Antigua and Barbuda Prime Minister Gaston Browne is urging the new Kamla Persad-Bissessar Government to fulfil a commitment made to the Organisation of Eastern Caribbean States (OECS) during the tenure of the People’s Partnership government—an obligation that would cost Trinidad and Tobago approximately US$60 million.
This matter stems from the massive financial crisis that originated with the collapse of two major Caribbean insurance and financial companies: Colonial Life Insurance Company (Clico) and British American Insurance Company (Baico). This crisis, which began in late 2008, sent shockwaves across the Caribbean, particularly affecting T&T (where Clico was headquartered) and the OECS.
“About a billion dollars was lost by EC (Eastern Caribbean) depositors. Those are funds that were invested by Clico/Baico in the Trinidad economy. And we felt that there should have been greater participation of Trinidad and Tobago in the resolution of the issue. Now, the previous Kamla (Persad-Bissessar) administration had agreed to provide a compensation of 100 million US dollars for the OECS countries, of which 40 million US dollars is paid. Unfortunately, the (Dr Keith) Rowley administration did not honour the remaining 60 million US dollars,” Browne explained to Guardian Media during a lunch break at the 49th meeting of CARICOM Heads of Government in Jamaica on Tuesday.
Browne said with the return of Persad-Bissessar as T&T Prime Minister, he is hoping the balance will be paid. He, however, acknowledged that T&T has its own financial problems.
“So, we’re not even asking for all of it to be paid at once. It could be a long-term bond, payable at a low interest rate over an extended period in order to reduce the cash flow impact. But those are negotiations that we hope to have with Kamla (Persad-Bissessar). And I remain hopeful that we’ll be able to resolve the issue.”
Persad-Bissessar did not attend the CARICOM meeting in Jamaica.
However, PM Browne said the option of sending a small OECS delegation to T&T is a viable option to discuss the matter.
“Mohammed will go to the mountain,” he said.
The Clico and Baico fallout had a particularly severe and disproportionate impact on the Organisation of Eastern Caribbean States (OECS) and the Eastern Caribbean Currency Union (ECCU).
The OECS/ECCU region had the largest exposure to Clico and Baico as a share of their GDPs, with some countries’ exposure reaching as high as 15 per cent of their 2009 GDP.
OECS governments were forced to undertake costly interventions and bailouts to mitigate the crisis and protect policyholders. This placed a severe strain on their national budgets and significantly increased public debt.
Browne said the inequities faced by OECS members in the Caribbean Single Market and Economy (CSME) framework were discussed during Tuesday’s meeting. And again, he referenced T&T.
“There must be some benefit for the OECS countries. You’d find, for example, that the MDCs (more developed countries), they produce most of the goods that we consume. Trinidad and Tobago, for example, is like a supermarket to the OECS. A lot of the goods that we consume, they’re imported from Trinidad and Tobago,” he said.
“But we can also source goods extra-regionally at a cheaper price. But the CET (Common External Tariff) precludes us from importing those goods, even from the Dominican Republic, for example, where we can get better prices. So technically speaking, we are subsidising prices for the MDCs.”
He said within the treaty, there is the Caribbean Development Fund (CDF), which is required to assist countries displaced as a result of the CSME to assist in capacity building but MDC’s have failed to meet their subscription to the CDF.
(Reprinted from Trinidad Guardian newspaper)
By Akash Samaroo – Reporting from Jamaica
