Business Journal June 2011

ISBN 2218-0826

Business Journal

Volume 2 Number 1 June 2011

contents ISBN 2218-0826

BusinessJournal

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From the Editor

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China’s growing investment in the Caribbean

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Latin America - strongest growth FDI in 2010

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IMF reports warns of overheating in Latin America

June 2011

PROFILE 31 Trinidad and Tobago tells IMF to focus on small states 32 New Energy Minister in Trinidad and Tobago 33 Reinventing Petrotrin

Volume 2 Number 1 June 2011

COLUMNS 15 Central America - rising crime and violence puts development at risk 17 Ganging up on Central America: corporate business as usual?

23 The OAS 27 Mining and mining resources in ACP countries: ending exploitation, ensuring sustainability

34 Lake Asphalt of Trinidad and Tobago (1978) Ltd. 37 NGC: improving community life 39 News Briefs PERSPECTIVES 43 Garfield King 45 Enhancing tourism competitiveness through government supported hotel and guesthouse room upgrades 49 Global News

Senator Kevin Ramnarine, appointed Minister of Energy and Energy Affairs in a major Cabinet shake-up in Trinidad and Tobago

55 The lighter side

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Editor: Linda Hutchinson-Jafar

Design and layout: Karibgraphics Ltd.

Contributors: Ken Allum Adam Blackwell Dr. Anthony Bryan Ambassador P.I. Gomes Garfield King Sirius Mann Kuarlal Rampersad

Business Journal is published by: Caribbean PR Agency #268 Harold Fraser Circular, Valsayn, Trinidad and Tobago, W.I. T/F: (868) 645-0368 hutchlin@gmail.com www.bizjournalonline.com Š 2011. No part of this publication may be reproduced without the written permission of the Publisher.

TRUE CARIBBEAN DIVERSITY A booming economy driven by real GDP growth of 8% over the last decade; over 700 new hotel rooms including the international brands Hyatt and Holiday Inn, with another 150 on the way. A developed capital city of Port-of-Spain, fast becoming the meeting and conference capital of the southern Caribbean; unrivalled as the trade, financial, diplomatic and judicial hub of the Caribbean and an extremely favourable business climate offering a streamlined approach to private investment. This, all tastefully complemented by the sun, sea and satisfaction of our beautiful tropical islands, celebrated for its warm people, colourful heritage and unique culture.

Your next tourism investment just chose itself.

TRINIDAD & TOBAGO…The True Caribbean.

WE ARE NEXT.

1 868 675 7034 www.gotrinidadandtobago.com www.tdc.co.tt

June 2011

ISSN 2070-4593

Earth Conscious Magazine View out latest issue: June 2011

www.earthconsciousmagazine.com

From the Editor’s Desk

D

ear readers, how time has flown! This issue of Business Journal celebrates the one year anniversary of our publication and the journey thus far has been both encouraging and interesting.

When my team and I started Business Journal, our intention was to produce an online publication that brought in-depth reporting, analysis and commentary to major business issues and events, looking behind and beyond headlines in the Caribbean.

We were aiming high to become a forum for unfettered debate on some of the most pressing issues facing our Caribbean society. Twelve months later and through your support, we believe we are accomplishing our goals.

The Journal also continues to attract a high calibre of commentators from the western hemisphere and our four regular columnists, Dr. Anthony Bryan, Ambassador P.I. Gomes, Garfield King and Sirius Mann never fail to captivate us with their essays.

We started off Business Journal in June 2010 tracking the impact of the global financial storm on our economies in the Caribbean and Latin America.

Some progress has taken place and you can read all about it in several articles in this issue of Business Journal.

Thanks again for all your support as we continue to mould Business Journal as a forum for social interaction and taking the debate on issues facing the Caribbean to a higher level.

Feel free to email me at hutchlin@gmail.com and also check out our magazine’s website at www.bizjournalonline.com

Regards,

Linda Hutchinson-Jafar

Editor

JUNE 2011 | Business Journal

China’s Growing Investment in the Caribbean The lucrative and fast growing Chinese outbound travel market

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aribbean and Latin American countries are attracting greater attention from China which has resulted in increased investment and in some cases, rising tourist arrivals from the Asian country.

ECLAC’s recently released report ‘Foreign Direct Investment in Latin America and the Caribbean 2010’ said Chinese companies invested almost US$15 billion last year in Latin America and the Caribbean.

“In 2010 China became the third largest investor in Latin America and the Caribbean, with a share of 9%, behind the United States (17%) and the Netherlands (13%),” according to the report.

In 2009, Chinese investment in the Caribbean alone totalled US$7 billion which went into major infrastructure projects.

Dr. Adam Wu, Chief Operating Officer of the China Business Network told the Caribbean Hotel & Tourism Investment Conference (CHTIC) held in Montego Bay, Jamaica in early May that there’s nothing mysterious about Chinese investment in the Caribbean.

China Eximbank also plans to launch a $US1b sovereign fund to invest in Latin America including the Caribbean.

Countries in the Caribbean and Latin America which broke off ties with Taiwan, the self-ruled island that China deems an illegitimate breakaway province also received significant investment from China.

Many Caribbean countries which have full diplomatic relations with China have been on the receiving end of attracting investments.

But lack of diplomatic relationship has not stopped Chinese investing or visiting destinations. For example, China plans to invest $462 million in a stalled beachfront resort in the Dominican Republic. business journal | JUNE 2011

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Tiny eastern Caribbean island Dominica has benefited from a US$17 million cricket stadium and US$122 million in economic assistance; Guyana –a US$100 million purchase of a majority stake in OmaiBauxite Mining while Trinidad and Tobago has received US$3 billion for an Aluminium project; construction of the prime minister’s official residence and the National Academy for the Performing Arts.

Over 90% of confirmed Chinese investment in Latin America has targeted the extraction of natural resources. In the medium term, this country’s transnational enterprises are expected to continue to be active in the region and diversify into infrastructure and manufacturing sectors, according to the ECLAC report.

Through its analysis of the sectors targeted

by FDI, the United Nations Commission points out that the investment flows are reinforcing the region’s production pattern.

In South America, the main recipient sectors in 2010 were natural resources (43%) and services (30%). Compared with the period 2005-2009, a greater share of investment takes the form of primary sectors. In Mexico, Central America and the Caribbean, investment continues to target mainly manufactures (54%) and services (41%).

The share of Latin America and the Caribbean as a recipient of investment with a high technology content remains small compared with other regions, although there has been an increase in the number of FDI projects in medium to high technology sectors and those associated with research and development.

The Numbers Game - some Key Facts • • • •

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China has become the second largest economy in the world China has the highest amount of foreign reserves - more than the total of Japan, Russia and Saudi Arabia combined Total amount of FDI China made in 2010 was higher than the World Bank did worldwide Chinese Government are investing billions (7 billion in 2009 alone) in the Caribbean through SOE and private corporations, building major infrastructure projects, financing roads and ports - stadia, conference centres China Eximbank to launch US$1b sovereign fund to invest in Latin America including the Caribbean Fastest growing outbound travel market - 21% increase within 2010 when most other markets were still shrinking or stagnating Boston Consulting Group predicts the value of Chinese outbound travel market will be $590 billion by 2020 China still has the largest population - 1.34 billion, i.e. 1,340 million people - everything should be measured against this huge population base.

China Business Network (CBN)

CHINESE SHOW BIG INTEREST IN GRENADA A 19-member trade mission from Touchstone Capital Partners, a business group from China recently visited Grenada seeking investment and trade opportunities.

The Mission, headed by Mr. Fu Zai Song, Chairman of Touchstone Capital Partners, involves companies with interests in agriculture, fisheries, mining, energy and tourism sectors.

In a document presented to the Government of Grenada, Touchstone Capital Partners outlined a work-plan for their involvement in the development of Grenada, including the centralizing of operations in St. George’s, as a hub for their business activities in the Caribbean, Central and South America.

The Chinese delegation, accompanied by the Ambassador of the Peoples Republic of China to Grenada, Xu Jianguo outlined a development package which provides for an immediate investment of US $10M into the Grenadian economy.

JUNE 2011 | Business Journal

LATIN AMERICA AND THE CARIBBEAN EMERGE WITH THE STRONGEST GROWTH IN FDI IN 2010

In 2010, Latin America and the Caribbean was the region with the strongest percentage increases as a recipient and source of Foreign Direct Investment (FDI), according to the ‘Foreign Direct Investment in Latin America and the Caribbean 2010’ presented recently in Mexico City, Mexico, by the Economic Commission for Latin America and the Caribbean (ECLAC).

Last year, the region’s FDI inflows were 40% higher than in 2009, representing US$112.634 billion, while outgoing FDI almost quadrupled in the same period to reach a historic high of US$43.108 billion, which highlights the buoyancy of transnational Latin American and Caribbean enterprises, known as trans-Latins.

In a context of falling foreign investment in developed countries (-7%) and rising investment in developing countries (10%), Latin America and the Caribbean increased its share of the recipient market from 5% to 10% between 2007 and 2010.

For 2011, FDI flows to Latin America and the Caribbean are expected to maintain this trend and increase by between 15% and 25%, which could take them to unprecedented high levels, according to the projections of the report launched by the Executive Secretary of ECLAC, Alicia Bárcena, and the Mexican Minister of Finance and Public Credit, Ernesto Cordero.

“The figures we are presenting...point to the growing integration of Latin American and the Caribbean in the process of economic business journal | JUNE 2011

globalization. The region’s countries not only remain attractive to foreign investors, but they are also increasingly daring to conquer other markets by means of trans-Latins”, stated Ms. Bárcena.

Nevertheless, the senior official did emphasize that “in order to improve the capacity to absorb the benefits of such investment, we are stressing the need to implement productive development policies focused on innovation and on the strengthening of local capacities to promote the creation of quality employment. FDI must help the region to grow with equality”.

According to the report, the region’s main recipient was Brazil, where FDI inflows posted a record surge of 87%, going from US$25.949 billion in 2009 to US$48.462 billion in 2010.

The second main recipient was Mexico (US$17.726 billion ), followed by Chile (US$15.095 billion), Peru (US$7.328 billion), Colombia (US$6.760 billion) and Argentina (US$6.193 billion). In Central America, foreign investment flows to all countries grew, except in the case of El Salvador (-79%).

In the Caribbean, inflows fell 18%. Mexico was the country that invested the most abroad in 2010 (US$12.694 billion). This was followed

by Brazil (US$11.5 billion), Chile (US$8.744 billion) and Colombia (US$6.504 billion).

The factors that resulted in the increased FDI receipts in 2010 include the improved performance of developed economies and the buoyancy of certain emerging economies that boosted some sectors thanks to increased demand.

United States remains the main investor in the region and was responsible for 17% of the FDI received in 2010, followed by the Netherlands (13%), China (9%) and Canada and Spain (both 4%).

The thirteenth version of this ECLAC report highlights the emergence of the Asian giant, China. In 2010, Chinese companies invested almost US$15 billion in Latin American and Caribbean countries, fundamentally in the form of mergers and acquisitions.

Over 90% of confirmed Chinese investment in Latin America has targeted the extraction of natural resources. In the medium term, this country’s transnational enterprises are expected to continue to be active in the region and diversify into infrastructure and manufacturing sectors.

Through its analysis of the sectors targeted by FDI, this United Nations Commission points out that the investment flows are reinforcing the region’s production pattern.

In South America, the main recipient sectors in 2010 were natural resources (43%) and services (30%). Compared with the period 2005-2009, a greater share of investment takes the form of primary sectors. In Mexico, Central America and the Caribbean, investment continues to target mainly manufactures (54%) and services (41%).

The share of Latin America and the Caribbean as a recipient of investment with high technology content remains small compared with other regions, although there has been an increase in the number of FDI projects in medium to high technology sectors and those associated with research and development.

The ECLAC publication also deals with FDI and export platforms in Central America, Panama and the Dominican Republic. According to ECLAC, transnational enterprises still wish to invest in Central American countries to generate export platforms, but the target sectors have changed from manufactures to services (especially tourism, property business and remote business services).

Lastly, the document reviews the main foreign investments and the business strategies observed in the regional telecommunications industry, where there is a convergence towards broadband, as well as the growing involvement of Latin America in the software industry, which has become a driver of economic growth.

JUNE 2011 | Business Journal

New IMF Report Warns of Overheating Risks in Latin America

Latin America continues to grow at a healthy pace led by strong expansion in domestic demand. But the region is experiencing an excessively stimulative environment that brings along the risk of overheating.

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igh commodity prices and easy external financial conditions are the main “tailwinds” propelling growth, in some instances at a pace faster than some economies are prepared for, says the International Monetary Fund’s new report Regional Economic Outlook Western Hemisphere: Watching Out for Overheating , presented in Mexico City last month.

The region’s Gross Domestic Product (GDP) is estimated to have expanded by around 6 percent in 2010, and while it is projected to moderate to about 4.75 percent this year, this will require that governments withdraw any policy stimulus on a timely basis.

“Currently, we have a unique combination of factors,” said Nicolás Eyzaguirre, director of the IMF’s Western Hemisphere Department, during a presentation of the report hosted by Banco de México.

“There is no record of another period in which interest rates were so low for so long in the advanced economies; demand from Asia has kept commodities prices at a high level; and emerging economies have better macroeconomic fundamentals than in the past, making them objectively more attractive to foreign capital.”

On top of that, he pointed out, many countries have not yet rolled back stimulative policies put in place during the financial crisis to support demand, at times when restrain is needed.

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Signs of overheating Against this background, early signs of overheating pressures and possible excesses are surfacing in several areas across the region: •

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Inflation is rising stimulated by demand factors, and the problem is compounded by the recent rises in food and energy prices. Though many central banks have been raising policy rates, additional rate hikes will be needed to contain demand pressures and limit spillovers from higher food and fuel prices into core inflation and expectations.

Current account deficits are widening, with import growth exceeding export growth, even in those economies benefitting from higher commodity export prices. An adjustment to fiscal policy could play an important role in preventing an excessive deterioration of external imbalances.

Credit is accelerating. Although banking systems remain generally solid, leverage and borrowing in foreign currency has been expanding fast (particularly among corporations), and asset prices have reached high levels. Countries should continue to strengthen their financial systems using the so-called macro-prudential policies, though these should not be used as a substitute for macroeconomic adjustment.

Challenges differ across the region The recovery is gaining strength in Central America, though growth has been somewhat weaker in countries highly reliant on remittances. The report recommends governments to rebuild policy buffers used during the global crisis now that output gaps are closing. Improving the business climate and institutions remains a key priority for this sub-region.

The Caribbean remains the most vulnerable part of the hemisphere. Most countries are expected to start their recovery from the two-year recession in 2011, although higher food and fuel prices pose a threat to the recovery. Because of still very high public debt levels, which are holding back growth, fiscal consolidation plans will have to proceed.

Protecting the poor A major challenge for policymakers in the region is to protect the most vulnerable segments of societies from the effects of food and fuel increases and of rising inflation. For all countries, Mr. Eyzaguirre noted, but particularly for those where the recovery is weaker and fiscal space for action limited, “the challenge is to protect the poor, but avoid universal subsidies that are often very costly and regressive.”

Foreign exchange intervention This Regional Economic Outlook takes a special look at foreign exchange intervention, examining intervention practices over the past seven years in Latin American and other countries with flexible exchange rates.

The analysis concludes that foreign exchange interventions may help slowdown the pace of appreciation, but its effectiveness depends much on country-specific circumstances, including the degree of financial openness and the currency strength.

Ultimately, the desirability of intervention policies should be evaluated within a comprehensive framework that considers the pros and cons of the policy toolkit, including other macroeconomic policies as well as prudential measures.

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Following is an abbreviated statement from newlyappointed President of the Caribbean Development Bank, Dr. Warren Smith.

Dr. Smith spoke on the theme ‘Caribbean Leadership – Confronting the anxieties of our people’ at the 41st annual meeting of the Board of Governors which took place in Trinidad in late May.

In 2011, we expect a return to economic growth in most of the BMCs. However, the weak fiscal position will continue to be challenging and will require sustained emphasis on fiscal consolidation and careful debt management.

Additionally, many of the gains made in the past decade in poverty reduction have been undermined or reversed. There will be increased emphasis on restoring these gains.

Caribbean Leadership - confronting the anxieties of our people Overview I now turn to the main theme of my Statement “Caribbean Leadership – Confronting the Anxieties of our People.”

Over the past 50 years, Caribbean countries have witnessed impressive improvements in socioeconomic performance.

There have been dramatic increases in living standards; life expectancy at birth; adult literacy and school enrolment, to name a few.

Many of our BMCs have already reached the MDG goal of 100% primary school enrolment; have embraced the more ambitious target of 100% secondary school enrolment; and are set to achieve or exceed the MDG health goals by 2015.

Despite these achievements, issues about the quality of the education system remain a major concern; sustained growth and development continue to elude many countries; and poverty remains unacceptably high.

Our BMCs are displaying a distinct lack of agility in side-stepping the confluence of business journal | JUNE 2011

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development challenges that give rise to anxiety amongst our people, that is, a generalised sense of losing control of their destiny in a number of critical areas of social and economic life. We can further classify this anxiety under the broad rubrique of “insecurity” – insecurity about their economic situation; insecurity due to the impact of climate change on their lives; and personal insecurity due to rising crime and violence.

Insecurities Let us examine these insecurities more closely.

The principal economic insecurities which the Region currently faces have been exacerbated by structural weaknesses and extreme vulnerability linked especially to small size, openness, narrowness of the production base and proneness to potentially devastating natural hazards.

The economic structure has been further undermined and industry competitiveness challenged by volatile oil prices since the 1970s and the deeper integration of Caribbean economies into the international financial and economic systems through globalisation. The signing of the 2008 Economic Partnership Agreement signalled the end of unreciprocated preferential access by Caribbean exports into the European Union (EU) market.

New insecurities were created as agriculture production, farm incomes and employment declined; small farmers, especially in banana and sugar producing countries were displaced; and poverty levels rose, and dramatically so, in rural communities.

As the 2008 global economic and financial recession unfolded, and the Caribbean experienced its impact, vulnerability increased.

The recent collapse of the Trinidadian conglomerate, CLICO and its subsidiary BAICO reverberated through the Region, and resulted in major losses to both institutional and private investors despite rescue efforts of regional governments.

The impact of climate change is another contributor to insecurity for many BMCs. It is perhaps our single most important environmental and developmental challenge, with worry-some implications for economic growth, development sustainability and our poverty reduction goals. Its economic impact is already visible, with damaged and destroyed infrastructure being only one of the casualties.

We do not have the luxury of ignoring climate change, for the consequences of inaction are projected to far exceed our incomegenerating capacity by the start of the next century.

The third contributor to anxiety in Caribbean society that should be given high priority on the development agenda is crime and violence, a growing and seemingly intractable problem. The incidence of violent criminality has reached almost epidemic proportions in too many Caribbean countries.

The Managing Director of the World Bank cited a 2007 World Bank report concluded that murder rates in the Caribbean, at 30 per 100,000 population annually, are higher than for any other region in the world. The international trade in narcotics seems to be at the root of the upsurge in violent crimes.

Also, the economic and social consequences are enormous as rising crime levels generally demand an increase in public expenditures to strengthen the security forces; have a dampening effect on tourism as visitors begin to fear for their safety; stifle business development as new investment and access to financing become constrained; and decimate established communities abandoned by families escaping the effects of gangs, drugs and illegal arms.

The Imperatives – Overcoming Anxiety/ Conquering Insecurities Of course, the insecurities which I have outlined do not represent the full universe of issues requiring the immediate attention of Caribbean leaders. However, their urgent redress in the near-term will lay the foundation for achieving the quality of life to which most of our people aspire in the medium term.

Consistent Growth and Development Strategies Let us now focus on what needs to be done.

A continuing imperative for Caribbean leadership is the consistent implementation of a development strategy to shift regional economic activity onto a new growth trajectory.

This would generate the resources needed for a dramatic reduction in the unacceptably high levels of poverty.

The Asian economies have demonstrated so well that a sine qua non for drastic and permanent reductions in poverty is rapid and sustained economic growth. That strategy, no doubt, must speak to, inter alia, the importance of remaining vigilant and being committed to the pursuit of sound, prudent and predictable macroeconomic policies which will provide the platform upon which robust economic growth can be built.

Governments must be generating, on a consistent basis, healthy fiscal savings, prudently setting aside funds to create the fiscal space needed when financial crises, natural hazards or other unexpected events occur.

To shift our economies onto a growth trajectory consistent with rapid improvements in living standards, we will also need to address the vulnerability and uncertainty inherent in our economies. This will require the systematic reduction in the impediments to the creation of new, more resilient industries and the reengineering of traditional ones to make them internationally competitive.

We should not allow negative, firstround consequences to overshadow the potential benefits that globalisation and trade liberalisation offer the Region. Instead, a more 12

JUNE 2011 | Business Journal

focused examination will allow for strategic exploitation of opportunities created by a more diversified access to the large European market and structural shifts in other parts of what is now a multi-polar global economy.

Private Sector Development Countries that pursue consistent stabilisation policies and undertake needed structural reforms are also likely to witness the emergence of a dynamic private sector. The private sector can be Government’s main ally because it can help to unlock those opportunities for poverty reduction; and therefore, conditions must be made suitable for the private sector to flourish.

Reforms should improve, not hinder, the conditions for “doing business.”

Modern business legislation must be in place.

The

State apparatus should discourage corruption and inefficiency. And the labour force must be suitably trained to meet the skills requirements of the emerging economic structure.

Efficacy of Regional Approaches in Solving National Problems Addressing the imperatives at the national level is vitally important but offers only a partial solution to the insecurities that Caribbean people now face. In many respects, the removal of national constraints to economic diversification can be most effectively and efficiently pursued through regional solutions.

As our BMCs struggle with some of our new realities, the evidence increasingly shows that regional approaches are most appropriate for addressing the region’s most pressing problems.

INDIANS SEEK CLOSER RELATIONS WITH TRINIDAD AND TOBAGO

Vayalar Ravi, Minister of Overseas Indian Affairs and Civil Aviation paid a courtesy call on Trinidad and Tobago’s Prime Minister, Kamla Persad-Bissessar. They discussed the bi-lateral relationship between Trinidad and Tobago and India and areas of opportunity for improved trade, medical, educational and other ties.

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CENTRAL AMERICA:

Rising Crime and Violence puts Development at Risk

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entral America’s spiralling wave of crime and violence is threatening the region’s prosperity as countries face huge economic and human losses as a result of it, according to a World Bank report.

Aside from the pain and trauma inflicted upon victims, violence can cost the region up to 8 percent of its GDP when taking into account law enforcement, citizen security and health care costs, the report argues. This is no small change for a region that in 2010 grew around 2 percent of GDP, while the rest of Latin America grew around 6 percent.

To make matters worse, crime and violence also hampers economic growth, not just from the victims’ lost wages and labour, but by polluting the investment climate and diverting scarce government resources to strengthen law enforcement rather than promote economic activity, argues Crime and Violence in Central America: a Development Challenge. business journal | JUNE 2011

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But, in a redeeming twist, the study also suggests that a ten percent reduction of murder rates in the region’s most violent countries could boost annual economic growth by as much as a full one percent. Crime rates in El Salvador, Guatemala and Honduras are among the top five in Latin America. In the region’s other three countries—Costa Rica, Nicaragua and Panama— crime and violence levels are significantly lower, but a spike in recent years has raised serious concerns.

Some perspective may help gauge the extent of the problem. While Central America’s population is roughly the same size as Spain’s, Spain only registered 336 homicides in 2006, in sharp contrast with Central America’s 14,257 homicides–an average of 40 per day.

A heavy burden The report states that crime is a heavy burden on Central America’s economic and social perspectives.

“From threatening the wellbeing of citizens and the investment climate, to weakening the legitimacy of government institutions, violence affects all spheres of life in Central America,” notes author and social development expert Rodrigo Serrano- Berthet.

All Central American business owners, except in Costa Rica, place crime among the top five obstacles to business growth and productivity, notes Serrano-Berthet.

“More tellingly, 71 percent of Central Americans identify crime as the main threat to their wellbeing,” the expert said.

Drug trafficking and a decades-long culture of violence emerge as the main culprits in Central America’s crime predicament. Easy access to firearms and weak judicial institutions are also to blame for the region’s violent state of affairs, according to the report.

Narco trafficking ranks as the top cause for the rising crime rates and violence levels in Central America, a reflection in part of the sheer volume of narcotics flows through the area – 90 percent of US-bound drugs, according to the study. Inherent traits of drug cartel operations, such as turf wars and vendettas between rival gangs, seem to fuel the region’s murder rates.

The complexity of this situation calls for a regional approach and greater emphasis on prevention, at the expense of interdiction, which has proven insufficient to diminish the traffickers’ capacity. Also, successful strategies require actions along multiple fronts, combining prevention and criminal justice reform, says report author and social development expert Lorena Cohan.

“Marginal funds that countries have should be redirected for use in drug prevention and youth-at-risk programs, in reforming weak criminal justice institutions and in passing legislation to curb easy access to firearms,” Cohan said.

Availability of firearms, an offshoot of the drug trade, is indeed a stubborn problem in a region where lengthy civil wars made weapons household items. As a result, some 4.5 million small arms were in the region in 2007, the vast

majority of them illegal, and often used in the commission of violent crimes, the report said.

Most homicide victims are young men between the ages of 15 and 34. This makes youth violence and gangs a critical concern in Central America today, where estimates place the number of gangs or ‘maras’at 900, with a total of 70,000 members.

Despite the overwhelming numbers, gangs don’t seem to be the main culprits in raising crime rates. “While gangs are doubtless a major contributor to crime in El Salvador, Guatemala and Honduras, the very limited evidence indicates that they are responsible for only a minority share of violence; multiple sources suggest that perhaps 15 percent of homicides are gang related,” according to the report.

Criminal justice system ‘weak’ The study also puts under the microscope Central America’s criminal justice system which it calls “weak”. While it argues that this “weakness” limits the efficacy of crime and violence punishment and prevention, it also recognizes the advances the region has made in improving its judicial institutions.

“There is a vicious circle in the region where the high crime rates are contributing to weakening the criminal justice system. By contrast, many countries have been applying a set of measures that need to be supported, including a transition to more transparent accusatorial mechanisms, providing a greater role to prosecutors, strengthening publicdefense and introducing alternative sentencing mechanisms,” Serrano- Berthet said.

The report contends that there is no quick and easy fix to Central America’s crime and violence problem.

Rather, it stresses that policymakers will need to persevere because all indications are that the fight against crime is likely to be long lasting.

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Column Ganging up on Central America: Corporate Business as Usual?

It was a dramatic admission by a Central American President!

Three and a half years after taking power, in an interview with El Pais on 24 May 2011, President Alvaro Colom says the two previous governments of Guatemala “planned delivery of the country” to drug traffickers. (http://www.elpais.com/ articulo/internacional/narcos/ nos/estan/invadiendo/elpepiint/ 20110524elpepiint_7/Tes) Ironically, since 2003 President Colom himself has been accused of having connections to the drug cartels.

But that is not the whole story. Guatemala is one symbol of a larger problem. It has its own home grown gangs, but the web of corruption in which President Colom has been implicated can be traced back to Mexico and the growing power of organized crime and the drug cartels.

While the United States and the world are focused on the violence in Mexico, the penetration of Central American countries by the transnational gangs and the drug cartels is beginning to raise alarm bells everywhere.

Mexican drug cartels now operate freely in parts of Central America. U.S. supported crackdowns in Mexico and Colombia have only pushed traffickers into a region where corruption is rampant, borders lack even minimal immigration control and local gangs provide a ready-made infrastructure for organized crime.

Ironically, Mexican organized crime and gang warfare has also become a “domestic” issue for the US border and beyond.

A Reality Check Democratic governance is under stress in Central America and some of these weak states seem to be unraveling. Across the region,

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international drug traffickers, violent youth gangs, and organized crime syndicates have largely replaced Marxist rebels of the 1970s and 1980s as the chief instruments of disorder. They are the key figures in drug smuggling, human trafficking, arms dealing, kidnapping, robbery, extortion, and money laundering.

Insecurity is a fact of life in Honduras, Guatemala and El Salvador which are now among the most violent countries in the world outside of global active war zones. Gang related violence and crime have driven down economic activity, fostered widespread fear, and made life unbearable for much of the population. In the past decade, homicide rates have gone up dramatically in every country in the region. As Kevin CasasZamora, a senior fellow at the Brookings Institution points out, in 2009, Guatemala and Honduras had respectively more murders than the 27 countries of the European Union combined.

A very disturbing development is the level and the character of the related violence. Mexico’s brutal Zetas drug cartel has set up operations in Guatemala in the largely indigenous region along the countries’ shared border. The Zetas are blamed for a recent mass killing in Mexico--183 bodies found in mass graves in early May 2011. Mexican federal officials said most of the victims were Mexicans looking to migrate to the United States in March, but who instead were kidnapped off passenger buses and killed.

The Zetas are suspected of forcefully recruiting migrants to fight their former allies the Gulf cartel. Those who refuse are killed.

Never have such massive killing fields been found in such a short time in Mexico and only a

few parallels in this hemisphere exist (notably organizations, ranging from youth gangs to Argentina under the military regime.) sophisticated drug trafficking organizations

There is little doubt that the narcotics (DTOs), control substantial portions of national trade is the accelerator pushing the trend. territory in Central America. They serve as Approximately 40 percent of the total number de facto governments as they collect “taxes” of murders is directly connected to drug through dues and extortion, demand the loyalty, trafficking in Guatemala, where, according or at least the acquiescence, of the people under to some estimates, 40 their control, and punish percent of Guatemalan those who interfere with territory (particularly the their illicit activities.

Second, Central forests of Petén in the north) is outside of the American gangs are also control of the state and spreading across Canada under effective control of and the USA. In essence, criminal organizations. the threat is much

The narcotics greater than just Mexico “tsunami” (according to and Central America as Casas-Zamora) engulfing the “transnational” gangs the region cannot be extend their regional and underestimated. Street global reach.

Third, as Max gangs attract the most media attention and are Manwaring, a professor Words tell the story of a suspected gang member.

The sale and distribution of drugs is the principal often seen as the principal of military strategy at the source of revenue for gang members. cause of insecurity in U.S. Army War College the region. But they are has stated when gangs simply the expendable ground troops in a much and TCOs become de facto government, it is more elaborate structure. more than a national security problem. It is a

At the upper levels of the gangs and their development issue! As they become more and Trans-national Criminal Organizations (TCO) more deeply involved in politics, real estate, allies in Mexico the structure is similar to any and religious and community organizations, multi-national Fortune 500 company. Gangs gangs and their allies become social actors.

While it appears that monetary gain like the Mara Salvatrucha (MS-13) in Central America and as well as paramilitary groups remains as the primary motivation for the like Los Zetas in Mexico, have hundreds or various gang activities, the gangs are indeed thousands of members organized into numerous challenging governments for virtual control cells and overseen by a centralized hierarchy. of parts of the state. Partial collapse of the They employ individuals ranging from hit men state is tantamount to the physical erosion of to accountants and lawyers, who occupy key democracy.

Fourth, in addition to violence, corruption nodes in illicit networks. Some analysts refer to these groups as “third-generation gangs,” plays an integral role in undermining state because they represent the highest evolution institutions. The financing of political parties of organized crime in Latin America. and/or candidates by drug money and organized crime is a direct threat to the survival of democracy in the region. Criminals have long What are the Real Problems?

First, this is more than a law enforcement used the formula of plata o plomo (money or problem or a security issue. Criminal lead) to corrupt government officials.

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Third-generation gangs have become masters of this strategy. What the gangs are doing, in essence, is seeking to intimidate the state and the citizenry into submission and win a free hand in pursuing lucrative illicit business dealings. Gangs are able to clobber the state from without and weaken it from within.

Finally, the ultimate threat of destabilizing gang activities is not instability or even criminal violence. Instead, it is either state failure or the forced imposition of a radical socioeconomic-political restructuring of the state and its governance. The gangs come in many destabilizing forms and in a matrix of different kinds of challenges, varying in scope and scale.

As Robert J. Bunker and Matt Begert point out in the journal Global Crime (AugustNovember 2006), unfortunately, most political leaders in the region are still thinking about the phenomenon in traditional terms of criminal activity, and have not yet caught up with reality.

They do not appreciate the extent and nature of the threat to political order and responsible democratic governance being raised by the slow-moving clash of two types of values. One set of values serves criminal greed.

The other seeks the general well-being.

Are there Solutions?

The problem of gang violence and criminal activities in Central America has produced a plethora of detailed studies by academics, sociologists, criminologists, security firms and agencies such as the World Bank, US AID, the Congressional Research Service, the UN Office on Drugs and Crime, to name a few. Analyses are excellent, recommendations are many, actual solutions scarce.

Noteworthy is the seeming inability or reluctance of the region’s leaders to address the systemic problems of a skewed distribution of wealth, failed tax systems, corruption, and unrelenting violence. Security, funding of political parties, justice, greater economic equality, regional cooperation, inclusive dialogue, citizen participation, and the preservation of democracy business journal | JUNE 2011

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An MS-13 suspect bearing gang tattoos is handcuffed. In 2004, the FBI created the MS-13 National Gang Task Force. A year later, the FBI helped create the National Gang Intelligence Center

have all been identified as the leading challenges to the consolidation of democracy in the region and to the neutralizing of criminality.

But one thing is clear. In no country in the region is it simply a domestic issue. At a minimum, effectively addressing the problem of transnational gangs and their impact on the security of the region requires a multi-track, balanced and integrated strategy and one that is regional in scope but with strong bi-lateral components.

Success in one jurisdiction simply transfers the problem to neighboring areas as gang members move freely between countries by legal or illegal means. The level of the gang threat has to be raised to the level of a threat to national, regional and international security.

Professor Anthony T. Bryan is a Senior Associate (non-Resident) of the Center for Strategic and International Studies (CSIS) in Washington, D.C. and a Senior Fellow at the Institute of International Relations, the University of the West Indies, St. Augustine, Trinidad.

ECLAC-UNICEF Study:

Child Poverty Affects almost 81 Million Children in Latin America and the Caribbean

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n Latin America and the Caribbean, 45% of children are affected by at least one moderate to severe deprivation, which means that almost 81 million people aged under 18 suffer from child poverty, according to a study by the Economic Commission for Latin America and the Caribbean (ECLAC) and the United Nations Children’s Fund (UNICEF).

The study ‘Child poverty in Latin America and the Caribbean’, which develops rightsbased measurement and diagnosis of child poverty in the region and seeks to put forward public policy recommendations to overcome the problem, points to a very uneven situation among countries.

In Bolivia, El Salvador, Guatemala, Honduras and Peru, over two thirds of children are poor while in Chile, Costa Rica and Uruguay, fewer than one in four children live in poverty.

The study, carried out between 2008-2009, measured multiple dimensions of child poverty in Latin America and the Caribbean, linking each one to compliance with the International Convention on the Rights of the Child, which came into force in 1989.

The study took account of factors such as nutrition, access to drinking water, connection to sanitation services, quality of housing and the number of people per room, school attendance and access to information and communication media, as deprivation thereof contributes to a frame of poverty and social exclusion.

The analysis also considered the level of household income and the potential capacity of these resources to meet their basic needs.

In the preface to the document, Alicia Bárcena, Executive Secretary of ECLAC, and Bernt Aasen,UNICEF Regional Director for Latin America and the Caribbean, state that “in order to eliminate the scourge of child poverty, governments must integrate social policy, employment policy and macroeconomic policy.

This requires allocating greater resources to promoting children’s rights, providing a protective environment, increasing the provision and quality of services, as well as extending social protection systems”.

In terms of public policy, the report states that overcoming child poverty involves investing in childhood and reducing the ongoing socioeconomic, territorial, ethnic and gender inequalities in all the region’s countries. This process must be implemented from the earliest age, so as to break the intergenerational reproduction of poverty.

Lastly, the study describes the multisectoral public interventions that should be introduced in order to eliminate child poverty, in particular by guaranteeing the right to food, health, water, sanitation, education and information.

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Guest Commentary Crime and Violence can be Managed

By Adam Blackwell Secretary of Multidimensional Security, OAS

In a 2009 document published by the Inter-American Observatory on Security at the OAS, it was reported that more than 366,000 violent deaths occur each year in the Americas. Among them, 133,813 were victims of intentional homicide.

This results in an average of approximately 366 deaths a day, 15 per hour, and one every 4 minutes.

While global crime statistics are not completely flawless, the above figures illustrate that the Americas is one of the most violent regions in the world.

The situation of the Caribbean countries with regard to violence and criminality is just as serious as the rest of the Americas, and in some cases even more so. In 2009, the member countries of CARICOM had, on average, a rate of 39.47 cases of deliberate homicides per 100,000 inhabitants. This places them among the highest rates in the region, slightly below the countries of Central America, which in 2009, had an average rate of 41.37 cases of intentional homicides per 100,000 inhabitants.

These figures are disconcerting for the Americas in general and the Caribbean in particular. However, the information provided by the Inter-American Observatory on Security at the OAS, allows us to conclude that while criminal activity in the Americas has expanded in scope and importance, we are not facing a security crisis spiraling out of control.

For example, from 2000-2010, the total number of intentional homicides rose from 130,003 cases in 2000, to 133,837, while still too high it is an increase of only 2.9 percent.

However, taking into account population growth in the Americas over the corresponding period, the rate of homicides per 100,000 inhabitants

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actually decreased from 16.19 in 2000 to 14.94 in 2009.

We can also conclude from data gathered by the Inter-American Observatory on Security that this phenomenon is affecting countries differently. For example, crime and violence is concentrated in specific countries and in regions of countries. While the intentional homicide rate increased in 19 countries in the Americas during the decade (including Antigua and Barbuda, Belize, Dominica, Guyana, Jamaica, Saint Kitts and Nevis, Saint Lucia and Trinidad and Tobago), six countries (including The Bahamas Barbados and St. Vincent and the Grenadines) remained the same , and eight countries (including Grenada and Suriname) reduced their rates.

The other lessons that we can draw from the OAS Inter-American Observatory , is that while there has been a growth in domestic violence and femicide, the criminal phenomenon we face today is more associated with the activities of transnational organized crime. In countries, and regions within countries where it is possible to detect the presence of organized crime, there are greater manifestations of violence and associated criminal activity.

So how are we trying to manage crime and violence in certain countries and regions?

It is important to keep in mind that the direct actions of crime and violence, most importantly transnational organization crime, must be addressed promptly and fought directly. Some of the tools involve appropriate and wellimplemented policies in law enforcement, the judiciary, and penitentiary systems.

In the Americas in general, and the Caribbean in particular, certain countries that have higher concentrations of well trained police officers per 100,000 inhabitants, coupled with higher rates of incarceration and reintegration programs have seen a reduction in the number of cases of intentional homicide. It should be noted, that this is true of Grenada, Saint Vincent and the Grenadines, the Bahamas and Barbados.

We have also been focusing on preventive measures, specifically activities designed to help young people with vocational training and employment opportunities in an effort to decrease the occurrence of drug dependency and the risks of violence. One of the ways that the OAS supports these activities is through POETA: the “Partnership in Opportunities for Employment through Technology in the Americas.�

As one of the Trust for the Americas’ largest projects, supported by corporations such as Microsoft, POETA has provided assistance to over 250,000 people in 21 countries in Latin America and the Caribbean. Some other projects worthy of mention are initiatives that target violence by identifying vulnerable regions in cities, and building better infrastructure and encouraging community organization to address crime and violence in their neighborhood.

Overall, we believe that so long as member states continue to prioritize agendas that promote social and economic development, foster the creation of job employment, and

create the appropriate policies to create greater education and vocational opportunities for youth, the high rates of crime and violence will recede.

We must also keep in mind that transnational organized crime can only be effectively addressed and combated through a coordinated and transnational response.

This understanding led to the establishment of the San Salvador Declaration of the 41st OAS General Assembly, defining the basis for a common security policy, and combining plans to tackle and combat the transnational causes of crime.

This Declaration gives a strong mandate to take to the very important Third Meeting of Ministers of Public Security of the Americas (MISPA III), which will be hosted by Trinidad and Tobago in November this year and which is expected to approve a regional plan of action.

Official information compiled by the InterAmerican Observatory on Security at the OAS, demonstrates that where there has been a systematic effort by the State and the community, crime and violence can be managed. Therefore, regional coordination standard such as, the ones promoted by the OAS, should complement the national policies of each country. We should also be optimistic that within the next few years, our efforts will prevail, and the threat of crime and violence, especially the contemporary threat posed by transnational organized crime, will finally be reduced.

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An abridged version of a speech delivered by JosĂŠ Miguel Insulza, Secretary General of the Organization of American States (OAS) at the closing gala dinner of the Caribbean Investment Forum in mid-June in Port of Spain, Trinidad and Tobago

In previous recessions, the economic contractions in North America and Europe negatively affected Latin America, but many countries, particularly such emerging economies as Brazil, the Dominican Republic, Paraguay, Peru and Uruguay, have continued to experience positive growth - a strong signal of their resilience. We used to be the first to fall and the last to recover. Now the situation is changing for the better.

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n much of CARICOM, weak external demand and high public debt levels have held back economic activity for the last two years.

But the good news is that the economies of the Commonwealth Caribbean are projected to expand by an average of about 2 percent in 2011. And in Haiti, reconstruction efforts are expected to take growth above 8 percent this year.

While Foreign Direct Investment inflows to developed countries decreased further in 2010 due to the financial crisis, Latin America and the Caribbean experienced an increase of 20 percent to reach US$140 billion, mainly in the oil and gas, metal mining and food and beverages industries, sectors that are very strong in CARICOM.

Even though for the first time in its history, Latin America and the Caribbean achieved during the past decade a combination of high growth, macroeconomic stability, poverty reduction and improvement in income distribution, endemic poverty and inequality continue to be unacceptably high in our hemisphere. business journal | JUNE 2011

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Against this background, trade and investment are powerful tools for development.

In our hemisphere, trade contributes significantly to development. 85 percent of OAS Members had a trade-toGDP ratio of above 50 percent in 2009. Trade is at the heart of the interdependence that binds us together within the Americas and with the world. Since 1994, more than 60 free trade agreements have been signed by countries of the region. To expand their trade opportunities, OAS countries have also reached out to non-hemispheric partners, including the European Union, China, India, Japan, and South Korea.

Here in the Caribbean, the 2008 CARIFORUM-EC Economic Partnership Agreement was a watershed event. The current negotiation of a trade and development agreement with Canada may also represent another opportunity for CARICOM to reap the benefits of international trade and investment.

The OAS is assisting the Caribbean in its efforts to increase trade and investment and is supporting the implementation of the EPA, particularly in Belize and the OECS. We are also providing support to CARICOM’s Office of Trade Negotiations in the services and investment areas.

Trinidad and Tobago has a vital role to play in fostering trade and investment between Latin America and the Caribbean. This country was at the forefront of the efforts which led to the signing of the CARICOM-Costa Rica FTA a few years ago. MERCOSUR countries have recently shown interest in increasing their trade and investment flows with CARICOM.

Last year, at the first Summit between Brazil and CARICOM, held in Brasilia, then-President Lula of Brazil noted that the time “was ripe” for an FTA between CARICOM and MERCOSUR.

Prime Minister Kamla Persad-Bissessar led a trade mission to Brazil in April this year, to discover and promote new markets for Trinidad and Tobago goods and services, to benefit from Brazilian expertise in food technologies and agribusiness, to learn from the Brazilian model of development, and overall to forge relationships and partnerships From left to right: José Miguel Insulza, OAS Secretary General and Kamla Persadbetween entrepreneurs, scientists, Bissessar, Prime Minister of Trinidad and Tobago.

Photo courtesy: OAS engineers and people. We need more such initiatives.

While traditional trade barriers have

Taking advantage of trade and been mostly eliminated in Latin America and investment opportunities however remains an Caribbean, other less visible barriers remain. unfinished business in Latin America and the According to the IDB, logistics costs incurred Caribbean. According to the UNDP 2005 Human in the distribution of goods and services now Development Report, “Even the best trade rules range between 18 and 40 percent of GDP in will not overcome the structural inequalities the region, as compared to 9 to 10 percent within countries that prevent the poor from for OECD countries. This represents in many capturing a fair share of the prosperity generated cases more than half the price of these goods by trade.” and services. A weak physical infrastructure

So governments are faced with another compounded by a lack of investment and a very complex challenge: how to assist their economic burdensome regulatory framework help explain agents, particularly micro, small and medium- this phenomenon.

The World Bank’s Doing Business 2010 sized enterprises (MSMEs), women and vulnerable groups to benefit from expanded highlights that Latin America and the Caribbean markets for their goods and services? is well behind other regions in terms of the costs

At the OAS, we are aware of these related to trade. For instance, on average, it challenges. We have expanded our trade takes twice the number of days to export from capacity building programme, which has our region than from OECD economies, and we traditionally focused on the negotiation and spend on freight nearly twice as much as the US implementation of trade agreements, to design to import their goods. These high transportation a programme aimed at strengthening the costs are preventing our region from reaping capacity of institutions that provide services all the benefits of international trade and are to MSMEs (with a special emphasis on women hurting the productivity of our economies. We entrepreneurs), promoting their productivity and need to do better.

We also need to be more competitive. competitiveness, to increase the participation of MSMEs in the benefits offered by expanded A recent IDB study has shown how low markets. productivity growth is the main reason most Latin American and Caribbean countries have 24

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not grown as fast as developed countries and peer countries in East Asia.

The development of infrastructure in Latin America and the Caribbean is another major challenge ahead. Better infrastructure will attract more investment and expand intraregional trade, which is currently just 20 percent of total trade, versus 75 percent in the EU. The region lags behind others in terms of public investment in infrastructure.

The development of human capital for competitiveness is also critical. We need a major education overhaul to prepare for an increasingly dynamic and changing world. We have a high percentage of young people with great ability to adapt to changes and innovations.

The development of our workforce will depend on our effectiveness to adapt our education systems and technical training to the conditions of a competitive environment requiring specialized skills.

Innovation has the potential to accelerate our productivity and our progress. One key component for the next phase of economic growth is the role of knowledge and intangible assets. The innovative capacity of individuals and entrepreneurs in our region offers an important potential to increase economic opportunities, and we should foster ties publicprivate partnerships and business alliances within and across our sub-regions.

There are three major challenges facing our hemisphere. First, there is the weakness of a few states, whose institutional deficiencies are exacerbated by their having to meet the social demands of their populations. The installation of a new democratically elected government in Haiti led by President Michel Martelly is a sign of hope.

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The second challenge is that the hemisphere continues to be one of the most unequal regions in the world. As noted above, trade and investment are powerful tools for development and the OAS has a support programme for MSMEs.

The private sector is also doing a lot in the sphere of corporate social responsibility to address inequalities and to assist in community development, job training and social empowerment.

There is scope for the OAS and the regional private sector to do more in partnership.

Hernån Rincón, the President of Microsoft Latin America, spoke at the opening ceremony of the Caribbean Investment Forum about the partnership with the OAS on POETA – the Partnership in Opportunities for Employment through Technology in the Americas. We would like to expand this programme in the Caribbean and we invite the regional private sector to come on board.

The third challenge is that crime is consistently mentioned in surveys as the problem of greatest concern to the peoples of the region. The outcome document of the recent OAS General Assembly in El Salvador, The Declaration on San Salvador on Citizen Security in the Americas, commits all OAS Member States to cooperative mechanisms and actions in fighting this scourge. We have no choice but to work together to make progress.

It has been said that this is the decade of Latin America. If so, then this is an opportunity for the Caribbean countries to make it the decade of Latin America and the Caribbean. The CIF, hosted by Trinidad and Tobago, standing at the gateway between the Commonwealth and the Americas, is a step in the right direction.

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Column Mining and Mineral Resources in ACP Countries: Ending Exploitation; Ensuring Sustainability

By Ambassador P.I Gomes

When Ministers responsible for the Development of the Mineral Resources Industry of the African, Caribbean and Pacific (ACP) Group held their First Meeting in Brussels from 13-15 December 2010, it was an historic event of far-reaching significance.

This is primarily due to the fact that the wealth of many ACP countries, other than residing in the outstanding talent and ingenuity of their people, is to be found in the enormous value of their minerals. Consider, for example, in continental Africa- the gold and diamonds of Botswana and the Democratic Republic of Congo (Kinshasa); or the islands and mainland countries of the Caribbean and Pacific -- with bauxite and alumina from Suriname and Papua New Guinea.

The Ministerial meeting examined perspectives and prospects of the Mining Sector in economies of ACP States with a view to maximising benefits for their populations.

Background documentation included the African Mining Vision, the role of the Mining Sector in negotiations of Economic Partnership Agreements (EPAs) between the ACP and European Union(EU) as well as the EU’s “Raw Materials Initiative” .

The outcome of the Meeting can be found in the Brussels Declaration on the Sustainable Development and Management of the Mineral Resources Industry of ACP States (2010) and a Draft Framework of Action.

Quite fortuitously, the ACP Council of Ministers at their 93rd Session, as recent as the 26-29 May 2011, adopted a Decision (No.3/XC111/11) that further reinforced the prominence of this area by which to advance

Interested readers would find the relevant documents in “An Overview & Perspectives for the Mining Sector” as ACP/89/009/10 available on www.acp.int to which these remarks are heavily indebted. business journal | JUNE 2011

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regional and national strategies for the mining and minerals sectors and their positive contribution to the structural transformation of ACP economies.

A few remarks are presented on the historical and economic context in which this matter can be situated, followed by highlights of the Declaration and Action Framework and suggestions for further action.

Background & Context The historical evidence abundantly reveals that over the many centuries of colonial conquest and settlement, or through contemporary neo-colonial exploitation by Multinational Corporations (MNCs), the mineral wealth of the ACP has disproportionately accumulated to fuel and furnish the industrial expansion of Western capitalism.

Rather than the eradication of poverty in the ACP, and also more recently, the expansion of trade and investment in ACP mining sectors has been stimulated by rapid economic growth in, and to, the advantage of Asian societies, primarily China and India. This longstanding process of raw materials mining and mineral extraction of primary exports continues a questionable, extensive and unacceptable loss of benefits to ACP States.

In light of this prevailing condition, the importance of regular radical reflection on the mining sector of ACP economies can be easily seen from the twin aspects of demand and supply.

Firstly, there is at present, the increasing global demand for minerals, given the essential role minerals play in any economy, especially in the capital goods sector for industrial machinery of all kinds.

From the mid-1990s, the world production of 14 major minerals grew from 1 million metric

tonnes to about 2.5mn tonnes by 2008 . If not on such a scale of almost 200% in the last decade, global demand is expected to increase significantly as the world population reaches nearly 9 billion around 2050.

In the case of iron ore, aluminum and copper, demand is expected to double over the next 15-20 years and in turn requires a significant supply response as urbanisation increases. While this occurs, the phenomenon of mega-cities and urban sprawl entails transport, communication systems, buildings and equipment that will devour the hardware from minerals, many of which are found in abundance in the ACP Group, particularly Africa.

For the moment I will refrain from discussing the enormous appetite for metals and minerals in the war machines of the military industrial complexes in the West and East in expansionist modes for hegemonic control.

The endowed assets by which to meet these global demands constitute the underlying material base from which ACP States derive their specific comparative advantage in metals trade. For instance, in 20 ACP countries, exports of minerals are more than 20% of their total exports. As indicated in the Africa Mining Vision: “Unfortunately, most of Africa’s minerals are exported as ores, concentrates and metals without significant value-addition.

There is thus a large potential for mineral beneficiation….” In addition, “Africa is the world’s top producer of numerous mineral commodities and has the world’s greatest reserves of many more, but most of Africa still lack systematic geological mapping which could bring to light a much greater resource base.”

As in Africa, so also with other ACP countries possessing extensive mining and oil resources, the underlying concerns of the Brussels Declaration and Action Framework are to optimise the use of these resources in support of sustainable development of ACP states.

The Brussels Declaration The Declaration is based on comprehensive proposals from a wide range of expertise in the mining and mineral resources sector of ACP Member States.

See Patrice Christman, “Importance of the Mining Sector for the Economies of the ACP Countries” presented at Ministerial Meeting, 15 December 2010 (cf www.brgm.fr)

At the heart of the Declaration is the “formulation and implementation of an ACP Strategy for Mineral Resources Development and Cooperation Support.” This clearly acknowledges the need for coherence to undergird the strategy and shows how development cooperation assistance, both technical and financial, ought to be garnered to ensure that the strategy is effectively implemented.

The strategy explicitly recognizes that “mineral assets” as capital stock in a society’s development are “non-renewable resources”.

Hence “..given the non-renewable nature of these resources, it is important to invest mineral wealth in other forms of sustainable capital, namely: human, social, physical and economic, that can outlast the currency of mining”.

Within this perspective, by which to view the mineral resources of ACP countries as well as for hydrocarbons - oil, gas and petroleum-based products, as in Trinidad and Tobago, Suriname and other Caribbean economies, the Declaration reiterated a policy, well-known for many years, that “resources-driven industrialization must be considered a priority”.

But ensuring sustainability and accepting environmental responsibility are major features of the Declaration and Action Framework.

Hopefully, the pertinent insights and strong political commitment to ground policies in a suitable Framework for Action, as proposed by the Meeting would prove to be a radical departure from another mere “statement of principles”.

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Next Steps: Designing an Intra-ACP Programme for Mining & Minerals Development The fundamental importance for a systematic, coherent and efficient implementation of the “framework of action” on ACP mining and minerals industry is fully acknowledged. This, in my view, should benefit from a phased approach, learning from past experience and pursuing innovative measures. The “African Mining Vision” provides a platform on which to build an All-ACP Programme for Mining and Minerals Development.

By the Council Decision No.3/XC111/11 of 29 May 2011 a mandate has been given for the Committee of Ambassadors to seek funding to implement the Action Framework and to collaborate with national Focal Points.

At the outset, a useful first phase could

comprise an inventory of current actions and proposals in the six ACP regions that address the status and institutional mechanism that address the critical areas of: a. geological data acquisition and functioning of geo-scientific information systems; b. legislative and regulatory measures for development of small and medium-scale mining; c. investment promotion and accompanying environmental stewardship proposals and, d. integration of geology and mineral resources in land-use planning and infrastructure development. Informed by the relevant data in these areas, a Programme Design Workshop could be convened from which a fundable proposal for a public private partnership should be available.

The overriding cross-cutting dimension of training, research and innovation in higher education and research institutes of ACP countries remains a permanent priority. This would reinforce the primacy of our human resources – the people of this and future generations in the ACP Group – by whom and for whom the eradication of poverty shall be realized.

Dr. P.I Gomes is Guyana’s Ambassador to Brussels

Source: Africa Report on the Underground Economy. October - November 2010 business journal | JUNE 2011

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SIR ROYSTON RECEIVES CARIBBEAN LIFETIME ACHIEVEMENT AWARD

Sir Royston O. Hopkin, KCMG, owner and chairman of Spice Island Beach Resort in Grenada has received the ultimate honor from Caribbean governments with the Caribbean Tourism Organization (CTO) Lifetime Achievement Award for 2011.

He is the first hotelier and Grenadian to receive this accolade from the governments which follows his being knighted by Her Majesty Queen Elizabeth II as well as a Lifetime Achievement Award from the Caribbean Hotel & Tourism Association (CHTA).

He was presented with the prestigious CTO Lifetime Achievement Award at the Rhythms of the Caribbean Ball at the Plaza Hotel in New York on June 10.

In photo above: L. - r. CHTA Director General & CEO Alec Sanguinetti, Prime Minister of Grenada, Tillman Thomas, Sir Royston Hopkin and Senator Hon. Ricky Skerritt, Chairman of CTO.

The Director General of the Inter-American Institute for Cooperation on Agriculture (IICA), Víctor M. Villalobos presented the institution’s 2011-2014 plan for the countries of the Caribbean Community (CARICOM) in a meeting held at the Organization of American States (OAS) in Washington, DC on June 20.

Director General Villalobos said the programme has four principal objectives: to promote agricultural productivity; to improve the sanitary aspects of plants and animals; to support agribusinesses and agricultural tourism and to face climate change and promote agricultural productivity for food safety. The head of IICA was accompanied by IICA’s Associate Deputy Director and Representative in the United States, David C. Hatch, and by the representatives of the delegations to CARICOM of Antigua and Barbuda, Bahamas, Barbados, Grenada, Guyana, Haiti, Jamaica, Suriname, and Trinidad and Tobago.

Photo: L. - r.: Víctor M. Villalobos, Director General of the Inter-American Institute for Cooperation on Agriculture (IICA), Duly Brutus, Ambassador, Permanent Representative of Haiti to the OAS and Lylen Ann Scott, Interim Representative of Jamaica to the OAS

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Trinidad and Tobago tells IMF to focus on Small States

• Trinidad and Tobago’s Minister of Finance, Winston Dookeran who is also Chairman of the World Bank Small States Forum wants the voice of small economies to be heard in the International Monetary Fund (IMF).

“We ask the new leadership of the IMF to give a credible attention and voice to the economic, monetary, and political challenges of small states and their economies,” Mr. Dookeran said in a letter dispatched to the IMF.

“While we welcome the improvements made to the lending facilities of the Fund in the last two years (with the introduction of the Flexible Credit Line, the Precautionary Credit Line, the Post Catastrophic Debt Relief Trust and the reform of the concessional lending facilities to Low Income Countries) nonetheless, a gap persists, as concessional financing for Small States are still inadequate.”

He said recent developments in the Caribbean and other regions have revealed the additional fragilities and vulnerabilities of small states to natural disasters, the collapse of financial institutions and the concentration of economic activity.

Issues impacting small economies must be part of shaping the manifesto for the candidates of the IMF, according to Mr. Dookeran, who identified some areas of concern: business journal | JUNE 2011

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Changes to the international architecture in which the IMF and G20 sit, lends itself to a potential contravention of natural justice where clubs of large countries sit and develop rules for smaller states to follow without adequate consultation, consideration and engagement with small states; • the development of international financial regulation, supervision, risk management and the assessment of financial sectors, does not support a level playing field between small and large states, and that the preferential treatment given to areas important in some large states, from mortgages, regional banks to hybrid capital, treatment that proved so dangerous in the financial crisis, also penalizes institutions in small states beyond economic justification; • while small states particularly need help in the financing of infrastructure, the criteria of lending by the multinational institutions is better suited to larger states with capital markets, credit ratings and diversified private sector players; • the criteria used for long-term and short-term support, pays too much attention to level of GDP per capita, and not sufficiently to the much high levels of fragility and vulnerability to natural and economic shocks; Addressing these issues may require a new leadership position in the IMF focusing on the challenges of small economies.

Profile NEW ENERGY MINISTER IN TRINIDAD AND TOBAGO

A New Minister of Energy and Energy Affairs in Trinidad and Tobago, 39-year old Senator Kevin C. Ramnarine was appointed following a major reshuffle of the Cabinet by Prime Minister Kamla Persad-Bissessar.

Up to the time of the announcement, Senator Ramnarine was the Parliamentary Secretary in the Ministry of Energy.

He has replaced Carolyn SeepersadBachan who was shifted to head the Ministry of Public Administration.

Senator Kevin Ramnarine

About Senator Ramnarine Senator Ramnarine was an Energy Research Specialist at the South Trinidad Chamber of Industry and Commerce now the Energy Chamber where he worked on a range of policy issues impacting the national energy sector including fiscal reform, natural gas reserves, local content, downstream development and the strengthening of the local energy services sector.

Senator Ramnarine describes his time at BG T&T as extremely valuable to his professional development in terms of giving him an in-depth knowledge of the workings of a multi-national oil and gas company. At BG T&T he was exposed to Production Sharing Contracts (PSC’s), natural gas pricing, project economics, production optimization, business planning, opportunity screening and determination of natural gas reserves.

He later went to work with Trinidad and Tobago’s second largest producer of natural gas BG Trinidad and Tobago (BG T&T) as a Lead Economist for the East Coast Marine Area (ECMA) – one of the most prolific gas producing acreages in the country.

Senator Ramnarine graduated from the University of the West Indies with a B.Sc. degree in Chemistry and a M.Sc. degree in Petroleum Engineering. He also has an International MBA from the Arthur Lok Jack Graduate School of Business.

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Guest Commentary

Reinventing Petrotrin

By Ken Allum, President, Petrotrin

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he year 2010, and 2011 to date have presented a global upstream and downstream economic environment that remains volatile and uncertain.

Natural disasters and the worldwide financial meltdown continue to wreak havoc on the economic fortunes of major nations as well as on the predictions of energy experts concerning energy markets.

Recently the Government of Trinidad and Tobago installed a new Board of Directors which has instructed the Company to revisit its business fundamentals.

Petrotrin has responded to the government’s challenge to increase efficiency, eliminate waste and boost oil production. The Company has gone further to reinvent itself in order to hedge against future uncertainties.

The Company is seeking to strengthen its business fundamentals in order to function more effectively in current dynamic and volatile global energy scenario.

The Company has also developed a short term strategy in order to quickly improve its economic outlook. Basically, Petrotrin’s overall strategy focuses on the following core deliverables: • • • • •

Increasing Equity Crude Production Improving Refinery Efficiencies Completing the Clean Fuels Programme Reducing Cost throughout the organization and Improving our HSE Performance

3D Seismic on North Western District At the moment Petrotrin is faced with the challenge of arresting and turning around its business journal | JUNE 2011

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declining crude oil production. We believe that new drilling opportunities abound on our extensive mature land fields. To this end we have just completed an extensive 3D seismic survey on our mature land acreage in the North Western District and have commenced interpretation of the vital data collected in order to guide and refine our land drilling programs.

Apart from the 3D seismic, drilling and workover programmes continue to be the main mechanisms through which Petrotrin seeks to increase production in its core fields.

Additionally, various other optimization and enhancement initiatives have been implemented throughout the various fields.

Trinmar Forward Drilling Programme The Trinmar holdings currently comprise the Petrotrin asset with the greatest short term potential for increased production and consequent enhanced indigenous crude supply to the upgraded refinery at Pointe-a-Pierre. A sizeable volume of technical studies already exist on this acreage which posses significant exploration potential.

In March 2011 Petrotrin resumed an aggressive round of drilling activities in Trinmar’s Soldado Fields after a hiatus of almost three years. During the first year of the forward drilling programme, a total of 21 wells are carded to be drilled in Soldado’s North, Main and East Fields. The production from these new wells is expected to yield an increase of 2,000 barrels per day in the first instance. The Trinmar Forward Drilling Programme is of key strategic importance to Petrotrin and to the country as a whole. Petrotrin is also proud to be one of the first upstream operators to return to active offshore drilling after the steep decline in offshore activity of the last few years.

Trinmar’s Generation Platform (GP-2)

Trinmar’s Generation Platform (GP-2)

Trinmar’s Compressor Platform 4

Gasoline Optimization Project and the Ultra Low Sulphur Diesel Project At our Pointe-a-Pierre refinery the Clean Fuels Program which comprises the Gasoline Optimisation Project and the Ultra Low Sulphur Diesel Project, is well on its way. The GOP which started 4 years ago will be completed by mid next year while the ULSD project which commenced construction earlier this year will be completed by mid 2012.

Petrotrin’s GOP for its Pointe-a-Pierre Refinery will improve the viability of the refinery and allow the Company to maintain and increase its market share for gasoline Oil and gas prices have improved and Petrotrin is moving quickly to take advantage of market opportunities which are available.

We are also looking forward to the completion of the new Ultra Low Sulphur Diesel Plant which will enable Petrotrin to meet more stringent diesel quality specifications in the local, regional and international markets.

HSE Reviews HSE reviews and audits continue to be carried out throughout Petrotrin’s operations in order to ensure compliance with statutory HSE obligations. Non-conformances identified are being constantly addressed and rectified.

Trinmar’s Compressor Platform 4

Joint Ventures Petrotrin continues to use joint venture arrangements to conduct most of its exploration activities. This strategy allows the Company to increase its indigenous crude and gas supply; spread risk and harness the experience, technology and capital resources of other major players in the upstream business.

Cost Reduction Initiatives The Company continues to improve its management and control systems in order to affect increased efficiencies in its cost performance. There is an emphasis on sharing best practices across divisions in order to identify those processes that increase productivity and reduce cost. Initiatives to improve energy efficiency in the Refinery and in the exploration and production fields have also been implemented.

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JUNE 2011 | Business Journal

Guest Commentary Lake Asphalt of Trinidad and Tobago (1978) Limited

By Kuarlal Rampersad, Chairman

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ake Asphalt of Trinidad and Tobago (1978) Limited (Lake Asphalt) is the Company charged with the commercial development of the Pitch Lake of Trinidad and Tobago, the world’s largest deposit of natural asphalt.

The lake is situated in the South Western community of La Brea and covers approximately 100 acres and is estimated to be 250 feet in depth. History has it that Sir Walter Raleigh discovered the Pitch Lake in May of 1595 when he used the asphalt to caulk his leaking ships.

There are many myths and legends associated with the Pitch Lake that helps to form our rich history, the lake which produces our raw material has been described for centuries as “a Unique Geographical Phenomenon” as its complex emulsion of water, gas, bitumen and mineral matter is such that most people have a vague understanding of the nature of this unusual material.

We are a publicly owned company under the auspices of the Ministry of Energy and Energy Affairs (MEEA) and have been in operation for over 100 years beginning as a private sector operation with Government assuming responsibility for just over thirty years.

Lake Asphalt is known internationally as the producer of Refined Trinidad Lake Asphalt (TLA), our flagship product, which is recognised around the world as the superior modifier for refinery bitumen.

TLA has been used on every continent in the world over the past century in a number of applications. The product meets market

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specifications and conforms to the American Society for Testing and Materials (ASTM International) standards including the Performance Graded (PG) system.

In the United Kingdom, specification for TLA have been met under the British Standard Institute (BSI), in Japan TLA has achieved specifications for use on bridge decks and in the People’s Republic of China, TLA standards exist for use on highways and airports.

The company is continuously involved in cutting edge research and development and it is via this that we ensure that our competitive advantage is maintained as well as our commitment towards maintaining the reputation that our products enjoy on the international market. To date the organisation holds over twenty (20) patents, the most significant of which is the patent for Pelletized TLA. Therefore to say that TLA is a world class product is no understatement.

Lake Asphalt’s mission is to be a profitable dynamic company of high integrity, providing quality asphalt products surpassing customer and stakeholder’s expectations, empowering dedicated and satisfied employees and working in harmony with our community and environment.

The organisation is involved in the mining, refining, manufacture and distribution of high quality road building materials and other asphalt related products,

Apart from the world famous TLA there is also Pelletized TLA (pTLA), five types of bitumen emulsions, bitumen and the Lasco range of products which include; Bituminous

Black Paint- an anti-corrosive coating, Auto Under Body Coating- a coat used for the protection of under body carriages and internal joints and seams, Sealant which is a water proofing compound ideal for repairing cracks and seams in concrete wall, floors and roofing and Pipe Guard which is a high quality coating designed specifically to protect metal and line pipes, tubing, drill lines and casings in underground and above ground storage.

In 2009 the largest single investment in research and development in the company’s history was made at the well-recognised and highly respected National Centre for Asphalt Technology (NCAT) at Auburn University in Alabama.

This investment takes the form of a test strip (200 feet) with intelligent devices placed to monitor various performance parameters of the pavement. Our organisation is one of just twenty organisations including Government Agencies and Material Suppliers involved in the current cycle of the evaluation program at the test facility.

Lake Asphalt distributes internationally to China, which to date is the largest market, Japan, Germany, United Kingdom and the United States of America. Regionally to St Vincent, Suriname, Barbados and Guyana. Of course our products are also used on the local market.

Some of the major projects include: Trinidad and Tobago:

Piarco International Airport Rehabilitation Crown Point Runway Extension

U.S.A. J.F.K. International Airport

La Guardia Airports

Logan International- Boston

George Washington Bridge

The Lincoln Tunnel

Seagirt Marine Terminal, Baltimore, Maryland

Japan Kansai Airport

Capital Airport

Honshu Shikoku Bridges Yokohama Bay Bridge

Mount Tateyama and Nakayama Bridges England

Buckingham Palace Mall Central London M-4 Motorway Humber Bridge

Denmark

Germany

Copenhagen International Airport Hot mix Asphalt for Autobahns and Bridges within The cities of Berlin, Frankfurt and Munich

Austria

A13-Bremmer Autobahn

China

Beijing Ring Roads Cross Harbour Tunnel – Hong Kong All roads leading to the 2008 Olympic Stadium Site

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JUNE 2011 | Business Journal

Advertorial NGC – IMPROVING COMMUNITY LIFE

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ver the past seven (7) years, stateowned National Gas Company of Trinidad and Tobago (NGC) has been quietly and systematically aiding the improvement of a number of communities in Trinidad and Tobago through their Facilities Development Programme.

Focusing on eleven communities stretching from Guayaguayare to Point Fortin which were impacted by its construction projects, NGC in 2004 undertook a needs assessment where the main social issue identified was for the upgrade and or construction of community facilities.

Armed with this data the Company identified nine major projects and after ensuring no duplication of proposed projects by the Government of Trinidad and Tobago, NGC got down to work.

The projects involved the development and upgrade of facilities used for education and training, social services, arts and culture, recreation and community gatherings. The following projects were carried out between 2009 and 2010: • • • • • • • • •

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The Upgrade of the Guayaguayare Community Centre The Helena Charles Home for the Aged, La Brea New Life Ministries (NLM) Drug Rehabilitation Centre, St. Augustine Police Youth Club/ Scouts/ Lions (PSL) Centre, Couva Couva Joylanders Pan Theatre, Couva Lower Barrackpore Recreation Grounds, Barrackpore Phillips Transition Home, Couva – targeting youth, 18-25 years Youth Training Centre (YTC) Arouca YMCA Aquatic Centre, Lowlands, Tobago

JUNE 2011 | Business Journal

The rehabilitation centre of New Life Ministries and the YMCA Aquatic Centre in Tobago were also undertaken as special projects.

Collaborations NGC established multi-partite relationships with several organizations including village councils, faith-based organisations, NGO’s, corporate entities as well as Government agencies to carry out the community based projects.

NGC identified the requirements from the perspectives of Finance, Technical, Administrative Resources and Competencies.

It then engaged in negotiations to determine and outline the degree of collaboration between itself and the agencies, roles and responsibilities of the parties, before signing Memoranda of Understanding.

NGC’s contribution spans all the areas of participation and usually takes the form of project management/procurement, design and construction, and partial or full financial contribution.

Understanding that sustainability is vital in any initiative aimed at developing communities, NGC’s project selection ensures there is an entity to administer and maintain the facility when completed and handed over to the community it is intended to serve. Thus far the facilities are sustainable for the long term due to: • Income earning capability • Job creation/human development capability • Culture sustainability • Recreation Keeping Track Meeting targets is critical to the success of NGC’s Facilities Development Programme and requires arduous planning, management and utilization of resources.

The Programme is also integrated into the Company’s business planning cycle with appropriate human resources, performance targets and budgets.

The projects earmarked for completion during a year are recorded and tracked in the Company’s Balanced Scorecard with accountabilities and responsibilities clearly identified. NGC’s Community Relations Department has a Facilities Construction Coordinator responsible for the delivery of the projects within the objectives outlined in Memoranda of Understanding which also spell out the roles and responsibilities, levels of financial, technical and supervisory contributions to be made by each partner.

Giving Back NGC is developing an Employee Volunteerism Programme as part of its Corporate Strategy to deepen the Company’s involvement in pipeline communities.

Opportunities will be created to have volunteers engage in post-construction work such as final site clean-up and landscaping, as well as in-depth involvement through mentorships, companionship for the aged in convalescent homes, and for board membership service to contribute and expand the management skills of the recipient organizations.

Measurement and outcomes of success With the construction of these facilities, NGC views the main measurement of successful outcomes to be based on the facilities usage by the communities they are intended to serve.

One such facility, the Guayaguayare Community Centre, is already the hub of the area. The Centre, also a bona fide Hurricane Shelter was built following world standards for such a facility. The Centre also has basketball courts which provide the youth with an outlet to expend their energy in a constructive and healthy way.

Centre prior to construction

Guayaguayare Community Centre upgrade

Other facilities that have been built and/ or upgraded, such as the Drug Rehabilitation Centre in St. Augustine, the Tobago YMCA Aquatic Centre and Helena Charles Home for the Aged, meet the needs of the communities in which they are located and make an investment for the future.

NGC, as a home-grown company, is ensuring that it can comfortably engage in its activities aware that the citizens impacted by its projects also benefit in tangible ways that make the gas industry relevant to the continued development of Trinidad and Tobago.

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JUNE 2011 | Business Journal

NEWS BRIEFS Ensurge Announces Agreement With Correia Mining Company of Guyana Ensurge, Inc. announced an Agreement with Correia Mining Company of Guyana under which Ensurge, and its Partner, GlobalMin Guyana, Inc., will process tailings at currently operating and abandoned mining sites owned

by Correia with the intention of recovering gold, platinum, palladium silver and potentially precious stones.

A detailed Operating Agreement between Ensurge and Correai will be developed shortly.

Under terms of the Agreement, Ensurge, acting on behalf of itself and GlobalMin Guyana, will design, construct and operate tailings processing facilities at Correia mines located along the Mazaruni River, a well-known source of alluvial gold.

The first of these facilities will be located at Putareng and upon establishing successful operations there, a second facility will be constructed at Olive Creek, approximately 10 miles downriver.

In exchange for granting Ensurge and GlobalMin access to tailings at its mining sites JAMPRO SAYS FOREIGN DIRECT INVESTMENTS RE-EMERGING

President of JAMPRO, Sancia Bennett-Templer, says the agency will be working to formulate a major strategy to take advantage of emerging investment opportunities for Jamaica. The JAMPRO head said international trends have shown that foreign direct investments (FDIs) are poised for recovery. She said the agency is working to ensure that the country can take advantage of these prospects. business journal | JUNE 2011

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and providing logistical support and assistance with regulatory matters, Correia will earn a 14% royalty on the value of precious metals and stones recovered and sold from those mining sites.

Ensurge will need to raise additional capital to fund the construction and tailings processing facilities for this project.

Privately owned Correia Mining Company was established in 1935 and is a major presence in Guyana’s gold and diamond mining industry, operating numerous mines.

Correia Mining is part of the Correia Group of Companies that operates gold and diamond mines, a land based transportation business (buses), an airline (Trans Guyana Airways), an international aircraft maintenance business and a fuel distribution business, all in Guyana.

Ensurge, Inc. is developing facilities in Brazil, Guyana and elsewhere to recover gold from tailings left behind at abandoned and currently operating mines.

Speaking at JAMPRO’s “Invest in Jamaica: Kingston Forum” in early June, Mrs. BennettTempler disclosed that JAMPRO will be working with the Inter-American Development Bank (IDB), and other international experts, to formulate a plan.

“We will be looking at the value proposition that Jamaica has to offer. We will be again at developing new material coming out of the analysis, and then we will be going much more strongly into the marketplace,” she stated.

She noted that foreign investments in Latin America and the Caribbean waned over the years, with reductions of about 36 to 39 per cent recorded, but recent trends show that a recovery is in sight.

OAS and UNWTO Sign Cooperation Agreement on Matters of Tourism The Secretary General of the Organization of American States (OAS), José Miguel Insulza, and the Secretary General of the World Tourism Organization (UNWTO), Taleb Rifai, signed a cooperation agreement to strengthen collaboration, the exchange of information, and collaborative work by the two organizations in activities such as consulting on issues of common interest and training in OAS Member States.

In particular, the agreement establishes a regulatory framework for: 1. facilitating collaboration in the development of sustainable tourism policies; 2. strengthening institutional governmental capacities; 3. developing and implementing projects of joint research; 4. exchanging professional personnel for the strengthening of study and research programs; 5. collecting statistical tourism data; 6. establishing competitiveness indicators; and 7. creating tourism security and media diffusion programs, among others.

The agreement was made through the OAS Department of Economic Development, Trade and Tourism, which along with the UNWTO recognizes the importance of developing sustainable tourism policies, promoting productivity and competitiveness of the entire sector, and strengthen the development of public policies for the tourism sector.

The UNWTO is a specialized body of the United Nations headquartered in Madrid, Spain, and seeks among other things the promotion and development of tourism to contribute to economic development, international understanding, peace, prosperity, and universal respect.

A ceremony to countersign this cooperation agreement will be held during the 19th Inter-American Tourism Congress to be held September 29 and 30, 2011, in San Salvador, El Salvador, with the presence of the two Secretary Generals and high-level authorities from the host country.

ALTA urges Governments to reject Unilateral EU Emissions Trading Scheme ALTA, the Latin America and Caribbean Air Transport Association, is calling on governments, its members and its industry partners, to reject the inclusion of international aviation in the EU-Emissions Trading Scheme (EU-ETS), which it considers an illegal, flawed and unjust attempt to force the aviation industry to concede to unilateral and biased measures to the benefit of European carriers.

The impending EU-ETS threatens to negatively affect the region’s carriers and cost them hundreds of millions of dollars over the first few years of implementation.

“The EU-ETS will be detrimental to the growth of aviation in Latin America and will set the industry back several years, during a time of unsteady economic performance,” said Alex de Gunten, Executive Director of ALTA.

“ALTA is a strong supporter of a global approach to the reduction of carbon emissions through proactive steps, such as the use of new technologies, fleet renewal, the improvement of operational processes, effective investment in infrastructure and the development of biofuels.”

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JUNE 2011 | Business Journal

News Briefs New Government Policy on Geological and Geophysical Data Access The Energy Chamber of Trinidad & Tobago welcomes the announcement from the Government of Trinidad & Tobago of a new policy to open-up access to geological and geo-physical data collected by companies as part of their exploration and development activities.

Similar policies in other jurisdictions have helped drive new exploration activity, especially by smaller independent producers, and led to increased production and enhanced oil recovery. Improved access to data means that companies and individual consultants with new technology or ideas can work with existing holders of acreage to identify potential new exploration and development targets and methods for increasing production.

Coupled with the tax incentives for new activity and enhanced oil recovery operations in the traditional oil sector, this change in the policy for accessing data could assist in particular with a boost in oil production from onshore Trinidad and the Gulf of Paria.

This was an issue that was highlighted in the January and February 2011 Energy Policy consultations and the Minister of Energy is to

be commended for her efforts to move this initiative forward.

While the general policy direction is positive, careful and detailed consultations with the companies which currently store data and samples are required in order to ensure the proper and fair implementation of this new policy.

The Minister’s clear statement that only raw data would be made available was necessary to avoid complaints over infringements of intellectual property, according to the Chamber.

“Nevertheless there are many other details that need to be resolved if this policy is to be properly implemented, not least the issue of who is to pay for the future storage of the data to be shared and how will access to the data be regulated and controlled.

There are a number of legal issues that may also need to be resolved. Some of these issues are complex and will require significant and detailed dialogue with the companies involved. Without this dialogue the policy is unlikely to be implemented in the shortterm.”

CARIBBEAN URGED TO EMBRACE ICT Grenada’s Minister of Finance, Nazim Burke has appealed to the Caribbean to “fully embrace” Information Communication Technology (ICT) as a tool for the development.

Mr. Burke was speaking at the UNESCO Building Caribbean Knowledge Societies Conference held in Grenada in June .

“There is little doubt that Information Communication Technology acts as a vehicle in bringing services to our people where ever they are. These services include e-banking, egovernment, e-learning and a gamut of peoplecentered interactions. Even more importantly, ICT brings with it a myriad of opportunities for employment creation, innovation and business journal | JUNE 2011

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entrepreneurship hitherto unimaginable in our region,” said Mr. Burke.

The conference brought together policy makers, ICT experts, civil society representatives, international organizations and other industry leaders to identify the issues and concerns that hinder the Caribbean from utilizing ICT to meet the stated objective of developing “knowledge societies.”

Minister Burke challenged the meeting to find ways of utilizing Information and Communication Technology to “build a society, in which all our people can access, create, utilize, share and disseminate information and knowledge. “

CCRIF Provides Scholarships to UWI in Disaster Management The University of the West Indies marked the inauguration of the UWI-CCRIF Scholarship Programme in a handover ceremony held at the Mona campus in late May. In the first year of the programme, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) has provided scholarships worth US$49,000 to six students at the University who are pursuing study in areas related to disaster management.

In his opening remarks, University Registrar, Mr. William Iton, expressed the University’s appreciation to CCRIF for the assistance to build the region’s capacity for effective disaster management. He indicated that the increased collaboration between UWI and CCRIF would result in the further development of forward-looking solutions geared towards reducing the risks created by the pronounced regional natural hazard landscape.

Dr. Simon Young, CEO of Caribbean Risk Managers Ltd – CCRIF’s Facility Supervisor, reiterated CCRIF’s interest in strengthening its partnership with UWI. He indicated that “CCRIF hopes to be able to sign a Memorandum of Understanding with UWI to work in other areas that support disaster risk reduction – for example, by providing CCRIF’s catastrophe modelling tools to the University as a means of building technical capacity in the Caribbean region in the areas of catastrophe modelling and risk management.”

Back Row, l-r – Mr. Rhon-Paul Soltau, scholarship recipient; Mr. William Iton, University Registrar; Dr. Simon Young, CEO Caribbean Risk Managers, Facility Supervisor CCRIF; Prof.

Alwyn Wint, Pro Vice-Chancellor, Undergraduate Studies; Prof. Ronald Young, Pro ViceChancellor, Graduate Studies; and Mr. Dorlan Burrell, scholarship recipient. Front Row, l-r – scholarship recipients, Mr. Kevin Douglas, Ms. Odene Baker, and Ms. Gerarda Ramcharansingh

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JUNE 2011 | Business Journal

Perspectives Many give orders, but few know how to lead

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n every business, whether large or small, once it comprises personnel, there will be personalities to deal with.

Personality, as defined by the Oxford Online Dictionary is the combination of characteristics or qualities that form an individual’s distinctive character.

A person’s personality has an effect on others. Sometimes just the presence of an individual can change or impact a group of people. This is often noticeable in the workplace. The atmosphere can change very quickly when the boss is around. That change may be for better or for worse. The personality of a boss can affect efficiency, attitude, cooperation and overall progress within a company. It would follow then that the quality of leadership impacts the whole organisation.

As obvious as that may seem, I’m sure you can think of examples where lack of effective leadership resulted in failed companies.

It can be a major challenge to get buy-in from employees. But as leadership consultant and author John Maxwell points out, “People won’t go along with you if they can’t get along with you.”

The impact of personality in the workplace involves a complex series of interactions. Each worker has to deal with himself or herself, his/ her co-workers, with customers and clients and with the boss.

These interactions are regularly tested and can be the source of conflict when it comes to delegating duties or issuing directives.

Do this!

I want this done.

Can you handle this for us?

How do you think this ought to be done?

Each of the above statements reflects a personality trait. If the order is barked out, the response may be prompt, but will probably reflect a certain amount of resentment. If, on the other hand, an order is made to sound like a request or a call for expertise, this soft-skilled

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approach invariably brings better results.

The worker carrying out the order feels better about himself/ herself in terms of being useful and he/she feels better about the person who has given the order.

There are bosses who fear that this soft-skills approach is an undermining of their position. They want to make it clear to everyone that they are in charge. They will shout and sulk, curse and accuse, order and abuse.

Some say aggression is the only way to survive in this crazy world. They believe that unless you scream your head off, no one will listen. Is that really true?

If you twist someone’s arm they may well do as you say. But will you get the best from them? On the other hand, if you interact respectfully with people, it’s much more likely they will respond to being treated like a human being and will perform with a sense of responsibility, feeling valued.

Theodore Roosevelt is quoted as saying, “The most important single ingredient in the formula of success is knowing how to get along with people.” Unfortunately, this piece of advice is sometimes ignored by employers/bosses who consider it their birthright to be in charge. This can project an air of bossiness. Such bossiness may have someone in authority, but confidence makes a person an authority. Confidence is bred of competence; it is a credential difficult to fake. You cannot order someone to trust you or demand a show of confidence and respect.

Some bosses consider themselves leaders and their employees as followers. But if you want to lead, do you do anything that would make people want to follow you? There are several differences between a boss and a leader. Sam Geist, author of, Would You Work for You, notes a few… “The boss depends upon authority… the leader on goodwill. The boss inspires fear… the leader inspires enthusiasm. The boss says I… the leader says we.”

Are you a boss or a leader?

DOMINICAN REPUBLIC, PERU AND ZAMBIA WIN AWARDS FOR PROMOTION OF INFRASTRUCTURE INVESTMENT Agencies from the Dominican Republic, Peru, and Zambia have won the 2011 UNCTAD Investment Promotion Awards.

The three equal awards were presented by UNCTAD Secretary-General Supachai Panitchpakdi and Patricia Francis, Executive Director of the International Trade Centre (ITC). They are given annually, and the focus of this year’s awards was the contribution that investment promotion agencies (IPAs) can make to infrastructure development through the attraction of foreign direct investment (FDI).

The first equal award was given to the Dominican Republic Export and Investment Centre (CEI-RD) for its role in attracting FDI and servicing investors in infrastructure, particularly a road infrastructure project, of the country to improve access to its remote areas and to support the development of its tourism and other industries.

ProInversión of Peru received the second equal award for promoting and facilitating a public-private partnership (PPP) for the construction, operation, and maintenance of a wastewater treatment plant that will directly benefit millions of people in the country.

The third equal award was given to the Zambia Development Agency for its work with different government entities in the promotion of PPPs and its role in attracting investment for a renewable-energy infrastructure project.

Together with partner organizations, UNCTAD has honored best practices in various fields of investment promotion since 2002.

The winners of the UNCTAD Investment Awards 2011 were selected on the basis of a web-based survey, which covered the participating agencies’ support to infrastructure investors, and on the basis of case studies of recent infrastructure projects for which they succeeded in attracting investment.

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JUNE 2011 | Business Journal

Enhancing Tourism Competitiveness through Government supported Hotel and Guesthouse Room Upgrades A Tourism Development Company Limited (TDC) feature

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n February 2010, the Government launched the Trinidad and Tobago Hotel and Guesthouse Room Stock Upgrade Incentive Project, as one way of partnering with hotels and guesthouses to create an environment conducive to enhanced competitiveness and development. It was developed after consultation with the Ministry of Tourism, the Tobago House of Assembly, local hotel associations and hotel and guesthouse owners and operators. This Project entails the provision of an incentive for the upgrade of the hotel and guesthouse room stock of Trinidad and Tobago to a first class level, that is, to meet and/or exceed the Trinidad and Tobago Standard - Requirements for Tourist Accommodation, Part 1: Hotels and Guesthouses (TTS 22: Part 1:2006), Section 6 – Private Areas.

This two year project specially targets smallmedium sized hotels and guesthouses of at least four years old with less than 100 guestrooms, which may require extra support in delivering a competitive and sustainable product. These targeted properties must all possess the relevant statutory approvals and other clearances.

As the global travel and tourism industry prepares for a forecasted annual growth rate of 4.3% over the next ten years (World Travel and Tourism Council 2009), Trinidad and Tobago must remain poised to capitalise on the ensuing opportunities. The availability and adequacy of accommodation stock which satisfies the business journal | JUNE 2011

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expectations of the experienced and discerning visitor is therefore critical to developing and maintaining brand “Trinidad and Tobago.”

The Project covers upgrade works to the bedroom, bathroom, kitchenette and balcony and includes aesthetic and soft goods improvements.

Participating properties have begun outfitting guestrooms with new furniture, fixtures and equipment, improved lighting and ventilation facilities, safety systems and other amenities which are now expected of any high quality accommodation facility.

Upon completion of the agreed upgrade works, eligible property operators stand to benefit from a 25% reimbursement per room, up to a maximum dollar value of TTD 12,500 for Trinidad properties and TTD 15,000 for Tobago properties. The Project offers the option of applying for the reimbursement in 15 room tranches.

It is expected that the Project will engender renewed business confidence, so that after project completion, property operators will be encouraged to reinvest in plant as part of an ongoing renovation and restorative programme.

The TDC remains committed to adopting a holistic approach to understanding and addressing the needs of T&T’s small and medium sized hotels and guesthouses.

It is with this goal in mind that a series of financing seminars were jointly hosted with the National Entrepreneurship Development Company Limited (NEDCO) and the Business Development Company (BDC).

These two development agencies provide continuous support to the small and medium sized business sector through technical advice, financing and training and development opportunities. Additional financing seminars were also held with the commercial banking sector, where owners and operators were presented with available funding options for the execution of upgrade works and the opportunity to have oneon-one discussions with bank representatives.

The success of this room upgrade project does not fall solely on financing the upgrade works, but includes an understanding of several other elements such as construction, project management and design.

The opportunity to gain knowledge of the necessary skills and techniques was offered to the property operators through a series of educational workshops including an “Introduction to Project Management” and an “Introduction to Interior Design”.

Both workshops facilitated mutual exchange and achieved the objective of equipping operators with the tools necessary for the effective execution of upgrade works. In keeping with future project goals, the TDC intends to host several other workshops including one on “Financial Management”.

To date, properties representing a total of 607 rooms have applied to access the incentive with a possible commitment of 532 rooms.

It is anticipated that 58% of these committed rooms will be upgraded by 2012.

Additionally, the benefits are being extended to other sectors since opportunities for small contractors to provide their services for upgrade works are accessible.

It is anticipated that immediate job opportunities would become available within the accommodation and related sectors both during and after implementation.

The TDC is taking a hands-on approach to effectively develop strong relationships with the project participants through ongoing and open dialogue and frequent site visits. In fact, the scope of the Project caters for monthly interim inspections throughout the period in which upgrade works are being conducted.

Meetings with the relevant hotel associations have also been conducted to apprise them of the incentive and accompanying benefits which are available to their members.

The Trinidad and Tobago Hotel and Guesthouse Room Stock Upgrade Incentive Project provides the opportunity for properties to maintain their originality and individual appeal by outlining the framework for the upgrade works in keeping with the National Standard, yet it allows the operator to determine upgrade designs which are creative and sustainable.

The Trinidad and Tobago Hotel and Guesthouse Room Stock Upgrade Incentive Project should result not only in roomstock of a superior quality but also in a critical mass of new rooms suitable for the international market.

While the Government continues to demonstrate its support of and confidence in the future of the local tourism industry, eligible properties are strongly advised to access the incentive while it remains available.

The benefits promise to be advantageous in the medium to long term, as we continue to build a powerful brand image which is defined by high quality and excellent value for money.

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JUNE 2011 | Business Journal

More than 1 billion hectares in biotechonological crops since 1996 Small-scale farmers make up 90% of all those who grow such crops

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he total surface area planted in biotechnological crops since they were first commercialized in 1996 has surpassed one billion hectares. In 2010 alone, 148 million hectares were cultivated by 15.4 million farmers in 29 countries.

These data appear in the latest report from the International Service for the Acquisition of Agro-biotech Applications (ISAAA) on the global status of the commercialization of biotech products, distributed and analyzed in a videoconference organized by the Biotechnology and Biosafety Area of the Inter-American Institute for Cooperation on Agriculture (IICA).

The report states that the cultivation of such crops has grown steadily at a rate of 10% per year for those 15 years. In addition, the number of countries where biotech crops are grown has increased from 25 to 29, which are home to more than one half of the world population (59%). During the same period, the number of countries that import biotech products has also grown, reaching 30 in 2010.

According to Pedro Rocha, Coordinator of the Biotechnology and Biosafety Area, “It is important to understand that biotechnology is a tool box, and that one of the many tools it offers is transgenesis.”

The ISAAA report states that more than 90% of all those who grow such crops are small-scale farmers in developing countries.

Furthermore, of the 29 countries in which biotech crops are grown, only ten are industrialized.

According to the report, developing countries cultivate 48% of the surface area planted in biotechnological crops worldwide and will surpass the developed countries by 2015, considering that the rate of growth in the former reached 17%, and in the latter only 5%. business journal | JUNE 2011

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Agrobiotechnology: global outlook

For the first time, biotech crops occupied 10% of the 1.5 billion hectares of all cropland in the world, with significant growth recorded in countries that had already adopted this technology, and with three new countries now involved. This growth can be attributed to the proven benefits of its use.

“Genetically modified crops are contributing significantly to sustainability and to efforts to adapt to climate change. The increase in productivity they generate makes it possible to work the same amount of land and, by not expanding the agricultural frontier, to conserve biodiversity.

“They also reduce the ecological footprint of agriculture, requiring less tillage and land preparation, which consumes less fuel and produces less greenhouse gas. In 2009, such emissions fell by 18 billion kilos, which is equivalent to taking 8 million vehicles off the road,” Rocha added.

Five principal developing countries are growing biotech crops: China and India in Asia, Brazil and Argentina in Latin America, and South Africa in the continent of Africa.

Brazil increased its hectarage of biotech crops more than any other country in the world, reporting a record 4 million hectare increase.

In addition, in 2010 three new countries – Pakistan, Myanmar and Sweden - planted biotech crops for the first time, while Germany renewed its production. In Australia, biotech crops recovered after a multi-year drought, with the largest proportional year-on-year increase of 184%. In the European Union, eight countries cultivate Bt maize or the recently authorized “Amflora” potato.

In Mexico, the first field trials with biotech maize were conducted.

The future The outlook for the future is promising. Drought resistant maize is expected to be released in 2012, golden rice in 2013 and Bt rice before 2015, which could benefit some 1 million poor in Asia alone.

As a result, it is necessary to develop suitable and cost-effective regulatory systems.

According to Tea Garcia Huidobor, Program Officer for GEF Projects of the United Nations Environmental Programme (UNEP) Regional Office for Latin America and the Caribbean, “It is necessary to develop national biosafety frameworks that include legal, policy, administrative and technical instruments to ensure the safety of food and human health.

Policies are in place in many countries, but they are not applied or effectively monitored.”

For Rocha, these regulatory systems must be established in the short rather than the long term, given the pressure being exerted on agriculture today. In the coming years, plans call for diversifying the number of biotechnological crops, to involve not only crops that are resistant to droughts, floods or pests, but also others with nutritional and curative qualities. He concluded “People used to talk about the risks involved in using biotechnology; now they refer the risk of not using it.”

St. Vincent and the Grenadines gets US$4.21 million for airport upgrade The CARCIOM Development Fund signed a facility for US$4.21 million with the Government of St. Vincent and the Grenadines to provides financial assistance for the upgrade of the Argyle Airport.

Prime Minister of St. Vincent and the Grenadines, Dr. Ralph Gonsalves signs the Agreement with Chief Executive Officer, Ambassador Lorne T. McDonnough of the CDF in the presence of Mr. Arden Warner, CDF Legal Counsel.

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JUNE 2011 | Business Journal

GLOBAL NEWS TRADE’S ROLE MORE VITAL THAN EVER

Trade has a resurgent and critical role to play in recovery from the global recession, and especially in raising living standards for the world’s billions of poor, conference in Geneva emphasized last week.

The Chair of UNCTAD’s Trade and Development Commission, Tom Mboya Okeyo (Kenya) summarized the message of the third annual session of the Commission by saying in an interview, “Behind this scenario are women, children and young people who wake up in the morning and they need food. For that, they need jobs. And how can they have jobs if it’s a globalized world and developing countries can’t trade equitably?”

“Such discussions in UNCTAD constitute a very useful complement to the World Trade Organization (WTO) negotiations, and can even help WTO members consider options within a wider development context,” Mr. Mboya Okeyo said.

He emphasized the importance of continuing to make substantial efforts for an early and successful conclusion of the WTO Doha Round of trade negotiations. An ambitious, comprehensive, balanced, and development-oriented outcome is needed, he said, thus ensuring a more open, equitable, rules-based, and transparent multilateral trading system.

Mr. Mboya Okeyo said there continue to be serious difficulties faced by least developed countries (LDCs) in effectively and meaningfully integrating into the multilateral trading system.

He stressed that steps were needed to help developing countries carry out trade in products that are labour-intensive, so that employment is generated in regions where joblessness is high. For that to occur, help is needed, so that such countries can link more easily into global supply chains for such goods, and commented further that roads, railroads and ports must be improved so that transport is faster and less costly, and trade is enhanced.

New Tool for Weighing Pros and Cons of Bioenergy As interest in bioenergy production continues to grow, FAO is promoting the use of a new methodology designed to help policymakers weigh the pros and cons of investing in the sector. FAO’s “Bioenergy and Food Security (BEFS) Analytical Framework” was created to help governments evaluate the potential of bioenergy as well as assess its possible food security impacts.

The framework consists of a series of step-by-step evaluations that seek to answer critical questions regarding the feasibility of bioenergy development and the impacts on food availability and household food security. Social and environmental dimensions are also considered.

“Our goal is to help policy-makers take informed decisions regarding whether bioenergy development is a viable option and, if so, identify policies that will maximize benefits and minimize risks,” explains Heiner Thofern, who heads FAO’s Bioenergy and Food Security (BEFS) project.

Because the framework looks at multiple issues and sectors, it also serves as a platform for bringing key ministries and institutions together so they are working on the same page. business journal | JUNE 2011

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UNCTAD ISSUES FIFTH INVESTMENT POLICY MONITOR

IEA Report Explores the Potential for a “Golden Age” of Gas

The fifth Investment Policy Monitor (IPM) reports that from 15 January to 15 April 2011 at least 32 economies introduced some new national investment policy measures. At the international level, 42 economies concluded 31 new international investment agreements (IIAs), including 16 double taxation treaties (DTTs), ten bilateral investment treaties (BIT), and five “other IIAs”.

In line with earlier reports, the Monitor finds that most of the investment measures observed are in the area of liberalization or promotion of foreign direct investment (FDI).

Countries in Asia were particularly active, easing both general and sectorspecific entry conditions for foreign investment. At the same time, there were a number of investment regulations or restrictions adopted amongst others for national interest, including national security purposes.

This dichotomy of policy trends continues at the international level. While countries continue negotiating IIAs, some policy developments respond to the challenges posed by the IIA regime.

Evidence of this can be found, for example, in Australia’s announcement that it will refrain from including investor-State dispute settlement provisions in future IIAs and in a European Parliament Resolution suggesting that future European Union IIAs protect the right to regulate and include social and environmental standards.

The International Energy Agency (IEA) has released a special report titled “Are We Entering a Golden Age of Gas?” This report presents a scenario in which global use of gas rises by more than 50% from 2010 levels and accounts for more than a quarter of global energy demand by 2035.

The new report, which is part of the World Energy Outlook (WEO) 2011 series, examines the key factors that could result in a more prominent role for natural gas in the global energy mix and the implications for other fuels, energy security and climate change.

The report also cautions on the climate benefits of such an expansion, noting that an increased share of gas in the global energy mix is far from enough on its own to put the world on a carbon emissions path consistent with a global temperature rise of no more than 2ºC.

The other main findings and implications of the GAS scenario are: • the share of natural gas in the global energy mix increases from 21% to 25% in 2035, pushing the share of coal into decline and overtaking it by 2030; • an increase in production equivalent to about three times the current production of Russia will be required to meet the growth gas demand in 2035, which the global natural gas resources can supply; • trade among the main world regions more than doubles; • the different overall global energy mix in the GAS scenario results in differences in the required type and scale of energysupply infrastructure; and the pricing of gas relative to other fuels has a strong influence on fuel choice.

INVESTMENT POLICY MONITOR

A PERIODIC REPORT bY ThE UNCTAD SECRETARIAT

No. 5, 5 May 2011

Introduction

With this Monitor the UNCTAD secretariat aims to provide policymakers and the international invest­ ment community with up­ to­date information about the latest developments and salient features in foreign investment policies at the national and international level. It covers measures taken in the period from 15 January to 15 April 2011.

The policy measures mentioned in the Monitor are identified through a systematic review of government and business intelligence sources.

Measures are verified, to the fullest extent possible, by referencing government sources.

This Monitor also reports selected measures that could not be verified for the previous edition.

Highlights of main developments

In the review period between 15 January and 15 April 2011, at least 32 economies adopted 41 policy measures in connection with foreign investment. With 17 measures, Asia was responsible for almost half of these measures.

Most measures taken (29) aim at improving investment conditions. They fall into the categories of entry regulations, and promotion or facilitation.

Twelve measures are new investment regulations or restrictions. Some relate to screening requirements, including for national security purposes.

Just over half of the measures were industry specific (figure 1).

Compared with general measures, industry­specific measures exhibit a higher incidence of measures that are less favourable to foreign direct investment (FDI). This is particularly the case for measures addressing financial services.

(continued on next page)

Figure 1. National policy measures by type of industry, 15 January to 15 April 2011 (Number of measures)

Source: UNCTAD, Investment Policy Monitor database.

Advance unedited version

1

Note: This report can be freely cited provided appropriate acknowledgement is given to UNCTAD and UNCTAD’s website is mentioned (www.unctad.org/diae).

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JUNE 2011 | Business Journal

Global News

Recommendation concerning HIV and AIDS and the World of Work, 2010 (No. 200)

UN Political Declaration on HIV and AIDS calls for world of work leadership On Friday 10th June, the United Nations member States recognized the ILO Recommendation concerning HIV and AIDS and the World of Work, 2010 (No. 200) as a key human rights instrument in the global HIV response in the final Declaration of the High Level Meeting on AIDS held in New York.

The Declaration provides that the new international labour standard as well as other relevant ILO conventions and recommendations should guide the international community in mitigating the impact of the epidemic on workers, their families, their dependants, workplaces and economies.

Director of the ILO Programme on HIV and AIDS, Doctor Sophia Kisting said “We welcome the UN’s appeal to world of work stakeholders business journal | JUNE 2011

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to take a leadership role in the global HIV response as part of the official UN commitment to intensify efforts to eliminate HIV and AIDS.” The Declaration states that “We [...] call on employers, trade and labour unions, employees and volunteers to eliminate stigma and discrimination, protect human rights and facilitate access to HIV prevention, treatment, care and support” (par. 85). The Declaration also identifies the workplace as one of the arenas to reach and engage with young leaders in the response to the epidemic.

Many key principles laid out in the ILO Recommendation are reflected in the general provisions adopted by the UN assembly of Heads of State and Government and their representatives to consolidate the global HIV response, thus establishing the deep relevance and contribution of world of work interventions.

The UN Declaration states that “people living with HIV, including their families, should enjoy equal participation in social, economic and cultural activities, without prejudice and discrimination, and that they (should) have equal access to healthcare and community support as all members of the community” (par.

40).

The ILO Recommendation was adopted with overwhelming support in June 2010 by ILO member governments, employers and workers.

It focuses on the entitlement of all workers, whatever their HIV status, to full participation to economic life.

Like the Declaration, it emphasizes the need to protect families, foster the participation of people living with HIV in the design and implementation of policies and programmes and the protection of human rights. The specific vulnerabilities of women, youth and migrants are also to be addressed through relevant measures, and States are encouraged to revise their laws, policies and practices to create an enabling environment.

The need to train and retain skilled health workers was also underlined as being among the biggest barriers to access HIV and AIDS services.

Nearly 2 billion people worldwide now overweight Linked to rising income More than 1.9 billion people worldwide were overweight in 2010, a 25 percent increase since 2002, a new Worldwatch analysis shows. A survey of statistics in 177 countries shows 38 percent of adults - those 15 years or older - are now overweight. The trend is strongly correlated to rising income and to an increase in preventable health problems, writes Richard H. Weil in the latest Vital Signs Online release from the Worldwatch Institute.

The trend over the last decade toward heavier populations cuts across regions and income levels. In India, 19 percent of adults are overweight, up from 14 percent in 2002.

In Mexico, the figure has risen by 8 percentage points since 2002, while Brazil’s is up by 7 points and the rate in the U.K. is up by 5 points. East Asia has seen a 4 point increase over the period. The United States leads all industrialized countries with 78.6 percent of the adult population overweight, although Micronesia and Polynesia top all countries. There, nearly 88 percent of the over-15 population is overweight.

“Overweight” is defined as people with a body mass index (BMI) of 25 or greater. A person with a BMI of 30 or above is usually labeled “obese,” but here the term overweight covers overweight and obese populations combined.

That analysis shows that some 75 percent of adults in the 10 richest countries are overweight, while in the 10 poorest, only 18 percent are. On a regional level, the correlation between income and being overweight holds reasonably well. Europe generally has elevated levels, for example, while low-income sub-Saharan Africa averages lower BMI levels. At a national level, however, the situation is more complex. A comparison of percentages of people overweight in all countries and their GDPs reveals a positive but weak correlation, with cultural, societal, and possibly genetic factors playing heavily into the mix.

Jamaica: economic measures working Jamaica’s Prime Minister, Bruce Golding says the economic measures that his Government has put in place are now bearing fruit and are set to put the country on a sound economic path.

Delivering a lecture at the Brookings Institute in Washington, D.C. earlier this month, Mr. Golding pointed out that while the country is experiencing economic growth in certain areas, more needs to be done to reap greater economic success.

He told the more than 200 participants, that some of the measures put in place to help realise the economic success included the introduction of the Jamaica Debt Exchange (JDX), measures to reduce crime, divesting Air Jamaica and the island’s sugar factories, along with the development of stringent economic programmes, with support from the International Monetary Fund (IMF) and the World Bank.

In photo above: Prime Minister the Hon. Bruce Golding (right), answers questions from the audience after delivering a lecture at the Brookings Institute in Washington, D.C. yesterday. At left is Brookings Institute Director of Latin American Initiative, Mauricio Cardenas.

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JUNE 2011 | Business Journal

REPORT: CHANNEL FOREIGN INVESTMENT TOWARDS POOR COUNTRIES A new UNCTAD report on the status of foreign direct investment (FDI) in the world’s 48 poorest countries urged a changed approach that would focus such investment on creating jobs, as well as on enhancing those countries’ productive capacities – that is, their abilities to produce wider varieties of goods and more sophisticated goods.

The report, titled ‘Foreign Direct Investment in Least Developed Countries: Lessons Learned from the Decade 2001–2010 and the Way Forward’, contributed to the debate at the Fourth United Nations Conference on the Least Developed Countries (LDCs) which was held in Istanbul, Turkey in May. It noted that while FDI to these nations grew rapidly over the decade to reach an estimated $24 billion in 2010 and their share of global foreign investment flows has effectively doubled to 2%, most in terms of value was dedicated to natural-resource extraction. That sector has tended to create relatively few jobs, the study says.

Such investment also has not tended to “fertilize” LDC economies by leading to greater links between foreign businesses and local firms that can spread know-how and technology and help spur broad-based, long-term economic growth. Although FDI has recently enabled some LDCs to connect with the global value chain in which products are upgraded and reap higher profits, the majority of LDCs remain marginalized from the world economy, according to the report.

Among other things, the study recommended the establishment of an “LDC infrastructure development fund” that would improve these countries’ abilities to attract investment by upgrading such factors as electricity supply, roads, railroads and computer or Internet connections. Such a fund would seek to provide “innovative” solutions to infrastructure weaknesses by establishing public-private partnerships between LDCs and foreign investors.

It also calls for an aid-for-productive-capacities programme that would support technical and vocational training, education and entrepreneurship in LDCs. The intent is to provide LDC populations with skills that can attract foreign investment and spur sustainable economic progress.

The report recommended that LDC governments and overseas development partners boost efforts to attract small- and medium-scale international investors – a group that often finds and exploits hidden business opportunities.

It says that LDC governments should develop strategies and provide incentives to target opportunities where investors can use technology to “leapfrog,” as is already happening in telecommunications with the rapid development of mobile telecommunication networks and with ancillary services such as mobile phone banking or payment services in rural areas.

There is a potential for business people to get involved further in investment by undertaking projects that aim to solve social and environmental challenges.

The report also called for governments to implement regulatory reforms that can help channel FDI in directions that should act to improve living standards, create jobs and broaden the economic bases of LDCs.

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JUNE 2011 | Business Journal

The Lighter Side...

“All businessmen and politicians are crooks!”

That was the exclamation from a young man who had found himself the unsuspecting victim of a recent scam. Most definitely his distressed cry is a sweeping generalization, but it brings to mind a related comment made by a businessman recently in an earlier edition of Business Journal, “Business is built on the art of strategic and careful lying.” He is wrong, of course. Good business is built on integrity and relationships of trust.

The triad of honesty, sincerity, and integrity is everybody’s business. While a single display of honesty, sincerity or integrity would have an immediate effect on a relationship, the long term effect, spurred on by repeated acts is what will be used as an assessment of a person’s character.

These days who cares about character?

Unless we’re talking about cartoon characters and there are many business leaders and politicians who would make excellent cartoon characters as they have already become caricatures of themselves. Trying to prove they are untouchable, such individuals invariably lose touch with their staff, their customers and in some cases even lose touch with reality.

I remember being told by an employer many years ago that I should do whatever is required to get the business. He tried to make business journal | JUNE 2011

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me believe that dishonesty is perfectly justified, because if you do get found out all you need do is apologise. His rationale was that people have short memories, “And even if they do remember, you have already banked their money and maybe even spent it.”

Wow. Just remembering those days sends an uncomfortable shiver down my spine.

But I hear opinions like that all the time, in almost every strata of society, in all categories of business.

There’s the feeling that lies are colour coded. Which is why, I guess, we are told that little “white” lies are okay. But you know that if you wear a white outfit repeatedly, over and extended period of time it does not remain white. And a white collar can be the protagonist of crimes capable of destabilising national economies.

Integrity is what you stand for. It is the upright being in you. Integrity increases our selfrespect and cements important relationships.

In today’s world it’s not easy to do the right thing. In fact, in some circles it can make you unpopular and you run the risk of being branded as boring, weak or just plain stupid.

History is replete with the stories of individuals who did the honourable thing. In the short term they were ridiculed, but as time progressed it became clear they exercised integrity, they took the high ground and they are

remembered as statesmen/women, captains of industry or honourable people and worthy role models.

Being sincere in what we do and the reasons behind what we are doing, engenders cooperation, not just from colleagues and supporters, but even competitors can sense if you really believe in what you are doing. They may not agree with you, but they would be hard pressed to doubt your commitment, your genuineness. Of course, there are ploys that can convey the impression of sincerity, as well as the show of honesty or trustworthiness, but they are detectable and time usually reveals them as cheap tricks.

Our way of life including our scruples, morals and ethics, should be as breathing. Not so much about remembering to put them on before we leave the house, but integral to our being. Even naked, so to speak, our scruples are visible. You might call it our naked truth.

I’ll have to agree with the pragmatists here that it is not easy to hold onto your scruples with so much foolishness happening all around, but what is easy in today’s world? The effort to exercise honesty, integrity and sincerity is no more than the effort required to hoodwink people; is no more than the energy used to manufacture lies and misinformation; is no more than the vigilance required to maintain a false image of yourself and misrepresent others.

Who was it that said, “The hunt for short term gain leads to long term pain”? We have to deal with our addiction for quick fixes.

Everything requires effort, and energy of some sort has to be used in every undertaking.

We can choose to park up our scruples and throw away the key or we can choose to use our scruples to transport us into a new era of sustainable solutions.

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