.
This all leads us to believe that much of this whole bid was aimed at making their Trinidadian rival pay handsomely for BS&T and was not supposed to buy the company in the first place. To say that this withdrawal is an embarrassment to them would be an understatement.
So this then leaves us several unanswered questions:
1. What of the local consortium (or are they about to fade into the woodwork as well)?
2. What happens now with the current board of directors of BS&T? We think that their initial actions require some explaining.
3. Does BS&T still want to pursue a merger and is it seeking strategic partners? (which is what started this whole mess)
One thing we can all be sure of that the BS&T story still is not over, however it would seem that a new chapter is about to begin.
We had a bit of a laugh in hearing the most recent advice from the IMF, in their latest Public Information Notice the IMF covers a seminar that was held t0 address selected cross border issues affecting the Caribbean and the three issues selected are financial integration, tax incentives and investment, and trade preference erosion.
On two of the three issues the IMF’s position isn’t that bad.
On Financial Integration:
... Directors considered that closer integration of the Caribbean’s still largely segmented financial markets can be expected to help generate higher economic growth by improving access to credit and lowering interest rate spreads. However, more integrated financial markets will also allow shocks to spread across borders more rapidly and pose greater regulatory challenges, especially with large financial conglomerates operating across different industry segments and in several countries.
On Trade Preference Erosion:
Directors recognized that the erosion of preferential access to European markets for bananas and sugar entails significant losses for several Caribbean countries….
… the strategy to address this difficult challenge will need to involve carefully targeted social safety nets to alleviate the impact on affected vulnerable groups; efforts to raise the efficiency of existing banana and sugar industries, where viable; and transition away to new economic activities, in countries where production is unlikely to be competitive even after significant efforts and investments.
Now we come to the fly in this ointment…..
Directors noted that, while the Caribbean countries’ heavy reliance on tax incentives may help attract investors, they are costly in terms of foregone revenues…..
… In light of this, and recognizing the intense competition for global investment funds which the region faces, Directors encouraged Caribbean policy-makers to weigh carefully the costs and benefits of tax exemptions and consider reducing them if possible; to step up efforts to improve other determinants of investment; and to make remaining tax incentives more cost-effective.
So if I’ve got this right, the incentive to get the revenue is costing you too much revenue, so you should cut the incentive to reduce your losses. But….. if you cut the incentive you may not get the revenue so you will end up foregoing even more revenue.
Hmmm so after some thinking we in the margin came up with this economic theory.
“While tax incentives may be expensive and may have costs associated with foregone revenue, not having the incentives is even more expensive” In short it’s better to have 75% of something rather than 100% of nothing. (And we aren’t even trained economists!)
This advice comes from the same people who managed the Jamaica’s and Guyana’s structural adjustment programs!
Once upon a time there was a small bank called Caribbean Commercial Bank. It wasn’t very big as banks go, but it was friendly and it focussed on the needs of its customers. It came into the market at a time when banking was pretty much a “take it or leave it” proposition. Over time the little bank gained more and more customers and began to shake up the older established banks. As the little bank grew bigger and bigger the established players became more and more uneasy and started to take their small customers a little more seriously.
One day the owners of the little bank decided they would sell it to another bank called RBTT. While RBTT was a bigger bank the CCB it still was new to the market and focussed aggressively on serving the customer and winning market share. And the customers after their initial concerns, were happy as the level of service at the bank remained high (even if it was not quite what it was in the CCB days).
Then the bigger bank was bought by one of the BIG OLD BANKS in the market place….
In case you haven’t heard by now RBTT has been bought by Royal Bank Of Canada, while this can be interpreted as a vote of confidence in the development of the Caribbean, it does reduce the already small number of commercial banks in the Barbados market place.
One of the features of the Banking industry in Barbados is that the indigenous banks have brought a level of competition and innovation to the market. These aspects were severely lacking in Banking services in Barbados before the indigenous banks came along. We will have to see what emerges from this buyout. Hopefully it will not be another Canadian owned Caribbean bank with a huge balance sheet and impersonal customer service.