Business Journal September 2011

contents 4

From the Editor

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LAC exports to increase in 2011

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China-Caribbean Cooperation

September 2011

43 Oil consumption hits all-time high 44 Extractive Industries Transparency Initiative explained

16 Investments in LAC driven by Asian oil & gas firms

50 Premature fiscal tightening endangers global recovery

18 ACP ministers deal with sugar and trade sector transformation

52 The lighter side

22 Haiti’s next chapter 24 Letter from Haiti 28 Transforming the domestic private sector in small Caribbean economies 31 Entrepreneurship in the Caribbean 34 Women - agents of change 36 Methanex 40 BP economist sees global growth

Major cooperation ahead for China and the Caribbean

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Editor: Linda Hutchinson-Jafar

Design and layout: Karibgraphics Ltd.

Contributors: Ambassador Albert Ramdin Ambassador P.I. Gomes Irene Sandiford-Garner Ronald Ramkissoon Sirius Mann Thomas W. Lynch Victor Hart

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.

From the Editor’s Desk

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n our June 2011 edition of Business Journal, we highlighted the growing importance of China to Caribbean and Latin American countries.

In this current edition, we’re highlighting the recently held 3rd China-Caribbean Economic and Trade Cooperation Forum which took place in oil and gas producer Trinidad and Tobago and areas of help Beijing will be giving to countries in this part of the world.

The biggest news was the Chinese $1 billion in loans to Caribbean countries to finance infrastructure projects as it deepens ties in a region historically linked with the United States.

China has been wooing the Caribbean as part of its global push, promoting loans and investment while seeking natural resources and political influence in the developing world from Africa to Latin America.

China’s financial help is also coming at a time when many Caribbean countries continue to struggle with stagnant economies while traditional sources of investment have all but dried up.

In fact, Cuban Vice-Minister of Trade and Investment Orlando Hernandez Guillen praised the Chinese as a helpful ally to less developed countries during one of the sessions at the two-day Forum

China, he said, “represents hope for the poorest nations of the world and its impressive development springs from its own resources ... not exploiting or pillaging other nations,”

Trade between China and the Caribbean had grown annually by 24 percent and reached $7.2 billion in 2010.

Although the latest offer of loans might be smaller compared to the multibillion investment proposals in other regions of the world, it certainly will go a long way towards aiding the weak economies in the Caribbean.

Editor

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Exports from Latin America and the Caribbean Will Increase by 27% in 2011

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he value of goods exported from Latin America and the Caribbean will grow by 27% in 2011, which is a similar increase to that of last year. According to a report presented recently in Santiago, Chile by the Economic Commission for Latin America and the Caribbean (ECLAC), this growth would result from a 9% increase in the volume of exports and an 18% rise in the price of products exported by the region.

In the study ‘Latin America and the Caribbean in the World Economy 2010-2011’ the organization reveals that the value of imports would increase by 23%, with the region accumulating a trade surplus of slightly more than 80 billion dollars by the end of 2011.

South-South exchange, headed by China and the rest of emerging Asia, is currently the main driving force of global trade growth, since the volume of exports from developing countries grew by 17% in 2010, compared with 13% in industrialized countries.

The organization stresses that international trade has significantly contributed to economic recovery following the economic and financial crisis of 2008 and 2009. However, it also warns that at present, the complex situation in developed countries, in particular the United States of America and in Europe, is starting to affect emerging nations and could decrease the rate of growth of exports to these markets in 2012. The specific impact of the slowdown will depend on the type of products exported and the markets to which they are directed.

Likewise, lower growth of emerging economies, which would further weaken industrialized countries, should lower international prices of basic products, affecting the trade balances and current account balances of the countries exporting them. Therefore, there is a need to prioritize macroeconomic prudence and forms of regional trade and financial

cooperation which can buffer the impacts of an eventual weakening of the international scenario.

“The levels of global volatility and uncertainty are worrying. There are still significant global imbalances, such as the sovereign debt crisis in various European countries and the fiscal uncertainty in the United States of America, which would in turn weaken international trade,” stated Alicia Bárcena, Executive Secretary of ECLAC, while presenting the report.

Regional trade balance Over the past decade, the relative importance of Asia in Latin America and the Caribbean foreign trade increased significantly, compared with the fall in the United States of America participation and the stagnation of the European Union.

Latin America and the Caribbean has become the main destination for exports from the United States of America (receiving 23% of exports in 2010, compared to 22% from Asia and 19% from Canada) and the second most important origin of its imports (19% in 2010, following 34% from Asia). The region represents only 2% of the European Union’s total trade, which is significantly below exports between the countries which make up the European Union (64%) and Asia (10%). business journal | SEPTEMBER 2011

China identifies six areas of help for the Caribbean The 3rd China-Caribbean Economic and Trade Cooperation Forum took place in mid-September in Trinidad and Tobago.

Leading the large Chinese contingent including several government ministers was Vice Premier Wang Qishan. Several Caribbean leaders also attended among them Jamaica’s Prime Minister, Bruce Golding, Grenada’s Prime Minister, Tillman Thomas, Antigua and Barbuda’s Prime Minister, Baldwin Spencer, Guyana’s President, Bharrat Jagdeo and Vice-President of Suriname, Robert Ameerali. The newly appointed Secretary-General of the Caribbean Community (CARICOM), Irwin La Rocque was also in attendance.

Since the establishment of the China-Caribbean Economic and Trade Cooperation Forum six years ago, two-way trade has been growing at an annual rate of 24 percent on average and reached US$7.2 billion in 2010. The accumulative Chinese investment in the Caribbean now stands at US$400 million.

Vice Premier Wang announced at the Forum that China will provide the Caribbean with US$1 billion in loans of a “preferential nature” in support of local economic development over the next three years. It was among six policy measures the Vice Premier announced to Caribbean countries.

REMARKS BY VICE PREMIER OF CHINA The following is a condensed version of an address delivered by CHINA’S VICE PREMIER, WANG QISHAN At the 3rd China-Caribbean Economic and Trade Cooperation Forum.

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Photo: news.gov.tt

Vice Premier of China Wang Qishan

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here has been a sound momentum of development in our relations in recent years. There have been frequent high-level exchanges between us, and political mutual trust has continued to deepen. We enjoy fruitful cooperation in economy, trade, investment, tourism, agriculture, science and technology and infrastructure.

The establishment of the ChinaCaribbean Economic and Trade Cooperation Forum has opened new prospects for cooperation between the two sides. Since its inception six years ago, our cooperation in all fields has embarked on a fast track of development. The two-way trade has been growing at an annual rate of 24% on average and reached US$7.2 billion in 2010, and the accumulative Chinese investment in the Caribbean now stands at US$400 million.

China, being a developing country itself, has provided assistance within its capability to the Caribbean countries without attaching any conditions. We helped to build a number of public facilities and projects related to people’s well-being. We helped with the training of 1,700 officials and technicians, and dispatched 200 agricultural and medical experts and young volunteers. Facts have proven to be a forever true friend and cooperation partner of the Caribbean countries.

The underlying impact of the international financial crisis is still lingering and the global economic situation is extremely complex and uncertain. Against such a backdrop, enhancing cooperation in various fields between China and the Caribbean will go a long way in promoting economic development in our respective countries and ensuring world economy recovery.

In the next three years, the Chinese government will take the following six policy measures to deepen cooperation with the Caribbean countries.

First, we will enhance financial and investment cooperation. China will provide US$1 billion in loans of preferential nature to the Caribbean countries in support of local economic development. China encourages exchanges and cooperation between the commercial banks on the two sides. The China Development Bank will set aside US$1 billion to be used as special commercial loans for infrastructural development.

China wants to discuss and sign an investment protection agreement with the Caribbean countries to promote two-way investment. China will also make a donation of US$1 million to the CARICOM Development Fund.

Second, we will step up capacity building cooperation. China will provide no less than 2,500 training opportunities for the Caribbean countries and 230 opportunities with master’s degrees for Caribbean professionals to study in China. To help enhance Caribbean countries to fight natural disasters, China will provide

support in the building of seismic or tsunami early-warning and monitoring networks and provide training on disaster mitigation and prevention.

Third, we will strengthen cooperation in environmental protection and new energies. China will enhance and cooperation with Caribbean countries in such fields as environmental protection and new energies.

We stand ready to help Caribbean countries build small- scale new energy projects such as those with solar power.

Fourth, we will intensify cultural, educational and health cooperation. China will build friendship schools for Caribbean countries and provide assistance in terms of Chinese language teaching, teachers and textbooks. We will continue to provide scholarships to Caribbean countries and stand ready to negotiate the signing of agreements on mutual recognition of diplomas and degrees with Caribbean countries. We encourage schools on both sides to forge sister relationships. We will continue to send medical teams to Caribbean countries and provide training for your doctors and nurses. We also stand ready to beef up cultural exchanges with Caribbean countries.

Photo: news.gov.tt

The Hon. Stephen Cadiz, Minister of Trade and Industry (left) and His Excellency Yang Youming Ambassador of the People’s Republic of China (right)

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Fifth, we will promote closer trade and tourism cooperation. The Chinese side will support the Caribbean countries in increasing exports to China and diversifying export mix.

We encourage Caribbean enterprises to come to China for important exhibitions and trade fairs to promote their products with competitive advantages.

Likewise, we also encourage Chinese enterprises to go to Caribbean countries for export expositions to increase their imports from Caribbean countries. We will promote trade facilitation through strengthened cooperation on import and export inspection and quarantine and other means. We will continue to encourage chambers of commerce, business associations and enterprises on the two sides to step up cooperation and exchanges. The Chinese side stands ready to intensify cooperation with the Caribbean Tourism Organization, assist tourism authorities of Caribbean countries in holding tourism promotion events in China and encourage more group travels by Chinese citizens to the Caribbean.

Sixth, we will boost cooperation in agriculture and fisheries. The Chinese side will continue to send agricultural experts to Caribbean countries and run agricultural and fisheries demonstration projects there.

China’s Ministry of Agriculture will sign the Common Initiative on Agricultural and Fisheries Cooperation with the agricultural authorities of Caribbean countries and set up the ChinaCaribbean Working Group on Agricultural Fisheries and Cooperation so as to promote cooperation in farm produce processing and trade, agricultural and fishery investment, agricultural human resources development and agricultural research and development.

Thanks to more than 30 years of reform and opening up, China has scored remarkable achievements in economic and social development. Now we are implementing the 12th Five-Year Plan. Acting on the Scientific Outlook on Development, we are working to transform the development pattern, adjust the structure, expand domestic demand and improve people’s livelihood. We are endeavouring to ensure

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appropriate structure, high quality and good returns of economic and social development while sustaining reasonable growth rate.

The comprehensive economic social and development in China will not only benefit the Chinese people, but also bring opportunities to the Caribbean and the larger world.

China cannot develop itself in isolation of the world and the world needs China for its development. China will stay committed to the path of peaceful development and steadfastly follow the win-win strategy of opening up. We will, as always, support Caribbean countries in promoting economic development, improving people’s livelihood, advancing regional integration and playing an active role in international affairs.

Enterprises are the main players in ChinaCaribbean economic cooperation. The Chinese government will work with the governments of the Caribbean countries to create an enabling environment for business cooperation between companies of our two sides. I believe that all of you as business leaders with vision and wisdom will seize the opportunity provided by the forum, turn cooperation aspects into real success stories and inject fresh vigor and vitality to China-Caribbean friendship and cooperation.

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Leaders at the opening of the forum.

China and Caribbean Forum - Win-win for All The following is a condensed version of an address delivered by Trinidad and Tobago’s Prime Minister, Kamla Persad-Bissessar at the 3rd China-Caribbean Economic and Trade Cooperation Forum in Trinidad in mid-September

Photo: news.gov.tt

Prime Minister Kamla Persad-Bissessar addressing the opening of the 3rd China-Caribbean Economic and Trade Cooperation Forum at Hyatt Hotel, POS

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ptly themed, “Development Cooperation, Win for All”, this 3rd China/Caribbean Economic and Trade Cooperation Forum brings to Trinidad and Tobago and the Caribbean another dynamic avenue for renewing, establishing and broadening economic cooperation and bilateral relations with the People’s Republic of China.

Mutual benefits may be derived both regionally and individually from engaging China, one of the big four in BRIC, the rapidly growing and emerging markets, as our countries share common interests and face similar challenges in the international system.

It is well known, but worth noting at this time in order to reinforce the significance of this Forum, that China is now the world’s second largest economy on the basis of purchasing power parity. China’s GDP rose by 9.5% in the second quarter of 2011 and reached 3.175 trillion US dollars in the first six months of 2011 based on preliminary statistics.

Moreover, in the context of trade and investment flows, China is emerging as a driver of the economies of a number of developing countries. China’s enhanced role in the Region as an economic partner offers significant potential for attracting substantial investment from Chinese businesses, thereby building on the Caribbean’s longstanding history of trade and development cooperation with China.

The challenge for us in the Caribbean as we welcome Foreign Direct Investment inflows from China is to continue to improve the investment climate to ensure that the interventions contribute to linking domestic firms to the global economy. It is also necessary to strive for the matching of financing injections into high-return projects.

CURRENT TRADE WITH CHINA The 2008 to 2010 financial crisis has impacted on the world economy with so many countries experiencing negative growth and significant budget deficits, as the case with Portugal, Italy, Greece, and Spain, while others have had strong positive growth as the position with the BRIC countries – Brazil, the Russian Federation, India and China.

The BRIC countries have been increasing their economic as well as geopolitical power and their economies recovered at a much faster rate from the recent world economic recession.

Their trade with the world has increased more than five times since 1999 and their share of world trade in the past decade nearly doubled, currently being around 14%. Between 2000 and 2008 this group of countries accounted for two thirds of world growth output increasing their share from 37% to 45%. business journal | SEPTEMBER 2011

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These facts and figures are strong indicators that the current global environment is evolving. The present global economic reality has posed significant challenges for developed economies who have been, for the most part, our traditional trading partners..

Yet, this ongoing global crisis has opened windows of opportunity to developing countries led by China and India as they have now gained a greater presence in the global economy and its governance. Indeed, the group of countries referred to as the BRICs (Brazil, the Russian Federation, India and China) have now assumed a more significant role in the global marketplace.

In this regard, China’s willingness to tap into the Caribbean market should be seen as an indicator of their confidence in our Region to emerge as a key player, both economically and politically in the hemisphere.

We must stress, though, that the stability of the world’s economies, especially those of small island states such as ours, depends on a mutually beneficial global economic system, and this requires a higher level of benevolence among the global economic superpowers.

A more flexible approach is needed towards doing business: an approach based on joint partnerships and strategic alliances so that all parties will be able to share in the global wealth for the greater good of all.

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Prime Minister Kamla PersadBissessar chatting with Vice Premier of China Wang Qishan

With regard to China/Caribbean trade, during the three year period 2008, 2009 and 2010, CARICOM imports amounted to approximately 5.9 Billion US Dollars, with cargo vessels and other transport vehicles leading the list of imports.

In terms of CARICOM exports to China, methanol, iron ores and concentrates and liquefied natural gas topped the list of exports.

The value of the exports was approximately 300 million US Dollars.

China has been the biggest market for our asphalt which was used during preparations for both the Beijing Olympics in 2008 and the World EXPO 2010 in Shanghai.

What Trinidad and Tobago will be looking to address in this Forum is the disparity in terms of our exports versus imports. Where can we be more innovative? How can we capitalise on a transfer of technology to make our product more attractive, more competitive and win a larger share or break into the Chinese market?

How can Trinidad and Tobago help facilitate and collaborate with Caricom partners in achieving these objectives in our mutual interest?

Apart from being a supplier of 66% of the natural gas requirements of the USA, and the world’s largest supplier of urea and methanol, Trinidad and Tobago has been exporting its human resources to oil and gas producing countries worldwide.

This island has been commercially producing hydrocarbons for over 100 years. Our oil industry is older than those of Iran, Saudi Arabia, Venezuela and the United Kingdom. In that period of over 100 years, we have built up a wealth of experience and knowledge in the energy industry.

The vision therefore is that Trinidad and Tobago with its wealth of experience and highly skilled workforce would, could and should become an Energy Services hub supplying services to the Caribbean, Latin America and

Africa. It is our sincere hope that we can work with China on the benefits of partnering with Trinidad and Tobago in these energy ventures.

It is certainly prudent timing to develop greater South-South cooperation and trade.

We should learn from the global financial and economic crisis that we cannot continue to depend solely on our traditional trading partners. We must tap into the potential offered by non-traditional, emerging global economic decision-makers, and develop this relationship in a way that will be mutually beneficial.

CHINA The numbers game –some key facts •

China has become the second largest economy in the World

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China has the highest amount of foreign reserves –more than the total of Japan, Russia and Saudi Arabia combined

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Total amount of FDI China made in 2010 was higher than the World Bank did Worldwide

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Chinese government are investing billions (7billion in 2009 alone) in the Caribbean through SOE and private corporations, building major infrastructure projects, financing roads and ports -stadium, conference centres -

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China Eximbank to launch $US1b sovereign fund to invest in Latin America including the Caribbean

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Fastest growing outbound travel market –21% increase within 2010 when most other markets were still shrinking or stagnating

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Boston Consulting Group predicts the value of Chinese outbound travel market will be $590 billion by 2020.

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China still has the largest population –1.34 billion i.e. 1,340million people –every thing should be measured against this huge population base.

www.chinabn.org business journal | SEPTEMBER 2011 11

Robert B. Zoellick, World Bank Group President spoke at a conference in Beijing on September 3 titled: “China’s Challenges for 2030: Building a Modern, Harmonious, and Creative High-Income Society”.

These are his abbreviated remarks:

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have enormous respect for China’s accomplishments since 1980, the year I first visited China.

I have seen the dramatic effects of the changes with my own eyes. They have been astounding: • • •

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An average growth rate of 10 percent over three decades; Improved living conditions in low-income areas for millions; Over half a billion people lifted out of poverty, through efforts which alone have ensured that the world’s Millennium Development Goal on reducing poverty will be met by 2015.

The world’s largest exporter.

It’s a unique development success story.

Although each country’s circumstance is special, the Chinese experience provides insights for other countries – lessons about the importance of macroeconomic stability; adapting to local initiative and inter-regional competition; integrating with the world; relying on markets and incentives; adjusting to new technologies; gaining the benefits of foreign investment, with its transfer of know-how and links to global markets; building world-class infrastructure; and investing heavily in any country’s greatest asset: its people.

In July of this year, the World Bank Group reclassified China as an upper middle income economy. In the next 15 to 20 years, China is well-positioned to join the ranks of the world’s high-income countries.

That’s a transition that only a handful of countries have made – and, sadly, many have failed.

In 2001, ten years ago, when I was the U.S. Trade Representative, I worked with 12

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Robert B. Zoellick

my Chinese colleagues to complete China’s accession to the WTO. That was a landmark step, a key enabler in President Jiang Zemin’s and Premier Zhu Rongji’s structural reform strategy.

China used that enabler extraordinarily well over the past decade.

Yet it is time to reconsider whether that export- and investment-led growth model will serve China and the world well over the next decade.

Economic research points to just how important it is for countries to change their development strategies after they have reached upper middle income status. Middle Income countries can no longer rely on growth models that have worked while they were poor – if they do, they can be squeezed on both ends: by competition from low-income, low-wage economies, as well as by competition from upper-income countries through innovation and technological change.

The World Bank’s Chief Economist, Justin Yifu Lin, has been a leader in suggesting how countries need to pursue structural transformations at different stages of development.

Consider this: If China were to continue on its current growth path, by 2030 it would have an economy equivalent to 15 of today’s South Koreas, using market prices. It’s hard to see how that expansion could be accommodated with an export and investment-led growth model.

China’s policymakers know what needs to be done. The adjusted course is reflected in both the 11th and 12th Five Year Plans, which focus on quality of growth, expansion of domestic demand through higher consumption, structural reforms to spur innovation and economic efficiency, and social inclusion to overcome the rural-urban divide and the income equality gap.

Now China needs to translate the blueprints of these plans into action – to take “what” needs to be done -- and turn it into “how.”

China’s structural challenges occur in a current international context of slowing growth and weakening confidence.

I have said recently that the world economy is entering a new danger zone this autumn.

At the same time, we are seeing almost record-high food prices and volatility in commodity markets, putting the most vulnerable at risk.

The financial crisis in Europe has become a sovereign debt crisis, with serious implications for the Monetary Union, banks, and competitiveness of some countries. My country, the United States, must address the issues of debt, spending, tax reform to boost private sector growth, and a stalled trade policy. These are decisions that need to be made in Europe and in the United States. But we are living in a global economy. Decisions in Europe, decisions in the United States, decisions in China – they affect all of us.

It’s important that policymakers make decisions not only on the short-term challenges,

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but also the medium- and long-term structural drivers of growth, innovation, and opportunity.

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Challenges Ahead The world needs engines of growth. With its remarkable economic success, China is already serving as an engine of growth. But can China avoid the middle income trap and continue to grow rapidly over the next two decades and beyond?

Our discussions today are based on a strong conviction that China can overcome these challenges. We take as a starting point a vision of China in 2030 as a modern, harmonious, creative high-income society that has taken its place on the world stage as a responsible international economic stakeholder. We then set forth a time-frame for and sequencing of reforms that can take China, step by step, toward realizing this vision.

But what will it take to get there – to build on China’s considerable strengths, capitalize on external opportunities, and manage the potential hazards, risks, and vulnerabilities?

In your discussions today, I hope you will help us consider some of the following questions: • How can China manage the shift from an intense focus on economic growth to a broader approach that highlights quality of growth, inclusive growth, sustainable growth – and the well-being of all Chinese citizens?

• How can Chinese policymakers sustain economic growth while protecting the environment and using natural resources efficiently, and how can China transition toward green development? How can pricing policies assist?

• What will it take to help China adjust to rapid urbanization – from 50 percent of the population living in cities today, to almost 70 percent in 20 years?

• How can policymakers modernize the country’s fiscal and financial systems - aligning revenues with expenditure responsibilities at different levels of government and placing all expenditures “on budget”?

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•

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How should policy makers address the roles of state and market, and private and stateowned enterprises? More fundamentally, perhaps – what should be the role of the state in China with respect to land, labor, markets, and the rule of law?

What about rethinking the organization of public management, and the shift from administrative management to rule-based policies?

How can China best encourage open innovation – in products, systems, and technology – in ways that connect that innovation with the global network of ideas?

How should China interact with the international economy? China is already a key stakeholder in the world economy. Looking forward, how can China be a responsible international economic stakeholder, serving as a key partner in finding global solutions and sharing mutual responsibilities?

And – perhaps the most important question: How can China best draw on the talents, energy, and creativity of its people? In the next five years, more people will be leaving the Chinese workforce than joining it. How can policymakers ensure that the Chinese people can adapt, innovate, and play an active role in the healthy and positive process of change?

Conclusion We have assembled an exceptional group of experts to discuss these and the many other questions to be considered for our report on China’s Challenge.

We need to know, as well, the questions we might have overlooked.

We want this to be a practical guide for policymakers. Your knowledge and experience will be of enormous value in helping to improve the analysis, enhance the policy content, and make this report as useful as possible for Chinese colleagues and policymakers.

Professor Lino Briguglio, Director of Small States Network for Economic Development, Central Bank of Malta

On Monday 12th September 2011, Principal of the St. Augustine Campus of the University of the West Indies, Prof. Clement Sankat hosted a luncheon at which Prof. Lino Briguglio, Director of Small States Network for Economic Development, Central Bank of Malta delivered an address on the topic “Economic Vulnerability and Resilience in the Caribbean Small States.”

Guests invited to the luncheon included members of the University Community, government representatives, corporate citizens, Campus Council Chairman, Governor of the Central Bank, Ewart Williams and senior staff at the bank, members of the diplomatic corps and other specially invited guests – Professor Emeritus Compton Bourne; Senator Professor Patrick Watson.

CHTA TO CELEBRATES 30TH ANNIVERSARY OF CARIBBEAN MARKETPLACE The Caribbean Hotel & Tourism Association (CHTA) is celebrating the 30th Anniversary of Caribbean Marketplace - the industry event that has revolutionized the way business is conducted among industry stakeholders.

CHTA anticipates that the 2012 edition of the event will continue the successes achieved at Caribbean Marketplace 2011 which saw the third largest attendance over the past decade as well as an increase in the number of crucial buyer companies by 20% and buyer delegates by 17%.

“Over the course of the past 30 years, the packaging of Caribbean vacations has changed because of the role Caribbean Marketplace has played in shaping the way business is conducted between tour operators, hoteliers, attractions and restaurants,” said Josef Forstmayr, CHTA President. “In 2011, we saw a 22% increase in wholesaler buyer companies in attendance at Caribbean Marketplace which is a clear indication that there is a tremendous interest in Caribbean vacations across the globe.”

Caribbean Marketplace is the requisite business-to-business marketing event for the Caribbean hotel and tourism industry. At Caribbean Marketplace, hoteliers meet, network, negotiate and conduct business with buyers from around the world. It will be held at the Atlantis, Paradise Island Jan 22-24, 2012 and presented by CHTA, the Bahamas Ministry of Tourism, the Bahamas Hotel Association, the Nassau/Paradise Island Promotion Board, MasterCard and Virgin Holidays.

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Investments in Latin America and the Caribbean driven by Asian oil and gas firms

Foreign direct investment (FDI) flows to Latin America and the Caribbean increased by 13 per cent in 2010 to reach $159 billion, UNCTAD´s annual investment survey reports.

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he strongest increase was registered in South America, where FDI rose by 56 per cent to $86 billion, with Brazil alone accounting for 56 per cent of this amount. Inflows to Central America climbed 20 per cent to $25 billion, of which Mexico attracted $19 billion.

Flows to the Caribbean decreased by 26 per cent, to $48 billion, of which offshore financial centres represented 95 per cent, the World Investment Report 2011 (WIR11) reveals.

The report, subtitled “Non-equity modes of international production and development”, was released in July.

FDI outflows from Latin America and the Caribbean increased by 67 per cent to $76 billion in 2010, the biggest surge among the world´s economic regions, the report says. The rebound was due to strong increases registered

by Brazil and Mexico, the region´s two principal outward investors (figure 1).

Growth of both inflows and outflows stemmed from respective surges in crossborder merger and acquisition (M&A) sales and purchases. Latin America and the Caribbean witnessed a sudden increase in cross-border 16

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M&A sales from negative values (because of divestment) in 2009 to $29 billion in 2010, the highest level in the region since 2000.

This shows a renewed interest by foreign firms in the acquisition of Latin American enterprises after a decade of sluggish crossborder M&A activity in the region. However, most of these acquisitions were undertaken by developing Asian transnational corporations (TNCs), mainly from China and India, in the oil and gas extractive industry in South America (table 1).

On the purchase side, the region´s TNCs, bolstered by strong economic growth at home, have increased their investments abroad, in particular in developed countries where investment opportunities have arisen in the aftermath of the global financial crisis.

Brazilian companies such as Vale, Gerdau, Camargo Correa, Votorantim, Petrobras and Braskem have undertaken acquisitions in the iron ore, steel, food, cement, chemical, and petroleum refining industries in developed countries.

Mexican firms such as Grupo Televisa, Sigma Alimentos, Metalsa and Inmobiliaria Carso have purchased firms in the United States in industries such as media, food, motor vehicles, and services.

There also have been some important intraregional acquisitions, the most significant being the $1.9 billion purchase by Grupo Aval (Colombia) of BAC Credomatic, a foreign affiliate in Panama of General Electric Co.´s finance unit.

Preliminary data for 2011 show that FDI inflows have continued to rise in 2011, while outflows are declining.

Figure 1. Latin America and the Caribbean: top 5 recipients and sources of FDI flows (Billions of dollars) a) Inflows

B: outflows

Source: UNCTAD, World Investment Report 2011.

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Column

ACP Ministers Deal with Sugar Trade & Sector Transformation

By Ambassador P.I Gomes

The Global Context

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ddressing the 12th Ministerial Conference on Sugar of the African, Caribbean and Pacific (ACP) Group in Maputo, Mozambique from July 24-26 2011, Dr. Peter Baron, Executive Director of the International Sugar Organisation (ISO) strongly encouraged some 25 ACP sugar producers to enhance their productivity and efficiency.

This, according to Dr Baron, is essential if maximum returns are to be obtained by ACP sugar industries from the exceptionally high world market prices seen as likely to last for the next year or two, notwithstanding the volatility to which prices are customarily subjected.

Of course, severe weather variability from droughts or floods and currency fluctuations of the big sugar exporters – Brazil, Australia and Thailand- invariably affect price swings.

Despite the now favourable prices for sugar, attention to the generally volatile market will continue to be a major concern. This is a troubling matter for many ACP producers for whom exports are a major source of foreign exchange and in which the industry as a whole, accounts for a large portion of the labour force, directly or through several ancillary sectors of transport, shipping and commercial activities, as in Guyana.

The fluctuating world market prices reached US 33cents/lb just two months ago and are now at about 26 cents/lb. This is of great significance for ACP producers, needing predictability and stable prices for

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their long term investments; hence the Conference assessed opportunities in the global market for diversification of sugarcane industries.

Considerable scope for favourable economic returns was shown to reside in many areas. For example, fuel from ethanol, co-generation of energy for national power systems from cane bagasse, along with a wide range of valueadded down-stream products such as bio-plastics, polyester, pharmaceuticals, solvents, bio-pesticides, to name a few, were indicated as deserving further study.

Indeed, the Conference deliberated on this latter aspect of what is being called the “green chemistry” revolution applied to both beet and cane sugar industries. Interesting papers were presented by Dr. Jean-Claude Autrey, Chairman of the ACP Sugar Scientific Committee and extensive treatment on the scope for diversification and by-products from cane biomass was illustrated by the well-known Brazilian scientist, Dr. Manoel Regis Leal.

Options to be explored for transformation of ACP sugarcane industries with the benefit of significant research and innovation are contained in a multi pronged Maputo Action Plan to meet systemic challenges and chart directions for higher productivity and valueaddition in ACP sugar sectors as will be discussed subsequently.

It will be useful however to briefly highlight the major challenges that continue to place severe demands on ACP sugar industries.

These can be considered in relation to the historical trade relations between ACP and the

European Union (EU); internal changes of the EU sugar regime and Europe’s Common Agricultural Policy (CAP); and the contrasting role of ACP sugar in national and regional markets with the emergence of Economic Partnership Agreements (EPAs).

ACP Sugar and its Challenges The traditionally strong role of ACP sugar exports to the EU market has remained an important pillar of ACP-EU trade relations with the ACP sugarcane industries supplying 60% of EU’s import requirements.

The WTO ruling against the EU’s subsidised exports in favour of Brazil, Australia and Thailand forced an extensive reform of the EU sugar regime in 2005, including closure of factories and refineries with a consequent impact on ACP suppliers. The longstanding ACP-EU Sugar Protocol of 1976 that guaranteed negotiated prices and duty free quotas to 18 ACP Protocol member states was denounced in 2006 by the EU and also included a 36% price cut on ACP exports.

Although phased in over 3 years, the full brunt took effect in 2009 with a revenue loss estimated at more than Euro 2 billion(approx.

US$ 3 bn); and despite the Accompanying Measures Support Programme (AMSP) of Euro 1.2 bn for the period 2006-13, as a compensatory measure, the socio-economic and political impact on ACP exporters continues to be widespread with demands for structural adjustments. This has been intensified by the continuing neoliberal banking crisis and attendant upheavals since 2008 through fuel and food crises, continuously subjected to market speculation.

The combined effect of these converging forces illustrates the interdependence of ACP sugar and external factors in the European and global sugar trade. The full significance of this was thoroughly examined by ACP Ministers at the Maputo Conference which also took account of the present debates on the EU’s Common Agricultural Policy (CAP) as Europe prepares for their 7-year budget for 2013-2020.

Conscious of the likely impact of CAP reform on ACP sugar trade, pre-emptive measures to engage the European Commission (EC) revealed common ground with the ACP on the EC’s approach to post-2013 CAP reform.

These include issues of food security, natural resource management, climatic impacts on agriculture, upgrading rural living conditions and promoting safety nets to ensure income and price stability of communities dependent on commodity production and by-product development.

Deliberating on those aspects, Ministers welcomed a June 2011 resolution of the European Parliament supporting an extension of the 2006 sugar market regime “at least to 2020” thereby allowing a predictability and stability of market conditions. Concisely put, this is a call for a “managed market”, a position favoured by the ACP. Indeed this is also a basic premise of the EPA negotiations and as concluded several ACP sugar supplying states imposes obligations on the EU to ensure WTO-acceptable preferences for the ACP “at least to 2020”.

With this in mind the Maputo Action Plan included specific objectives on EU market balance; competitiveness of ACP sugarcane industries; Intra-ACP Cooperation in Research & Innovation; and the WTO Doha Development Agenda (DDA) to ensure its December 2009 package on preferential treatment for sugar, tropical products and bananas is safeguarded and becomes a multilateral agreement.

In summary, the ACP sugar suppliers have made their case for the EU’s CAP reform to ensure: business journal | SEPTEMBER 2011 19

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A stable and commercially attractive price with effective tariff protection enabling predictable and sustainable export earnings; An effective management of the sugar sector for an orderly and balanced market for sufficient sugar to meet demands of the EU market; Maintenance of an MFN tariff and safeguard mechanism with automatic triggers and no further liberalisation under FTAs that may adversely affect rights and obligations guaranteed in EPAs with ACP countries, as unfortunately may arise from what has been granted to some Central & South American countries by recent sugar quotas; Continuation of priority of access for eligible ACP States, with scope for South Africa to be granted a priority tariff rated quota (TRQ) when market conditions permit; and A long-term perspective with predictability for continued investment by ACP states to promote efficiency, diversification and environmental sustainability.

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These highlights comprise a negotiating agenda that includes demands for a continuation of “accompanying measures” and the coherence of agriculture, trade and development policies.

This kind of multifaceted agenda would avoid “political consultations” with a sugar “trading” state, such as Fiji, being used to curtail “development assistance” for farmers of that country. Also of significance is the renewed thrust for a further research and innovation programme to improve field and factory processes with small and medium scale operators in rural communities as major beneficiaries.

The mandate to the Ministerial Bureau and Ambassadors of the ACP Sugar Committee to implement the Action Plan will necessitate engagements with EU’s Member States, Council, Parliament and Commission but more importantly will be political, financial and technical commitments within ACP Member States to optimise the 7 year “opportunity” in the coming Financial Perspectives of 20132020 for ACP sugarcane industries to vigorously continue working toward a meaningful future for their industries, national economies and rural communities.

Future transformation of the ACP sugar sectors Many encouraging signs are evident for commercially remunerative sugar industries in ACP countries. African producers in Swaziland, Kenya and Mozambique envisage positive outlooks given their increasing levels of production with growing demand and attractive prices of national or regional markets.

Additionally, expanded production is expected from Ethiopia and Sudan. These will no doubt play a part in the increase of ACP exports to the EU, which this year are below 1.8 mn tonnes and a wide gap from the 3.5 mn tonne limit before the double-trigger mechanism can affect non-LDC (former Sugar Protocol) suppliers.

For us in the Caribbean, the relatively low level of production has to be addressed.

Additionally for Guyana, the expansion into refined sugar is essential, for the long-term

future and urgent “turn-around” of the industry.

The CARICOM market of 300-400,000 tonnes for refined sugar is a golden opportunity and with the Common External Tariff (CET), fully observed, this can be a lucrative source of income and revenue.

In Caribbean industries, improved productivity is critical and cannot be achieved without improved varieties, protection against disease and cultivation systems that utilise more effective and efficient technologies. For this, appropriate research and innovation are indispensable. A comprehensive and integrated strategy with a re-energised and expanded Sugar Association of the Caribbean can be a great impetus. Let the Maputo Action Plan be a stimulus.

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

IICA’S DIRECTOR GENERAL VISITS TRINIDAD AND TOBAGO

Director General of the Costa Rica-based InterAmerican Institute for Cooperation on Agriculture (IICA), Dr. Victor Villalobos paid his first official visit to Trinidad and Tobago in early September. Dr. Villalobos, a Mexican national, participated in a two-day Planning and Coordination Meeting for IICA offices in the Caribbean Region.

Dr. Villalobos (second from right) is seen with (from left to right) IICA Representative, Trinidad and Tobago and Regional Coordinator, Caribbean Region, Gregg CE Rawlins, Trinidad and Tobago’s Minister of Food Production, Land and Marine Affairs, Senator Vasant Bharath and Senior Minister of International Trade, Industry, Commerce, Agriculture, Marine Resources, Consumer Affairs and Constituency Empowerment, St. Kitts and Nevis and Chairman of the Board of Governors of CARDI, Dr. Timothy Harris.

business journal | SEPTEMBER 2011 21

Op-Ed

Haiti’s Next Chapter

By Ambassador Albert Ramdin

T

he morning after an election victory, most politicians wake to a rose-colored world and an appreciative electorate. For Michel Martelly, the morning after his election victory came with the knowledge that the majority of Haiti’s population started another day without basic amenities, adequate food or water.

Over 600,000 were still living in tents more than a year after the earthquake, and little had changed for the nine million who had also survived the hurricanes and cholera that followed. For Michel Martelly, there was no honeymoon.

The morning after he became President, Haiti looked to him for immediate help.

Michel Martelly knew the difficulties his country faced heading into his presidential bid. He had pledged his postelection reality would be marked by a shift in the way Haiti did business. “Change” he believed, would be more than a catch phrase. The political will, after all, was there.

Michel Martelly

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For the most skilled politician, confronting the layers of challenges in Haiti would be a daunting task. For a selfadmitted political outsider whose candidacy was based on a vision of replacing traditional politics with practical perspectives and fresh policy, it was viewed as more of an opportunity to prove that both politics and presidents could be relevant, helpful and practical.

Martelly’s confidence was based on his ability to transform. During his campaign, Haiti and the rest of world watched as he transformed himself from a popular musician who pushed the limits, to an imposing figure able to stand shoulder-to-shoulder with the prominent leaders of the Western Hemisphere. The expectation from some perhaps, was that Haiti could be transformed in much the same way and in a similar time frame.

Months into his term however, President Martelly’s ability to take a stalled country forward is being tested. The unconventional President is yet to form a government and up to the time of the submission of this commentary, a prime minister has not been elected. Two nominations for the post have been rejected by the opposition dominated parliament. Political will without co-operation and support, leading to a familiar frustration.

The President’s latest efforts to form a Government include new attempts at dialogue with members of parliament. Without the legislature’s cooperation, any president would be hard-pressed to accomplish even the most basic goals.

With common ground

The process and time in short supply, progress is lines drawn out by Haiti’s stymied and promises to the own electoral calendar population, have become cannot be avoided, but the hard to keep. Haitians personal politics, power voted for meaningful plays and unnecessary change in their day-to-day delays on governance circumstances, but continue decisions undoubtedly can. to wait for results. The

There is a long President, who promised road ahead for Haiti, to generate employment, a foundation must be hasten the pace of built for the economy to reconstruction, maintain flourish, Haitian leadership security and ensure political and priorities must be stability, is facing a political clearly established as the hurdle that he must find a country partners with the way to jump. international community

If Haiti is to be given to set priorities to rebuild a fair chance to progress, it’s infrastructure; strong President Martelly must, for state institutions must be Election day in Haiti the sake of the nine million established and adequately he now represents, be allowed the opportunity staffed with Haiti’s ready workforce. to govern and carry out the mandate he has But without a functioning government, received from the Haitian electorate. Cooperation and a parliament willing to work together for and common ground must be found with the the good of the Haitian people, these ideals parliament to move past the latest political will remain meaningless words printed on stalemate. Haiti deserves a fair chance under a paper. Elected parliamentarians must be willing new president. to work with each other, and work on building

Haiti has birthed a nation of survivors in a common ground. Being able to find a place of land of potential yet to be realized. It is therefore compromise may be easier said than done when the mandate of Haitian leaders from all sides of political ideals clash with meeting practical the political divide to remember the most basic needs and setting realistic goals. principle of good governance: to represent the Under these conditions, leadership, interests of those who elected them, to be a though well-intentioned, cannot deliver on voice for the voiceless, and to improve the promises to the people. The people of Haiti quality of life for those they represent. voted for change and expect their leader,

Good governance in Haiti requires all regardless of political affiliation, to work for the parties and all parliamentarians to put aside improvement of Haiti. The time has come for personal gain and one-sided political agendas, Haiti to move forward. Commitment by all to at least for a moment, to avoid another painful the goal of reaching a common good, is now and unproductive delay. required.

It is time for Haiti to move forward.

Regardless of whom Haitian nationals voted, Ambassador Ramdin is the Assistant their goal was to elect representatives from Secretary-General of the Organization of the parliament to the presidential palace, who American States (OAS) would work for their good.

business journal | SEPTEMBER 2011 23

LETTER FROM HAITI Haiti Reconstruction Quagmire

A

fter the earthquake of January 12, 2010, which measured 7.0 on the Richter Scale, the international media bombarded viewers worldwide with explicit footage and reports of the massive devastation and of Haitians rescuing survivors or retrieving their dead from the ruins. The world responded immediately with emergency teams, doctors, rescuers and pledges. According to figures released by the Government of Haiti, the quake claimed more than 300,000 lives, injured 300,000, and rendered more than 1,000,000 homeless. The structural losses suffered in the quake are incalculable. The National Palace is in ruins. So is Parliament, the nation’s highest court, the Roman Catholic cathedral, virtually all of the downtown commercial district, the city’s biggest and most modern supermarket, countless schools, banks, hotels, churches and, of course, homes.

At the same time as the emergency aid was landing, so were scores of international organizations and engineering companies hoping to grab a piece of the reconstruction cake. They say that one man’s curse is another man’s blessing; there seemed to be no truer word. Some even came with plans on how to rebuild the city, readily paying international lobbyists to intervene on their behalf with the Haitian government to ensure contract awards.

In spite of all this attention, reconstruction has barely begun. People all around the world, and above all the Haitians, are greatly disappointed and are questioning this lack of progress.

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Hundreds of thousands of dollars have been spent on conferences and meetings, in Haiti and outside, for the reconstruction of the country. Yet it was only recently, 18 months after the catastrophe, that one shared plan or vision, conceived by the Prince Charles Foundation, finally emerged as being “accepted” for the restoration of the centre of the capital, Port-auPrince.

THE STALLING OF HAITI’S RECOVERY In the immediate aftermath of the earthquake the René Preval government, in conjunction with the international community, moved rapidly to establish the Interim Haiti Reconstruction Commission (subsequently called the Interim Haiti Recovery Commission, or IHRC) to approve and optimize investments and projects and generally administer the near US$10 billion in pledges from the international community. The Commission, whose operations have become controversial, came into being in April 2010 and comprises Haitians and non-Haitians in equal numbers. However, the presence and influence of the non-Haitians, specifically the international financial institutions, greatly outweigh Haitian input, and the Commission’s effectiveness is widely questioned.

Political paralysis, dependence on international aid, and insecurity are now the order of the day, while reconstruction is still at a standstill and the deadly cholera epidemic, apparently imported by UN troops, is a sad reminder of the country’s poor sanitary conditions. This overall observation is factual, and beyond all contest. It is against this complicated backdrop, coupled with a challenging parliamentary opposition, that President-elect Joseph Michel Martelly took office on May 14, 2011.

THE OBSTACLES TO RECONSTRUCTION PROMISES NOT KEPT The $10b. pledged by the international community has barely reached the people of Haiti, for a number of reasons.

Of the $10b., $5.3b. was promised for the first two years. However, only $1.2b. of this amount has been received, and less than half of this has been used effectively. And new commitments are rare. The United States, the biggest contributor, has postponed the payment of the near-totality of its promised assistance ($1.17b.) to sometime in 2011; it has so far paid out only one-tenth of this sum. In the streets of Port-of-Prince, only 5 % of the debris has been collected up to now and, according to the humanitarian association Oxfam, a million-plus persons are still living in temporary accommodation, meaning tent cities in the Haitian context.

Criticism of the aid operation in the last year has come from a broad range of figures, including Hollywood actor turned humanitarian worker Sean Penn, and Cuba’s former leader Fidel Castro, who says Haiti has been “abandoned to its fate” by the world’s rich. When asked to give her views on why the international community’s year-long effort in Haiti has largely failed, the former Governor-General of Canada, the Right Honourable Mrs. Michaelle Jean, herself born and bred in Haiti, declared forthrightly at a press conference following her investiture in Paris as Special Envoy to Haiti of UNESCO: “We’re going to be commemorating a year … not much has been done. The system is not delivering anything. If it worked, we would see a different

Haiti today,” she said, adding: “If we want to see a change … we need to start working differently now. The first step for foreigners working here is to overlook the nation’s chaos and move from the logic of assistance to the logic of investment. What Haiti needs is investment in people’s capacities, in governance, investing in education. What Haiti is about, really, is supporting a population,” she said. “Otherwise, we’ll continue with the same system that is not productive, not constructive, that same cycle of dependency that is very detrimental. Haiti has become in the last decades some kind of huge laboratory for all kinds of projects. There are tens and thousands of NGOs who are trying their best. I’m not saying they’re doing bad work. What is needed is to invest in sustainable actions. Everybody needs to rethink their way of doing things in Haiti.”

MUTUAL DISTRUST With more than a thousand humanitarian organizations in Haiti, the local authorities fear that these will eventually end up managing the country. It is clear that donors prefer to entrust their funds to non-governmental organizations (NGOs), for fear that it would only serve to feed a bottomless pit if it was directly paid to the government.

INEFFECTIVE IHRC MANAGEMENT The IHRC, co-chaired by former US President Bill Clinton and Haitian Prime Minister JeanMax Bellerive, is in charge of managing the international relief aid. “Until now, the Commission has not lived up to its mandate,” according to an Oxfam report accusing it of “missing energy “. The donors, members of the Commission and the Haitian population all say the same thing - there is a lack of information on, and transparency in, the Commission’s activities. By contrast, the latest Commission report claims that 87 projects have been approved for the sum of $3.2 M of which $1.2M has already been spent. Enlightening fact: this week the Commission, whose mandate expires officially in October, proposed the creation of an office dedicated to fighting corruption. business journal | SEPTEMBER 2011 25

UNCERTAIN POLITICAL FUTURE The publication of the controversial first results of presidential and legislative elections in November 2010 triggered bursts of violence all over Haiti. Bowing to international pressure, the election authorities released the final results only in early 2011, allowing the second round of elections to be held in March. National and international observers, as well as the international community as a whole, questioned the election results at all levels, but the OAS/ Caricom international observers were allowed to “verify” only the Presidential results. The contentious victories of a number of legislators who won their seats by an “absolute majority” in the first round of the elections were allowed to stand. This gave a very handsome majority to the political platform, Inite, established in 2009 by former President Préval.

OWNERSHIP AND USE OF LAND The removal of the homeless to safe and suitable housing camps was postponed indefinitely because the appropriate land located in the environs of Port-au-Prince belongs to rich landowners, who are not anxious to have such settlements on their properties. This elite, dominated by a handful of families, controls most of the country’s industry as well as its political system.

DEMOGRAPHY In spite of a high infant mortality rate, the Haitian population has continued to increase at approximately 2 % every year. Four of every ten Haitians are less than 14 years old and the majority of the population, now more than 10 million, now, lives on less than one US dollar per day per person.

RECOMMENDATIONS THERE ARE THINGS THAT WE CAN DO AND SHOULD START DOING IMMEDIATELY. The new Haitian government should: • show real political leadership and urgency in reconstructing the country by a) developing a public works program that creates jobs and builds skills; 26

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b) encouraging and supporting homeless families to return or resettle in appropriate locations; c) implementing social protection programs such as cash transfer and micro-credit programs; and d) investing in agriculture and Haitian businesses; • put measures in place to reduce corruption, further transparency and improve accountability, and speed up decentralization, transferring power to local authorities.

International donor governments, the UN, and international NGOs should: • work far more closely and effectively with the Haitian authorities, reinforcing their capacity and working to improve the performance of the government ; • release donor funds pledged in New York in March 2010 and subsequently, and improve transparency related to pledges and disbursements. Synergy between the donors and the Haitian government should be improved to ensure harmonized policies and priorities; • have major stakeholders, including Bill Clinton, urgently review the workings of the IHRC and speed up delivery of its mandate.

The Haitian authorities, donor governments, the UN, and international NGOs should: • consult, communicate with and effectively involve Haitian citizens in the reconstruction of their country and ensure that the recovery program reflects their needs and priorities.

Jean Donatien

Mr. Donatien is a Business Journal reader.

Leading with RC 14001 and ISO 14001 Standards

In 2007, Methanex Trinidad Limited became the first company in Trinidad and Tobago to be RC 14001 and ISO 14001 certified by internationally recognized assessor – Lloyd’s Register Quality Assurance.

Since then, it was our strong commitment to Responsible Care leadership and daily dedication to working safely and efficiently that allowed us e to earn re-certification in 2010 after subsequent successful annual surveillance audits.

This re-certification validates our concerted efforts to effectively monitor and manage performance related to the health and safety of employees and contractors, environmental protection, process and product safety, emergency preparedness, p security and community outreach.

Methanex Trinidad Limited, manager/operator of a 2-plant methanol production facility at Point Lisas, is a subsidiary of Methanex Corporation, the global leader in methanol supply to major international markets.

Commentary Transforming the Domestic Private Sector in Small Caribbean Economies

by Ronald Ramkissoon Ph.D. Sometimes I think that we in Caribbean countries focus too often on the fact that we are small. We behave as if we are without options. Our small size is a reality but I also believe that our limitation is not so much that we are small, but that it is our refusal to develop a vision and implement a plan for moving forward.

I

think that it was this consideration that led me to pay close attention to what Bo Burlingham of Inc. Magazine (New York) had to say at the “Excellence in Business” Forum held in Trinidad in June this year. Reading his insightful book, Small Giants: Companies that Choose to be Great Instead of Big, I reflected on the title and its relevance to small Caribbean economies.

My reflection was that a change in the word “companies” to “countries” would give this title tremendous meaning for small Caribbean countries.

For one thing, if Caribbean companies are to become “giants” or “great,” then their economies and policy makers in them should also share in this vision of being “small giants.”

In other words the title is as relevant to companies as it is to countries. How can small Caribbean economies be small giants? How can they be “great” since they cannot be big?

If companies are to be great, then it will be extremely helpful if the environment for doing business is great and if the attitude of policy makers and the population towards business are also great. In other words, I believe that there is an important nexus between great companies and great countries. In the next few lines I will elaborate.

The domestic private sector of Trinidad and Tobago includes businesses which are 28

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small, medium and large. The domestic private sector is small when compared to the other two sectors of this economy, i.e. the foreign private sector, which is mainly involved in energy-related business and the public sector.

The domestic private sector is small in terms of the size of investments in the domestic economy, net foreign exchange earnings, exports and in some other respects as well. However, it is large in terms of its contribution to employment, providing jobs for about 72.0 percent of those employed. The public sector is the second largest sector accounting for approximately 26.0 percent. The foreign private sector ranks third, with the remaining 2.0 percent, as it is the most capital intensive of the three sectors.

This historical structure has been a double-edged sword. On the one hand it has meant that foreign direct investment (FDI) and public sector investments have historically been the main drivers of this economy, giving rise to relatively good incomes for most of the population, most of the time.

However, therein lies a major challenge; for if FDI is weak and/or public sector investment falters for whatever reason, then the economy goes into recession. In a sense, the weakness of these two major players is what largely explains the overall shrinking of economic activity

in Trinidad and Tobago in 2009 and 2010. It also helps to explain the still weak domestic economy.

For most of the Caribbean, not only has FDI shrank, following the global financial crisis, but government’s resources for capital investment are scarce given high debt repayments and high demands on the recurrent budget.

It stands to reason that if the domestic private sector is made much stronger then it can bring a better balance to Trinidad and Tobago’s economy. In other words, a stronger domestic private sector can play a far more important and complementary role in economic growth and development of this economy.

I say complementary since I am not arguing for a diminution of the other two drivers of growth but for a far more dynamic and stronger domestic business sector. Indeed, partnering of domestic companies with foreign investors or public sector companies is a legitimate way to grow domestic capacity.

I view then, the domestic private sector as the third pillar of growth, whose potential has not been adequately explored. As such, in Mr. Burlingham’s language, the domestic private sector is a “giant”, still to be awakened. The challenge for the Caribbean is to help awaken this giant through training, networking and exposure to best practices, all of which should

expose our companies to limitless possibilities.

Interestingly, one interpretation of what Cuba is attempting to do with its still dormant private sector is precisely this. One can only wish it success.

The goal of all of us must be to build greater and dynamic local businesses that can transform the Trinidad and Tobago and Caribbean economies beyond oil and natural gas and tourism. Countries need to be more reliant on domestic investment so that, neither the drying up of foreign direct investment (FDI) nor inertia in public sector investment, leads to major economic contraction.

If our companies are great then our countries will be great. Great companies underlie great countries. Think of Samsung of Korea and Temasek of Singapore.

But the road to greatness depends importantly on a vision and a strategic plan that key stakeholders can buy into. Wherever plans exist, and some do exist, they need to be updated and operationalized as soon as possible.

The good news is that neither Trinidad and Tobago nor the region has to start from scratch. We do have a few indigenous companies in energy, manufacturing, finance, and other service sectors. These have demonstrated some level of success or “greatness” if you will, to borrow Mr. Burlingham’s word. But there are as well, dozens of small- and mediumsize companies doing business in a very wide and diversified range of activities. Most lack the ambition, skills and support to make the difference that is contemplated. The immediate challenge then, as I see it, is to deliberately target an expansion of the existing companies that have chosen to become great.

Trinidad and Tobago has several attributes which should serve to motivate other businesses to become world-class - not necessarily worldsize, in the spirit of what I understand Mr. Burlingham to be saying. According to the Ministry of Energy, Trinidad and Tobago is the number one exporter of ammonia, methanol and LNG to the USA. It is also the world’s seventh largest exporter of LNG. business journal | SEPTEMBER 2011 29

The fact is that businesses in the Caribbean have a good base from which to operate and expand. We have a relatively high standard of living, with several countries very high up on the UN’s Human Development Index. These countries are surrounded by several large countries with which they have trade agreements. This says that we are located in a good part of the world to grow our individual business and to use them as a springboard for outward expansion. It is this action which will build the third pillar, the domestic private sector.

The region also boasts of world-class musicians, calypsonians, “mas” bands, fashion designers, singers, sportsmen and sportswomen and I can go on. Suffice it to say, that domestic businesses need to capitalize on these attributes and pioneering efforts to emulate those who have excelled in these areas. By and large, these areas remain largely unexplored.

What I am arguing then, is that the domestic or regional private sector must be encouraged to play a greater role in complementing the foreign private and public sectors.

However, there must be a clear strategy for this sector as defined in a policy framework. The task is not as difficult as it might first appear given that some work already exists in the region and that there are some businesses already blazing some trails.

In conclusion, there is little doubt that regional businesses of all sizes, possess good potential for greatness. The region is punching above its weight in some respects but more needs to be done. Greater focus, greater support and a vision are necessary ingredients.

Ronald Ramkissoon is Senior Economist, Republic Bank Ltd.

“Success is the progressive realisation of a worthy goal or ideal.”

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Commentary Entrepreneurship in the caribbean

by Thomas W. Lynch

I

n 1985 while working in Texas I recognized a problem in that IBM PCs didn’t request a password, so I created a solution.

Yes, I made the classic mistake of skipping the marketing research and taking the approach of “build it and they will come,” but an old college buddy, Shin, introduced me to his boss Andy at company X. This company had big problems due to the lack of passwords on computers used in industrial control systems.

That was great because then I had the ideal formula for starting a company: Andy had a headache and I was the only vendor selling the right kind of aspirin.

As is typical of a start up, I was cash strapped. I could have taken my order from company X to a bank and requested a loan, but company X wanted the boards so badly they took over the problem and contracted them out to be built by one of their own vendors. Then came my second lesson in business. When Shin got wind of the contract he demanded a large cash fee for having introduced me to Andy. As an American engineer from the Midwest I was really surprised, but it didn’t matter as I didn’t have any cash. Shin was from another culture, and a college buddy, so I took a step back. I explained no one had made money from the deal yet and we should discuss the issue later.

When the boards arrived from the contractor they didn’t work. Company X blamed me for giving them a bad design. It turned out that none other than Shin had sent the design to the contractor. In my own defense I explained to Andy the situation about the kick-back.

In the U.S. kick-backs are illegal, so it was a serious allegation.

The day before the boards were returned Andy was a happy man, the day after he had paid for junk and had internal company and staff issues to deal with. His solution was to write off the junk and drop the project. I have not heard of Shin since. What would have been a win-win instead became a loselose-lose.

Now some twenty-five years down the road my colleagues and I have a collection of such stories of start-up problems and methods for dealing with them. Shin is representative of a group of people who when they hear the words “start-up” automatically conclude it is a party. This is far from the case. Start-ups are typically cash strapped, require more work than regular projects, pay badly, and they can take years to reach profitability - if ever. The rough rule of thumb is that 9 out of 10 start-ups will not make it. Many that fail, like the password board company, fail for human reasons rather than technical ones.

All of the conventional components of a functioning business are more difficult in a start-up. Finance is harder as there is no revenue base to draw from. Human resource management is more complex because part of compensation is equity, so the workers have to “believe.” Project management is tougher because specifications are untried and major revisions can occur. Marketing research takes on new dimensions as potential customers will insist on seeing a product before giving an opinion, but the product may not exist or a business journal | SEPTEMBER 2011 31

prototype may not be pretty. It does not work to tell customers to “just imagine”. Marketing communications may have an education component. Distribution channels are untried.

Sales contacts are often curious but not willing to commit to something with no track record.

And let’s be honest, despite the lip service to the contrary, innovation makes everyone uncomfortable. Customers really want more the same but better. For example, in the early 2000s I had a contract from an Asian client to create a new computer technology. The customer was so confident in my skills that he asked for “anything.” I created a social media technology.

The buyer was not happy, he said he expected “something like the others,” “something real.”

I tried to explain that it would not be innovation if it already existed, i.e real, and looked like the others. His response is typical because it is not reasonable to expect those who hire or invest in innovation to be visionaries themselves. And even us visionaries do not always hit the mark.

Though in this case the incredulous customer got more than he paid for as the innovation is now integrated in a Google product.

The process of creating start-ups has matured in the United States. Typically seed stage concepts in computer technology, communications, or pharmaceuticals are developed in an institutional environment such as a university or incubator and are backed by a modest amount of money augmenting existing salaries either under government or industry research grants. Also, angel investors are banding together to ameliorate the risk to their individual members. The new approach makes life easier for the seed stage employees as they are no longer required to trade off all their family time and possibly to fall short on 32

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their bills in exchange for belief in the company concept. The new approach is better for the companies as it mixes seasoned management with young first timers, so recurrent problems are not first time problems.

If a seed stage start-up demonstrates a profit making potential, and hopefully some revenue, it may progress to gather an “Around” from an venture capital firm. Venture firms themselves are companies. They will have professionals who sell bonds or other paper to create the fund in the first place, and they will have professional fund managers who review business opportunities that are presented by mature seed stage companies. Often the funds will have connections with seasoned managers in the focus areas of their investments, and will install these people in the new companies.

A new startup requires equipment, talent, customers, managers, and investors in the technology area who are knowledgeable and comfortable with fostering the start-up process. Thus it should be no surprise that high tech start-ups are most likely to occur in environments already saturated with talent and surrounded by willing customers. Many of the famous early start-ups formed about Stanford and MIT.

There are a number hurdles to overcome in bringing high tech entrepreneurship culture to the Caribbean. I have noticed, for example, that there is a cultural tendency to pull the same stunt that Shin did to sink the password board start up. Relationships and balancing of obligations is so strong here that one potential investor insisted I provide the names of people who proposed we talk as a requisite of our meeting. Also, sophisticated structures such as high tech incubators and venture funds are largely absent here. Because of this projects are

being funded in a manner that creates undue risk for the backers. If such projects fail these few investors will become disenchanted with innovation. In addition people in the islands come and go. It is built into the mentality here.

This plays against itself. Local companies who are made uncomfortable by innovation or startups can easily hasten a start-ups demise, and a start-up can easily pull up stakes and leave if the founders become unhappy.

It is my opinion it would be best for the entrepreneurial environment in the Caribbean to mature while taking an evolutionary path rather than a revolutionary one.

Accordingly the next step for the Caribbean in fostering entrepreneurship is to create programs and funds which are closely aligned to existing industries and education institutions. Such funds would take on the form

of joint development agreements for fostering increased competitiveness and wider market offerings for local industries. Industry insiders would participate to help these projects be successful. In addition the University of the West Indies, and other educational institutions would foster programs to support advanced industrial projects. Because projects would be incremental in nature, it is likely that they would be related to tourism, farming, shipping, and the energy and oil industry.

Thomas W. Lynch is a visiting entrepreneur at the University of West Indies, CS, Math Physics Department and CEO Reasoning Technology Ltd. www.ReasoningTechnology.com

Grenada’s Prime Minister At the U.N.

Grenada’s Prime Minister Tillman Thomas (third from left in front row) told the UN General Assembly that since meeting a year ago, the world and the UN have faced many challenges, economic, social and political, all of which undermine stability and people’s survival.

“The economic crisis continues to weigh heavily on Grenada: our population is experiencing high food and fuel prices; national revenues have decreased and debt continues to be high. The ‘green shoots’ of recovery which others experience have not reached us.

For us, the economic crisis of 2008 still rages and we must find a way out of it,” Mr. Thomas

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Women - Agents of Change

by Irene Sandiford-Garner

The Inter-American Commission of Women (CIM) was pleased to be part of the Caribbean Regional Colloquium on Women Leaders as Agents of Change and congratulates the Government of the Republic of Trinidad and Tobago on hosting the event. This was an opportunity to strengthen the collaboration that began with Prime Minister Kamla Persad-Bissesar’s inauguration of the First Hemispheric Forum on Women’s Leadership for a Citizens’ Democracy, hosted by the CIM and UN Women in April this year. The CIM thus welcomed the chance to enhance coordination with UN Women, the Caribbean Institute of Women in Leadership (CiWiL) and the Commonwealth Secretariat.

The CIM has been a pioneer of women’s civil, political, economic, social and cultural rights in the Americas for over 80 years. And still going strong, we continue to uphold the importance of achieving women’s human rights and eradicating violence and discrimination on the basis of gender, ethnicity, economic status, age, physical ability and sexual orientation.

In our efforts to transform entrenched gender paradigms, women’s leadership is a priority for CIM, as we bring women’s visions and demands to the forefront of democracy, human rights, security and development.

We share the vision of Millennium Development Goal 3, which commits governments, among other targets, to promoting gender parity in political 34

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representation and we are concerned that the Caribbean is a long way from meeting this commitment.

There is still a gap in women’s access to political power at every level. Despite having produced 22% of women world leaders, most of the countries of CARICOM average between 10-20% in terms of women’s representation in both the executive and legislative branches of power. Only Guyana, with 30%, and Trinidad & Tobago are approaching the relatively modest threshold of 30% female representation, and no country is near achieving parity in its legislative body.

We hope that initiatives such as the forwardlooking Caribbean Regional Colloquium will go a long way in challenging perceptions and changing behaviours and outcomes with respect to gender parity in political participation, representation and leadership. The Colloquium provided a space to address the issues of greatest priority to the women of this region and accelerating an agenda for Caribbean women’s leadership.

In this respect, CiWiL is to be congratulated for its muchneeded work on women and transformational leadership in the context of the Caribbean.

In 2010, our hemisphere celebrated The InterAmerican Year of Women under the theme “Women and Power: For a World of Equality”. Throughout that year, as we have done and continue to do, CIM underscored that women’s participation in all areas of society, politics

and the economy is directly linked to upholding human rights and is essential to peace and security, democratic governance and inclusive sustainable development.

The CIM Hemispheric Forum in April began an in-depth questioning of the principles and fundamentals of democracy and its institutions, from the perspective of women’s rights and demands. During the Forum, Prime Minister Persad-Bissessar emphasized in her keynote address that, “…women’s leadership is pivotal for progress in the interdependent areas of democracy and development,” contributing to a debate that aims to propose a vision of a citizens’ democracy that prioritizes, and promotes, the participation, representation and leadership of women at all levels.

CIM recently adopted a Strategic Plan for 2011-2016 that outlines our priorities in five programmatic areas: i) Women’s Substantive Political Citizenship for Democracy and Governability; ii) Women’s Economic Security and Citizenship; iii) Women’s Human Rights and Gender-based Violence; iv) Citizen Security from a Gender Perspective; and v) Institutionalization of a Rights-based and Gender Equality Approach in the work of the OAS.

In reviewing the Commonwealth Action Plan for Gender and Development for 20052015, as well as UN Women’s global priorities, we see that there are fundamental areas of common interest and potential collaboration with our hemisphere. Alliances and effective partnerships will help to maximize the great potential that we collectively bring to the Caribbean region.

As a matter of priority, CIM will identify the strategic areas in which our respective comparative advantages lie, guided by the established regional priorities of governments Proposed by UNDP and the OAS during the First Forum on Democracy in Latin American (Mexico City, October 12th to 14th, 2010), the concept of a citizens’ democracy is defined in contrast to representative electoral democracy, in the sense that it seeks to support the full participation and citizenship of all,, through the elimination of the economic and social inequalities that impede the exercise of that citizenship. Accordingly, a citizens’ democracy requires citizenship training for all in order to ensure that votes are informed, conscious and reflect a political position. From the perspective of women, a citizens’ democracy implies in-depth questioning of the nature and operation of current democratic systems, from the basis of parity in leadership, representation and participation. Source: UNDP and OAS. Nuestra democracia. Mexico: FCE, UNDP and OAS, 2010. http://www.nuestrademocracia.org/

in collaboration with civil society. Already, we have begun a substantive collaboration with UN Women in a number of different areas, and we are inviting other organizations to consider CIM as a partner and an ally in defending women’s rights in the Caribbean. We firmly believe that if we commit to supporting each other in this goal, we will realize accelerated progress, we will see tangible results, we will optimize the strategies and we will operationalize the solutions for the greater good of the Caribbean sub-region.

As agents of change, women’s multiple roles and our multifaceted contributions to nation-building must be recognized as central to a dynamic, diverse and prosperous society. Exponentially, we must ensure that a broad spectrum of women occupy decisionmaking positions, from local government to the hallowed corridors of state power.

This will reconfigure the interlocking political, economic, social and cultural systems where women and men operate in asymmetrical power relations to perpetrate and perpetuate deformities in our development and deficits in our democracy. Gender equality, including the strong, determined leadership of women, is the sure way to create and generate solid, safe, sustainable and prosperous societies and usher in lasting change.

Irene Sandiford Garner is a Senator in Barbados and a Vice President of the InterAmerican Commission of Women (CIM) of the Organization of American States.

This article is based on the speech she delivered at the opening ceremony of the Caribbean Regional Colloquium on Women Leaders as Agents of Change, held on July 28-30, 2011, in Port of Spain, Trinidad and Tobago.

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Company Profile

METHANEX TRINIDAD – STRONG GROWTH IN FIRST FIVE YEARS

M

ethanex Trinidad Limited is a young company, determined to emulate its parent company’s leadership status in the methanol industry. Charles Percy, the company’s first Chief Executive Officer and Managing Director describes Trinidad as the flagship manufacturing site for Canada-based Methanex Corporation - the world’s largest supplier of methanol with production facilities in Chile, New Zealand, Trinidad and Tobago, Canada and Egypt.

Exporting 100% of its methanol production, Methanex Trinidad Limited currently supplies approximately 50% of Methanex Corporation’s total production output, accounts for approximately 5.5% of world supply (2.5 million metric tonnes per year) and contributes to Trinidad and Tobago’s position as the world’s leading exporter of methanol.

Since May 01, 2006, Methanex Trinidad has managed and operated two methanol production plants on the Point Lisas Industrial Estate. The Titan Plant is wholly owned by Methanex Corporation and the mega Atlas Plant - a joint venture with BP Trinidad and Tobago LLC - is one of the largest single train methanol plants in the world.

Following an initial investment in excess of USD 700 million, Methanex has spent approximately USD 256 million in capital and recurrent expenditure over the past five years. The measure of its contribution to the development of Trinidad and Tobago extends beyond finance. Charles Percy points to the development of people, within the company and in its fence line and national communities as a notable barometer to assess the value added by his company.

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Charles Percy Managing Director and Chief Executive Officer

Ranked nationally in the top 25th percentile in leading remuneration packages, this young company has attracted some of the brightest professionals in the industry, and continue to attract numerous applications for its on-the-job training and mentorship programs from university and technical school graduates.

Indirect employment creation has benefited close to 13,000 persons during turnarounds and other heightened maintenance activities in the period 2005 to 2010. But it is the retention factor that is giving Methanex the edge as the Employer of Choice. Staffed by 178 permanent employees (all nationals of Trinidad and Tobago) and supported by contract teams, the company has built a firm foundation on the values of Trust, Respect, Integrity and Professionalism.

Panoramic view of Methanex’s 2-plant methanol production facility at Point Lisas, Trinidad.

In 2009 and 2010, Methanex Trinidad received the Energy Chamber’s ‘Recognizing the Value of People CSR Leadership Award, for which employees gave the company high scores.

In 2011, the Trinidad site’s Employee Engagement score of 74% topped the Corporation’s manufacturing group. “This score is unprecedented among the other plants within Methanex and speaks directly to our proactive role in the community, the way we turn our commitment into action and how we demonstrate Responsible Care in every aspect of our day-to-day business practices,” Percy noted.

Development opportunities in this global organization have also contributed to employee engagement and include participation on global teams and short to long-term assignments at other Methanex sites. Thirty-nine employees have been assigned to date: 14 to Egypt; 11 to Chile; 7 to New Zealand and 7 to Canada and USA.

Special facilities for employee welfare were among the priorities in the first five years and include an on-site medical centre providing services to employees and contractors; subsidized meals at an on-site cafeteria and a Wellness Centre that includes an ultra modern gym, an aerobics/yoga facility, a lounge and an adjoining football field.

Percy attributes his company’s success to highly motivated people, responsible business practices and value creation. Committed to operational excellence, Methanex Trinidad has articulated a Vision Statement affirming that

“By 2015, we will be globally recognized as the leader of the methanol industry, while nurturing our community, protecting our environment and caring for our employees.”

Methanex’s vision for “nurturing our community” is largely driven by employees and focuses on three social responsibility pillars: Education, Responsible Care (safety, health, environment and community outreach) and Employee Partnership. An investment of over USD 1 million has facilitated several programs that deliver long-term value.

Its “Mentoring Our Children” program has grown from two to four schools, as Methanex partners with employees to impact the lives of secondary school students and inspire them to be the best they can be, in spite of their family’s financial constraints. Methanex’s partnership with Habitat for Humanity is an extension of the Mentoring program and in 2009 and 2010, two houses were constructed: Methanex funded the construction material, employees painted the houses, the families provided sweat equity and Habitat for Humanity managed the project.

“Eco-Heroes”, the company’s signature project, fosters teamwork and employee volunteerism and is delivered in partnership with the Ministry of Education and participating schools. Launched with an annual walkathon fundraiser, students raise funds which Methanex Trinidad matches (up to a maximum of $10,000 per school), and schools undertake a project with an environmental theme that can be completed within one year. In 2009 and 2010, Eco-Heroes benefited 14 Primary schools, business journal | SEPTEMBER 2011 37

attracted over 1200 participants and raised TTD 364,000. Although the project began in the Caroni Education District, the intent is to expand nationally and include projects relating to water management, plastic recycling and teacher training to deliver environmental learning.

Other significant contributions include four bursaries annually to students of The University of the West Indies; Distinguished Lecturers Series with The University of Trinidad and Tobago; Gold Sponsor of the Graduate School of Business’ 2010 and 2011 Distinguished Leadership and Innovation Conference; and Platinum Sponsor of the Energy Chamber’s premier Energy Conference since 2009.

By integrating the ethic of Responsible Care (developed by the Chemistry Industry Association of Canada) into its value system, Methanex Trinidad is continually improving standards and practices for better worker safety and health, environmental compliance, process and product safety, emergency preparedness, security and community outreach. In 2010, the company achieved the distinction of having the best Responsible Care results among the Methanex manufacturing sites globally with zero lost-time injuries and the lowest ever injury rate, in addition to zero environmental non-compliances since 2005.

The first local company to be RC 14001 and ISO 14001 certified in 2007, Methanex Trinidad was re-certified in 2010, demonstrating its commitment to Responsible Care. Notably, in 2007 General Electric (GE)’s prestigious Ecomagination Leadership Award came to the Trinidad site – recognizing a collaborative project that delivered positive economic and ecological impacts with quantifiable results – for its Sea Cooling Water Biocide Optimization solution.

Beyond its traditional uses in the manufacture of a wide range of consumer and industrial products (such as building material, paints, resins and plastics), the fastest growing markets for methanol are in energy applications.

Fuel blending is expected to be the fastest growing methanol application, given its clean burning properties and higher octane value (than gasoline).

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Employees of Methanex

This is growing rapidly in China currently the only country in the world to have commercialized the use of methanol fuel blending.

A Memorandum of Understanding to evaluate the benefits, infrastructure impact and feasibility of methanol fuel blending in Trinidad and Tobago was signed on September 03, 2010 between Methanex Trinidad Limited and Methanol Holdings (Trinidad) Limited. If realistic and accepted, this initiative has the potential to reduce the fuel subsidy and produce strategic benefits for Trinidad and Tobago.

Methanex’s support for methanol as a fuel is demonstrated in its sponsorship of Trinidad and Tobago’s Sheldon Bissessar - champion drag racer and world record holder who has been using 100% methanol to fuel his vehicle for the past six years with exceptional results on the US drag racing circuit.

Looking back, Methanex has made significant contributions to the country’s revenues, employment and social responsibility in just five years. Looking ahead, the company is well-positioned to increase its strides in boosting the methanol industry and Energy Sector where it maintains a leading and vibrant presence. Supportive of expansion in the downstream industry, and focused on advancing the methanol value chain, Methanex is also engaged in proposals to Government for exploring downstream derivatives that could benefit Trinidad and Tobago through spin-off industries and employment creation.

TRINIDAD AND TOBAGO

Youth Forum on Climate Change 2011 “Our Earth, Our Voice, Our Action” The inaugural Youth Forum on Climate Change in Trinidad and Tobago will be held on Saturday November 5, 2011 at the Hyatt Regency Trinidad Hotel in Port of Spain, hosted by Earth Conscious Magazine and with support from the Ministry of Housing and the Environment and the Cropper Foundation.

Under the theme “Our Earth, Our Voice, Our Action” the Forum will bring together young persons between the ages of 13-25 from across Trinidad and Tobago to discuss the most pressing issue facing the world in the 21st Century - Climate Change.

The main goals of the Forum are: • To create awareness among young people on issues of Climate Change and Global Warming • To encourage environmental activities in communities • To bring together sponsors and youth organisations to make tangible interventions to develop and support actions and programmes • To build the next generation of leadership in sustainable development and climate change adaptation • A Declaration from the youth of Trinidad and Tobago to the UN Conference on Climate Change

For more information, please contact the Organizers at: hutchlin2@gmail.com

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BP Economist sees global growth According to Christof Ruehl, BP’s Group Chief Economist, the global economy showed strong signs of recovery in 2010.

Mr. Ruehl visited Trinidad and Tobago to present the BP Statistical Review 2011. The longest-running, consistent set of objective, global energy data used by business, academics, and governments to inform policy and decision making.

During his brief stay in the country, he met with Prime Minister Kamla PersadBissessar and other representatives of the government and members of the business community. He also met with bpTT staff.

Christof Ruehl

T

his marks the 60th year that BP has presented the report. According to the BP Statistical Review 2011, China became the world’s largest energy consumer in last year overtaking the USA during a year which saw the rebound in the global economy drive consumption higher and at a rate not seen since the aftermath of the 1973 oil price shocks.

Demand for all forms of energy grew strongly in 2010 and increases in fossil fuel consumption suggest that global carbon dioxide (CO2) emissions from energy use rose at their fastest rate since 1969.

The growth in energy consumption was broad-based, with both mature Organisation for Economic Cooperation and Development (OECD), or developed economies and non-OECD countries growing at above-average rates.

The strong rebound of global energy consumption in 2010 followed the recent global recession.

Consumption growth reached 5.6%, the highest rate since 1973. It increased strongly for all forms of energy and in all regions. Total consumption of energy in 2010 easily surpassed the prerecession peak reached in 2008.

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Demand in OECD countries grew by 3.5%, the strongest growth rate since 1984, although the level of OECD consumption remains roughly in line with that seen 10 years ago.

Non-OECD consumption grew by 7.5% and was 63% above the 2000 level. Consumption growth accelerated in 2010 for all regions, and growth was above average in all regions.

The economy and energy demand

Chinese energy consumption grew by 11.2%, and China surpassed the US as the world’s largest energy consumer. Oil remains the world’s leading fuel, at 33.6% of global energy consumption, but it continued to lose market share for the 11th consecutive year.

GDP and energy growth

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REPSOL NAMED MOST TRANSPARENT AND SUSTAINABLE OIL COMPANY Repsol has been recognised as a leader in the Oil & Gas sector in the 2011 edition of the prestigious Dow Jones Sustainability Indexes, obtaining the highest score out of 12 oil companies included in the global index (DJSI World), and 118 oil companies evaluated around the world. The company also leads the industry in the European Oil & Gas Index (DJSI Europe) which includes 3 European companies.

The company has been awarded the highest score in the DJSI World for transparency, risk and crisis management, environmental management system, biodiversity, climate change strategy, refining and clean fuels, human capital development, social impact on the community and communication with its stakeholders.

Repsol has also achieved the highest score in the sector for its customer relations management, corporate responsibility and philanthropy, and supplier and contractor standards.

Repsol has been included in the prestigious global sustainability indexes since 2006, Dow Jones Sustainability Index World (DJSI World) and the European index, Dow Jones Sustainability Index Europe (DJSI Europe). DJSI rigorously analyses and evaluates the behaviour and performance of companies based on economic, social and environmental criteria.

Since its inclusion in the DJSI, Repsol has always been amongst the best companies in its sector. The leadership achieved in this latest edition is a result of the effort made in all areas of the company, driven by its management team, to improve performance. This recognition demonstrates Repsol’s unequivocal commitment to transparency, corporate responsibility and ethical, environmental and social values as part of its corporate culture.

The Dow Jones Sustainability Index is a family of indexes whose members must demonstrate advanced practices in the different areas that constitute corporate responsibility. Only 10% of the 2,500 securities that make up the Dow Jones Global Index, made op of listed companies in major markets throughout the world, are included of the Dow Jones Sustainability Index, after passing a rigorous review and selection process.

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Oil Consumption Hits All-Time High World Consumed 87.4 Million Barrels Per Day in 2010 Global oil consumption reached an all-time high of 87.4 million barrels per day in 2010, according to a new Vital Signs Online report from the Worldwatch Institute. The 3.1 percent increase more than makes up for the brief decline in consumption caused by the economic crisis.

“Between the recession, the BP oil spill, and instability in the Middle East and North Africa, oil markets have been on a roller coaster the last few years,” said Worldwatch Sustainable Energy Fellow Saya Kitasei, who co-authored the report along with Worldwatch researcher Natalie Narotzky. “When the dust settles, however, it is clear that the momentum of future market growth has moved to the developing world, where oil consumption did not miss a beat during the recession and shows no sign of slowing.”

Key findings from the report, which can be found at vitalsigns.worldwatch.org, include: •

•

•

• •

•

After falling 1.5 percent between 2008 and 2009 due to the global financial crisis, global oil consumption recovered by 3.1 percent in 2010 to reach an all-time high of 87.4 million barrels per day.

Oil consumption in countries belonging to the Organisation for Economic Cooperation and Development (OECD) was more than 7 percent lower in 2010 than in 2005, while consumption in non-OECD countries is up 20 percent since then.

In 2010, oil remained the largest source of primary energy use worldwide, but its share of this use fell for the eleventh consecutive year, to 37 percent. Responding to this falling demand, global oil production fell 2.1 percent to 80.3 million barrels per day in 2009.

One third of the increase in consumption came from China, which now uses over 10 percent of the world’s oil.

Political unrest in the Middle East-North Africa region and uncertainty about new regulations on deepwater offshore oil drilling have both further contributed to volatility in the global oil market.

The Middle East remains the largest exporter of oil with 35.3 percent in 2010, followed by the former Soviet Union and the Asia Pacific region.

• Global proved oil reserves have been increasing since 1980 and reached an estimated 1,526 billion barrels in 2010.

• Canadian oil sands now contribute around half of that country’s crude oil production and are expected to provide a growing share, but they are energy- and water-intensive to develop. In the case of pit mining, they can lead to extensive landscape alteration and large waste streams of toxic mining tailings.

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Commentary Extractive Industries Transparency Initiative (EITI) explained

By Victor Hart, Chair, EITI Steering Committee.

The Trinidad and Tobago Government announced on 8 December 2010 that it was applying for membership of the Extractive Industries Transparency Initiative (EITI) and named a stakeholders’ Steering Committee to oversee the process.

The EITI is a voluntary international coalition of governments, companies engaged in the extractive industries (oil, gas and mining), civil society groups, investors, donors and international development agencies managed by a stakeholders-elected Board and Secretariat in Norway. Launched in 2002, it has 35 members (representing 900 million people) of the estimated 53 countries that are rich in natural resources. Most members are from developing countries but, with Norway now a full member, other developed countries are expected to follow suit. About 50 of the world’s largest oil, gas and mining companies actively participate in the EITI process through their country operations in implementing countries.

It was founded because of concerns by civil society organisations and others from developing and developed countries that too many of the 3.5 billion people from the resource rich countries lived in poverty and underdevelopment. It was felt that this had gone unchecked because of the lack of transparency and accountability over the income from the exploitation of their natural resources with resultant mismanagement and, in many cases, corruption.

The EITI supports improved governance in resource-rich countries through the full 44

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publication and verification of receipts and payments between governments and companies.

The rules require governments to publicly declare the revenue received from companies (national and foreign) and companies to publicly declare the payments made to governments.

The process is robust but flexible and is overseen by participants from government, companies and civil society. Independent auditors, who have to make public their findings, reconcile the payments and receipts and investigate any differences between the two public declarations.

These requirements act as a major disincentive to corruption.

Citizens benefit from the initiative because their full participation in the EITI is a public recognition that the country’s natural resources belong to them and that they have the right to independently verified and easily accessible public accounting of the revenues earned. Knowing what companies pay and what government receives for their resources is a critical first step to enable citizens to hold decision-makers accountable.

Government’s image benefits from its implementation of a standardized and internationally recognized procedure for natural resource management. The decision to reconcile company payments and government revenues, via a multi-stakeholder process, signals a commitment by government to good governance, improves its international credibility and affirms its commitment to fight corruption.

An improved investment climate results from government’s clear signal to investors that it

is committed to strengthening transparency and accountability over natural resources revenues.

Companies, investors and importing countries benefit by conducting business on a level playing field with reduced likelihood of corruption and increased political and economic stability, essential ingredients for capitalintensive long-term investments.

T&T was admitted to EITI membership on 1 March 2011 and granted EITI Candidate Country status. We now have entered the challenging two-year EITI implementation phase during which the necessary legal and administrative systems agreed upon by stakeholders will be put in place to satisfy all

EITI criteria and the first annual EITI Report published. Finally, T&T will have to pass a stringent independent validation test of its EITI systems before being granted EITI Compliant Country status, the highest level of EITI membership.

Successful EITI implementation calls for a collaborative effort and the full support of and participation by all stakeholders, therefore, public and private sharing of information, dialogue and feedback will be provided by the Steering Committee via the media, meetings and workshops.

Without a doubt, membership of the EITI is a win-win situation for T&T and its extractive sector stakeholders.

Further decline in Trinidad’s gas reserves Trinidad and Tobago’s natural gas reserves have declined for a fourth consecutive year in 2010 but new Energy Minister Kevin Ramnarine assured that gas is “not running out.”

The 2010 gas audit conducted by US-based Ryder Scott showed that proved reserves stood at 13.4 trillion cubic feet (TCF), probable at 7.6 TCF, possible at 6 tfc and Exploration resources at 26 tcf. In 2009, proved reserves were 14.4 tcf, probable at 8 tcf, possible at 6 tcf and Exploration resources at 26 tcf. Gas production last year was 1.5 tcf.

Larry McHalffey, Senior Petroleum Engineer at Ryder Scott said based on the decline in the 3P reserves, the country ideally needs a 100 percent reserve replacement but only managed a 35 percent replacement last year.

“Exploration activities, leading to drilling of exploratory prospects are encouraged to increase the 3P reserve base. Field activities to bring proved underdeveloped, probable and possible reserves on-line is becoming more critical, “he said at the launch of the latest gas audit. Trinidad and Tobago is highly dependent on the Energy sector which contributes close to 40 percent of GDP, 40 percent of revenues and is the largest source of foreign direct investment.

Mr. Ramnarine said the country would like to be in a position to have a 100 percent reserve replacement in proven and probable reserves and that his ministry will work with companies that have the majority of exploration resources to facilitate their movement to the proven category.

“We mentioned last year that there was a critical need for Trinidad and Tobago to encourage exploration, appraisal and development drilling to move resources into one or more of the reserve categories and to discover new resources,” said the Energy Minister.

While exploration drilling of gas did not take place in 2010, Mr. Ramnarine expects that by the second and third quarter of 2012, a number of wells should be spudded in several gas prone blocks awarded in the 2010 bid round - which contain in excess of 5 tcf of gas. He said the audit did not take these blocks into consideration.

The recent award of two deep water blocks to BP Exploration Energy Company (BP EOC) are also estimated to have unrisked natural gas resources of 4.7 to 8.2 TCF.

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Abbreviated speech by Secretary General of the International Telecommunications Union (ITU), Dr. Hamadoun I. Touré at CANTO’s 27th Annual Conference & Trade Exhibition 2011 held in Paramaribo, Suriname in late July.

I

am greatly honoured by this opportunity to be with you today in the fine city of Paramaribo for the opening of CANTO’s recent 27th Annual Conference and Trade Exhibition.

With over 100 members from more than 30 countries, CANTO is not only the leading telecommunications trade organization in this region, but also plays an important role in ITU – and we are very grateful for CANTO’s support for and participation in ITU’s work.

As the Secretary-General of the UN specialized agency for ICTs, it is a great pleasure to see that CANTO’s focus at this year’s conference is on ‘the use of ICTs for social and economic development’.

Here in the Caribbean, quite exceptional progress has been shown in ICT development, particularly in mobile cellular communications.

Indeed, many of the countries in the Caribbean now have mobile penetrations of well over 100%.

Here in Suriname, the extraordinary figure of 170% was surpassed at the beginning of this year, placing Suriname right up amongst the global leaders in mobile cellular penetration – and making Suriname, along with other Caribbean nations, likely to be one of the first handful of countries in the world with an average of more than two mobile phone subscriptions per inhabitant.

With progress like this, we have successfully brought basic communications within reach of most of the world’s people over the past decade or so.

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And I am very pleased to see efforts in this region to improve ICT harmonization between countries – with significant benefits already being derived from the ITU / European Commission Project on the ‘Harmonization of ICT Policies, Legislation and Regulatory Procedures in the Caribbean’, HIPCAR.

The second phase of HIPCAR is currently under negotiation, and I am confident that it will deliver further benefits to the region.

The big challenge now of course for this region, as for others, is to repeat this mobile miracle for the Internet, and in particular for broadband.

Broadband needs to reach everyone, in all nations, because it is absolutely key to furthering social and economic development in the 21st century, and to achieving the Millennium Development Goals.

Ladies and gentlemen,

We live in an extraordinary era, where a combination of fixed, wireless and satellite technologies have given us the power to reach every corner of every country, regardless of geography or topography. This, of course, is essential in a region like the Caribbean, with its great geographic diversity.

We have the technical means to bring advanced ICTs to all the world’s people – and I am pleased to see that in the Caribbean, as in other regions, we find that:

• Governments are ready to allocate resources to bring everybody into the Information Society; • Companies are willing to invest where benefits can be obtained, and are also willing to contribute to enabling universal access; and • Citizens continue to demonstrate a remarkable appetite for ICTs in every form, even at times of economic downturn.

At ITU, we are prepared and eager to work to help fulfil everyone’s fundamental right to communicate, and their desire to play a meaningful role in the information and knowledge society.

Two things need to happen, however, before everyone can have access to the vast benefits of broadband.

First, it needs to become much more affordable.

Among the data we publish at ITU is what we call an “ICT Price Basket” – and this reveals the huge gaps that still exist between the haves and the have-nots, particularly where broadband is concerned.

In the 31 countries at the top of the broadband list – those where broadband is most affordable – a fixed broadband subscription costs less than 1% of average monthly income.

But at the other end of the scale, for people who live in the 32 countries where broadband is least affordable – most of them UN-designated Least Developed Countries – a fixed broadband subscription costs over half of average monthly income.

We must do everything in our power to reduce this glaring inequality, and make broadband affordable for all.

Second, we need to bring broadband to the top of all national development agendas.

This is why ITU, in conjunction with UNESCO, launched the Broadband Commission for Digital Development last year – to encourage governments to implement national broadband plans and increase access to broadband applications and services.

The Commission is co-chaired by President Paul Kagame of Rwanda and Carlos Slim, Honorary Lifetime Chairman of Grupo Carso.

Irina Bokova, Director-General of UNESCO and myself serve as co-vice-chairs.

We also have over 50 Broadband Commissioners – all top-level leaders in their field – representing governments, industry, academia and international agencies.

They have defined a vision for accelerating the deployment of broadband networks worldwide, with the aim of improving the delivery of services across a huge range of social and business sectors, and accelerating progress towards the MDGs.

This is a great example of how partnerships between UN agencies can really deliver results.

Another good example is ITU’s partnership with another of our sister UN agencies, the World business journal | SEPTEMBER 2011 47

Health Organization, on an initiative entitled the ‘Commission on Information and Accountability for Women’s and Children’s Health’.

The Commission was co-chaired by Jakaya Kikwete, President of Tanzania, and Stephen Harper, Prime Minister of Canada. I was very proud to act as co-vice-chair of the Commission, along with Margaret Chan, the Director-General of WHO.

The Commission has now delivered its final report, which will be presented to the UN General Assembly in September.

Initiatives such as these demonstrate ITU’s continuing commitment to the ‘One UN’ concept, which has been strongly championed by recently re-elected UN Secretary-General Ban Ki-moon, and to which we are all accountable.

Ladies and gentlemen,

As more and more of the world’s people get online, and as we all – from governments to enterprises to individuals – become more dependent on technology and particularly the Internet, we also need to recognize the growing importance of cybersecurity.

ITU is therefore proud to have forged a strong and highly supportive relationship with IMPACT – the International Multilateral Partnership Against Cyber-Threats.

As the world’s first comprehensive alliance against cyberthreats, IMPACT is the key organization fulfilling ITU’s cybersecurity mandate in an operational sense, providing our 192 Member States with access to expertise, facilities and resources to effectively address 48

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cyberthreats, as well as assisting UN bodies in protecting their ICT infrastructures.

Already more than 130 countries are now formally part of the ITU-IMPACT operational deployment, and I would encourage all remaining Member States and UN bodies, as well as regional organizations, to join this global endeavour, so that they too may benefit from the services and capabilities provided.

As well as the ITU-IMPACT partnership, we are also joining forces with the United Nations Office on Drugs and Crime – UNODC – to collaborate globally on assisting Member States in mitigating the risks posed by cybercrime.

We have also signed an MoU with Symantec Corporation, which will provide ITU with expert intelligence reports on current and future trends in ICT security, to be shared amongst all ITU Member States.

In parallel, we are also considering issues of child online safety. To address the global challenge of protecting children online ITU launched the Child Online Protection initiative, COP, in 2008, as a multi-stakeholder coalition within the framework of ITU’s Global Cybersecurity Agenda.

Since then, ITU has been offering a platform for global cooperation where different constituencies can share their views and best practices. I would like to refer to the global COP Guidelines, for children, parents, industry and policy-makers, which were developed by a multi-stakeholder group of COP partners, as one example.

Moreover, with our new patron, President Chinchilla of Costa Rica, our COP initiative is now working to transform the COP guidelines into concrete activities which will deliver significant national benefits, such as the development of national strategies on child online protection, the establishment of national hotlines, or the development of interoperable standards and related recommendations to protect children online.

Starting with Costa Rica, we are focusing on Latin American countries’ activities in this important area. I would like to call upon countries of the region and all interested stakeholders to

work together with ITU in making the online experience for children everywhere a more secure and a safer one.

Distinguished colleagues,

Let me close with a few words on a subject that is especially important in this particular region: emergency communications and disaster response.

ICTs are not just essential to social and economic development, but also play a crucial role in several different areas, including monitoring and warning; disaster preparedness; and emergency communications. Let me address these one at a time.

Concerning monitoring and warning, enormous progress has already been made, especially in terms of being able to take action ahead of extreme weather events, and especially hurricanes and cyclones. Advance warnings made possible by satellite tracking and monitoring systems regularly save many lives.

Remote sensing is of course also very important in terms of environmental monitoring and climate change mitigation.

Turning now to disaster preparedness, ICTs play a dual role, firstly in giving people on the ground a much better chance of survival, and secondly in allowing for a better, faster and more efficient and effective response, when disasters do occur.

Small improvements in technological progress can make a huge difference in this regard – for example getting more accurate and timely weather data, or even something as simple as today’s communication devices having much-improved battery-life.

Finally, looking at emergency communications, we may not be able to prevent catastrophes from occurring – and in the case of earthquakes it is often impossible to provide any warning they are about to occur – but ICTs can play an absolutely vital role when disasters do happen.

Most notably, we can help to restore vital communications on the ground – via the use of satellite phones and mobile base stations,

for example – even when existing physical communications network infrastructure has been destroyed.

And we have seen the incredible benefits of this when disasters have occurred in recent years – from helping families to get news of missing loved ones, to helping medical staff know when and where they are most urgently needed, to helping coordinate search and rescue teams and the provision of relief supplies.

ITU provides assistance at all phases of disaster management, and in this region we were quick to provide communications equipment to Haiti and Chile immediately after the earthquakes that affected those countries last year, in order to help their administrations mitigate the effects.

Furthermore, both ITU’s Standardization and Radiocommunication Sectors are working on this issue – in developing specific standards in the case of the former, and identifying spectrum resources to be allocated to deal with emergency communications in the latter.

business journal | SEPTEMBER 2011 49

Premature fiscal tightening endangers global recovery Trade and Development Report Warns of Consequences of Fiscal Tightening

UNCTAD´s Trade and Development Report 2011 (TDR 2011)warns that fiscal tightening only addresses the symptoms of the problem, leaving the basic causes unchanged. Higher public debt ratios are a consequence of the crisis, not its cause. A fiscal policy that supports growth is more likely to reduce fiscal deficit and to curb public debt ratios than a restrictive fiscal policy is.

The Trade and Development Report 2011: Post-Crisis Policy Challenges in the World Economy, released in early September argues that a shift from fiscal stimulus towards fiscal tightening is self-defeating, especially in the most developed economies which were severely hit by the financial crisis. In such a situation, a restrictive fiscal policy may reduce GDP growth and fiscal revenues, and is therefore counterproductive in terms of fiscal consolidation.

The TDR 2011 shows that fiscal imbalances were not a driving factor of the crisis, but were, rather, a result of the crisis.

Between 2002 and 2007, fiscal balances had improved significantly in most developed and developing economies, as a result of growth 50

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in output, lower interest rates, and, in some countries, the price boom in commodities. The crisis caused a significant deterioration in public sector accounts, as automatic stabilizers and fiscal stimulus packages were put in place. In several developed countries, public bailouts of financial institutions accounted for a large portion of the deficit, reflecting a conversion from private into public debt.

As a result, the median public debt-to-GDP ratio in developed countries almost doubled, to more than 60 per cent of GDP, between 2007 and the end of 2010. Economic growth in developing countries, as a group, suffered less impact from the financial crisis, partly thanks to active countercyclical fiscal policies; as a result, fiscal balances improved in 2010 and debt-toGDP ratios remained in check.

The main argument that is usually advanced in support of fiscal tightening is that it is indispensable in order to restore the confidence of financial markets, which is perceived as being key to economic recovery. But in light of the irresponsible behaviour of many private financial market actors, which has required costly government intervention to prevent the collapse of the financial system, public opinion and policymakers should not trust again those institutions, including rating agencies, to judge what constitutes sound macroeconomic policies and sound management of public finances.

The reduction in growth-promoting fiscal expenditure may lead to a decline in future government revenues that will be larger than the fiscal savings obtained by retrenchment with negative consequences for long-term fiscal and debt sustainability.

Countries that put fiscal tightening packages in place during the 1990s and 2000s as part of IMF-supported programmes have

failed to consider these dynamic effects. In countries where fiscal tightening was expected to reduce the budget deficit and restart growth, deficits actually became worse while GDP growth stalled. In the present situation, the current fiscal tightening policies adopted by some countries are likely to deliver similar negative results.

There is a widespread perception that space for a continuation of fiscal stimuli is already exhausted, especially in developed countries. But fiscal space is not a static variable.

An expansionary fiscal policy can have strong effects on demand, increase private-sector incomes, and generate higher fiscal revenues.

It is possible to extend the economic impact of fiscal policies by changing the composition of public expenditure or structuring public revenues in a way that maximizes their multiplier effects without necessarily modifying the total amount of expenditure or the fiscal balance.

The TDR 2011 shows that the way the public sector spends and taxes is not neutral.

Increases in spending on infrastructure, social transfers, or targeted subsidies for private investors tend to be more effective in stimulating the economy than tax cuts, because they directly lead to job creation, purchases, and demand.

Often, the proceeds of reduced tax payments for higher-income groups are not injected back into the economy. History has shown that if tax cuts are the preferred instrument, cuts for the lower-income groups are more effective in raising demand and national income than tax cuts for higher-income groups.

Out of necessity, lower-income groups tend to spend their earnings in the local economy.

The challenge for highly indebted developed countries is how to grow out of debt, with growth-enhancing fiscal, monetary and income policies. GDP growth combined with low interest rates is the best strategy for reducing public debt ratios over time. If these cannot be attained because of an external constraint or outright fiscal insolvency, priority should be given to resolving the balance of payments or restructuring the debt, rather than to introducing austerity measures.

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business journal | SEPTEMBER 2011 51

The Lighter Side...

“We are not a nation of scholars Sir, but rather, a nation of scullers”.

“What?” I asked, just before bursting into laughter.

A scull is Trinidad and Tobago slang for a scam or a shortcut that seriously compromises the quality and standards of the end product.

A scull is similar to a ratch to arrive at an end result using dishonest or dubious means.

The interesting opening statement was delivered by a man of the cloth who has been an influential educator for more that 30 years.

“You serious Father?” I chuckled. “Absolutely,” he said. “We are always looking for a way to do the absolute minimum, or even nothing at all and still demand a maximum return. The art of deception and the science of trickery seem to be compulsory subjects. Everything is a scull.”

Are we really like that? I thought of Brian who has a job working 8 to 4, but usually looks for a way to sign in (or get someone else to sign in on his behalf) and then leaves early to run a small business on the side. He boasts that he’s smart and “sticking it to the Man.”

Then there’s Sammy who gets contracts to build houses. He looks for the cheapest material; cheapest labour and even modifies the specifications in order to pocket the extra money. Just before completion, he slaps on a few coats of paint to hide his sub-standard 52

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work and feels proud. Not the pride of a job well done, but the misplaced arrogance that comes from getting away with the fraud.

This appears to be the socially accepted behaviour of the smart-man (trickster).

Many, it seems, would rather be a smart-man than make the effort to be the intelligent, honest man.

The sad part is that this sculling is such an integral part of society that we teach it to our children.

We think we are helping them survive in a dog eat dog world. Instead of teaching them how to avoid being bitten, how to catch dogs or how to be first class dog handlers, we train them to be pit bulls. What madness!

Instead of using our time to understand how things should be done, we obsess over finding ways to manipulate the system to get something for nothing, or a lot for very little.

Often we spend more time and energy looking for a short cut than if we had just gone ahead and done what needed doing.

The pattern can also be seen in the workplace when people want to get to the top.

Instead of climbing the ladder of success some search for an elevator. They lie on the resume and put on a performance at the interview. If they should get the job or promotion, it soon becomes apparent that they are ill equipped to handle the position because they do not have

the knowledge or hands-on experience. The result is that they are fired or forced to step down a few rungs on the same ladder they tried to bypass.

How about in business? Are invoices ever undervalued in order to pay less duty? Is it okay to pay the lowest possible wages to employees while putting the highest markup on goods?

When the price of raw materials increases consumers are usually expected to shoulder the extra cost. How often do you hear business operators offer to share the burden with customers and absorb some of the increase?

In your dreams! All too often what we hear is, “Prices have increased on the international market, fuel costs have been raised. The increase will have to be passed onto the consumer”. Mr. and Mrs. Average have to find the extra dollars so that Mr. and Mrs. Business Operator can maintain their standard of living.

“That’s not fair,” I hear you protest. “The business operator has to take all the risk as well as layout substantial capital upfront.” Okay, agreed, but you can’t tell me that if the customer has to tighten his/her belt three inches that the business operator can’t tighten his/her belt at least an inch.

This is not about finger-pointing. We are all to blame. We have come to believe that it’s okay to “try a little ting”, take the easy route, even grease some palms passing a few dollars under the table if it will speed up the process.

There are those who are actively seeking ways to “make a fast dollar” as long as they don’t get caught. They have no problem breaking the little laws. They hide behind the pathetic excuse: “Well, everyone else is doing it.” The problem with that rationale is that if two thousand people are doing something wrong that does not make it right. It just means we have two thousand culprits.

Strangely we ignore the connection between the scull, poor work ethics, cheating, corruption and crime. The scull is like an addiction. As we continue to get away with the dishonesty we try our hand at something bigger.

Eventually, we begin to believe it’s our right to break these little laws, after all, they are never really enforced. When it becomes acceptable to break laws, who decides which laws are okay to break and which ones are not?

Who’s going to know.....

business journal | SEPTEMBER 2011 53

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