The EC Dollar Gets A Facelift

THE STAR Businessweek MARCH 16, 2019

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in this edition of

The EC dollar gets a facelift Grubby, worn and crumpled, paper banknotes will soon be a thing of the past in the Eastern Caribbean as the region gets set to welcome new plastic-based currency.

By Catherine Morris, STAR Businessweek Correspondent

SBW THE STAR Businessweek

Beyond the Poker Face: Growth in the Gambling Industry The gambling industry has always been the subject of fierce political debate. This is the case in nations throughout the Caribbean, throughout the Americas, and around the world Page 3

Festival Fever Saint Lucia is a great place to soak up the sun and take a break from the daily grind, but it’s also a good place to party, as more and more tourists are discovering, thanks to a plethora of events and festivals designed to introduce visitors to all aspects of island life Page 7

Continued on page 4

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MARCH 16, 2019

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A New Chapter in the Venezuela and Guyana Esequiba Dispute

By ED Kennedy, STAR Businessweek Correspondent

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BY Christian Wayne – Editor at Large

This June, the Eastern Caribbean Central Bank will begin phasing-out the current paper-based bank notes in favour of an updated polymer bank note. According to senior director of corporate relations at the ECCB, Shermalon Kirby, this move will not only increase the bank’s ability to battle currency counterfeiting but will also reduce the environmental impact associated with the existing cotton-derivative notes. For more on this initiative, read this week’s lead story The EC Dollar Gets A Facelift starting on the cover. Interestingly, this isn’t the only project that the ECCB is working on that will impact the eastern Caribbean’s usage of cash. As outlined in a press release put out by the bank last week, the ECCB and Barbadosbased fintech firm Bitt will soon begin a pilot project focused on introducing a digital Eastern Caribbean dollar as an alternative payment method for Eastern Caribbean banking clients.

The move is aimed at reducing transaction costs while also encouraging the use of cashless payments in a region where cashbased transactions comprise almost 100% of all transactions. The pilot is being heralded by Bitt and the ECCB as the “world’s first digital legal tender currency to be issued by a central bank on the blockchain”, according to ECCB Governor Timothy Antoine.

STAR Businessweek readers will also find a follow-up to an article published last month that described the increasingly blurred lines that distinguish the traditional bricks and mortar gambling industry from the growing video-gaming industry. This second instalment, titled Beyond the Poker Face: Growth in the Gambling Industry, starts on page 3.

We’re also taking a look at an often underreported aspect of Venezuelan foreign policy in the form of the country’s ongoing territorial dispute with Guyana over a 159,500 sq. km region known as Guyana Esequiba. With the recent Guyanese oil discoveries made offshore the Esequiba zone and Venezeula’s increasingly desperate economic position, the Guyana Esequiba dispute will surely bubble once again to the surface of regional politics within the coming months. For more, check out A New Chapter in the Venezuela and Guyana Esequiba Dispute, beginning here on page 2.

It’s Nothing Personal. It’s Business.

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The portion today under the administration of Guyana divides the area in six administrative regions, while Venezuela treats it as a single entity

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he dispute between Venezuela and Guyana surrounding ownership of the Esequiba territory traces its origin back centuries. Like so many territorial disputes around the world, the quarrel between Caracas and Georgetown is one that not only impacts the dayto-day life of these two nations, but neighbouring states too.

2019 sees this dispute viewed through a new lens, as both the Venezuelans and Guyanese have had momentous chapters written in their histories over the past year. So what is the latest surrounding this territorial dispute? Let’s look indepth now.

The New Dynamics of the Dispute

Anyone who follows closely the Esequiba dispute knows that it’s one that is both ongoing and relatively uneventful although in recent years and months the dynamics have fundamentally altered and ‘old certainties’ can no longer be relied upon.

Guyana’s discovery of massive oil reserves in 2015 has changed both the nation’s future and its relationship with its neighbour, Venezuela. For years, Caracas has looked to frustrate the efforts of Georgetown to develop its offshore oil industry in the disputed territorial waters, doing so as ExxonMobil’s 2015

exploration returned a conservative estimate of 4 billion barrels residing in the Stabroek Block owned by Guyana.

In December 2018 the latest chapter in the conflict kicked off when two ExxonMobil ships, searching with Guyana’s permission, were confronted by the Venezuelan Navy.

While the incident was resolved without hostilities, questions remain as to whether future private vessels operating in partnership with the Guyanese government will receive naval protection as they carry out their duties, considerably raising the risk of a skirmish should Venezuela’s navy arrive on the scene.

The risk of greater conflict is also higher given the unique position in which both sides find themselves in relation to their history. Guyana, with a population of around 800,000, now has a voice as a newly oil-rich nation, officially backed by Washington DC. Conversely, Venezuela has weakened; it is a country of some 30 million people facing a major national and humanitarian crisis. In spite of international recognition of Venezuelan congress head Juan Guaido as interim president, President Nicolas Maduro has proven to be ready to raise tensions in order to maintain his grip on power.

No observer wishes for conflict to grow but, as the relative fortunes of

both nations have changed drastically, the old dynamics have clearly evolved with much unpredictability and uncertainty.

A Common Voice in Venezuela

This fate of Esequiba is a rare issue that has united Venezuelan leaders across the political divide. The ExxonMobil incident saw President Nicolas Maduro briefly embrace the National Assembly led by the opposition. But this unity can only progress their claim so far. The reality is that the Venezuelan leadership — whomever you deem in the nation’s group of leaders to rightfully hold that title — is struggling with the simple day-to-day operations of the state. As a result, Caracas is in no position to develop oil fields as Guyana has been doing. Further, Venezuela’s reticence towards the International Court of Justice’s involvement in seeking to resolve the dispute during mid-2018 saw further political capital ebb from Caracas.

Yet this issue is also unquestionably one of civic pride and history for Venezuela and, given its origins in the colonial period, any movement that alters the status quo is fraught with sensitivity and risk.

Continued on page 5

Gambling Industry

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MARCH 16, 2019

Beyond the Poker Face: Growth in the Gambling Industry

By ED Kennedy, STAR Businessweek Correspondent

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he gambling industry has always been the subject of fierce political debate. This is the case in nations throughout the Caribbean, the Americas and around the world. Opinions will differ over which side has the winning argument but, with a predicted yield in 2019 of US$ 495bn, and a projected value of $525bn by 2023, nobody can dispute the colossal financial aspect.

Between the back and forth, research has been done on the gambling industry — its economic pros and social cons, and its impact, for better or worse, on the community. With the gambling industry set to expand, in Saint Lucia via the Pearl of the Caribbean project, and further abroad via other new casinos and online gambling, it’s a fitting time to go beyond the day-to-day of the debate and look in-depth at the industry

Putting your Cards on the Table

Whether you love or loathe the existence of the industry in the region, the wider debate surrounding it usually falls along one of two lines. On one side there is the argument that the introduction of a new gambling venue, like a casino, can create many jobs in a local community. On the other side, it can be countered that a new venue may also give rise to social problems like increased gambling addiction, crimes such as prostitution, and questionable economic benefits due to the often unusual taxation structures.

Advocates point to the immense economic benefits that can be brought to a community in terms of service and entertainment jobs. Critics accuse proponents of the industry of ‘hollowing out’ the community by introducing a commercial operation that sees local economic benefits

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earn billions but pay just a few hundreds of thousands (if that) in tax revenue, is rightfully controversial.

This is further evidence of the greater divide growing between those who utilise the gambling industry and those who work within it. It is why, in recent months, the gambling debate in the Bahamas has been such an important one, not only for the nation of 400,000, but for the Caribbean family as a whole.

While there was considerable outcry by gambling businesses over the proposed tax of up to 50% on earnings, the existing taxation rate of 25% of earnings or 11% of gaming revenue — whichever is greater — could fairly be seen by many as outdated, given the explosive growth of the online gambling industry.

Making an Even Bet Online gambling is set to be a US$ 81bn industry by 2022

offset by the need for new social support programmes.

The History of the Gambling Industry in the Caribbean

The Caribbean will always be a locale that entices visitors from all walks of life. Just as it is a dream domain for holidaymakers, sailors, athletes and adventurers, so too is its reputation as an entertainment epicentre well established. But, as with any region that holds such a history, organised crime has made its presence felt here throughout the decades.

The story of the American mafia’s link with the casinos in pre-Castro Cuba is infamous and has been the subject of numerous retellings, including the Hollywood classic The Godfather II. But while this era may be the most famous, the years since have seen the sagas of the Sicilian Cuntrera-Caruana clan in Aruba and Venezuela, the Russian Mafia becoming a “ferociously corrupting influence” (according to Barry McCaffrey, President Clinton’s Director of the Office of National Drug Control Policy) in the region, and the growth of transnational narcotics trafficking. Casinos have always been ideal

meeting places for both legal and illegal profiteers. As venues that are usually open late at night, if not 24 hours a day, with plenty of cash on hand among visitors, and with alcohol free-flowing and games of risk encouraged, many casinos offer a solid customer base to dealers of all sorts. For those higher up the chain, the potential for the laundering of illicit profits can be huge.

And the reward for the risk of illegal activity in this field is set to only get bigger.

A Game Changer: The Rise of Online Gambling

The online gambling industry does not require the bricks and mortar of traditional casinos. Unlike physical institutions, which will always require employees working on the casino floor, online gambling sites can operate not only in the cloud, but also drastically minimise the reinvestment of their earnings into local economies.

In some respects, the shift to greater online gaming is unavoidable. Since the launch of the iPhone in 2007 and the iPad in 2010, ownership of hand-held devices has skyrocketed, alongside the growth of industries that cater for them. But while the evolution of technology is unstoppable, the capacity of online gambling outfits to

Research results can, of course, be contested and sometimes debunked. This is especially true when there can be so many variables within gambling, from one community to the next. But legalised gambling does offer one additional benefit: when it comes to the online arena, legalised gambling sites will always be more popular than illegal or unauthorised ones. This is not surprising given the strict regulations that surround a legal website, and the potentially grave security risks (not to mention the risk of criminal charges) that can come with using or operating an illegal website.

The growth of illegal gambling would cause an increase in the loss of revenue suffered by governments and authorised gambling businesses so, as the online component grows, legalised gambling may well become a candidate for reform of the most stringent rules. The longstanding ability of the gambling industry to be used for illicit activity, compounded by the rise of technology and use of methods like cryptocurrency to conceal profits and ill-gotten gains, means that all parties have an interest in seeing strong, modern reform in the sector. Doing so may be painful to some but beneficial to all. Failing to do so could mean that, before long, only criminals would hold a SBW winning hand.

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The EC dollar gets a facelift Continued from page 1

The new EC$50 features a portrait of former ECCB Governor Sir K Dwight Venner who set the record as the longest serving central bank governor in the world

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he Eastern Caribbean Central Bank (ECCB) aims to put its family of polymer dollars into circulation this summer, and hopes the move will reduce counterfeiting, lessen the environmental footprint and result in more durable and user-friendly cash.

From Australia to the Eastern Caribbean

The history of the polymer banknote is based on a need to combat crime and corruption.

In the late 1960s a successful counterfeiting ring poured hundreds of fake banknotes into circulation in Australia. Although the forgers were later caught, distrust of paper money lingered and the Bank of Australia launched a research project to create a new

type of note — one that would deter future counterfeiters.

The project took 20 years but was ultimately successful. The first polymer dollar was launched in 1988 and is now widely recognised as the most secure form of currency in the world. More than 20 countries have adopted the plastic-based notes including Canada, the United Kingdom, Nigeria, Chile and Trinidad and Tobago. There are now more than 30 different denominations of polymer notes and around 3 billion in current use, according to the Commonwealth Scientific and Industrial Research Organisation.

The ECCB is adopting a staggered rollout for its new notes with the EC$50 first to market in June. This will be followed by the EC$10, EC$20 and EC$100 in August and September. The final denomination, the EC$5,

The biggest reason for the switch to plastic is security. As technology advances and counterfeiting tools evolve to become ever more sophisticated, paper money is at risk will make its appearance in early 2020. The polymer dollars will be used alongside and interchangeably with the current paper notes.

Aside from the material, there are quite a few

changes to the design of the notes themselves.

While most banknotes are in landscape layout i.e. horizontal, the new currency is in portrait style, with the designs running vertically.

The new EC$50 features a portrait of former ECCB Governor Sir K Dwight Venner who set the record as the longest serving central bank governor in the world. Saint Lucia features on the new EC$100 which swaps out the old image of the ECCB building for one of the Pitons.

All of the polymer notes will carry a new feature to assist the blind and visually impaired. Each note will have a set of raised bumps in the corner that form a shape so they can be identified by touch. Every denomination has its own signature shape (a circle, a triangle, a rectangle) so people can know instantly what they are holding.

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(Pictured: Shermalon Kirby, ECCB Senior Director of Corporate Relations) The ECCB hopes that its new polymer notes will make counterfeiting a thing of the past

Paper vs plastic

The biggest reason for the switch to plastic is security. As technology advances and counterfeiting tools evolve to become ever more sophisticated, paper money is at risk.

And forgeries don’t even have to be that good; with money changing hands so frequently, often balled up and pushed into a pocket, even the most vigilant person can be fooled. In 2016, a rash of fake EC$50 bills hit the streets in Saint Lucia, identified by a common serial number and the fact that the ink ran when wet. The following year, Grenada had its own security scare when counterfeit EC$50 and EC$10 notes were discovered.

The ECCB is hoping that a holographic foil strip on the new EC$20, EC$50 and EC$100 notes will make these incidents a thing of the past. ECCB Senior Director in the Corporate Relations Department Shermalon Kirby says: “Counterfeiting in the Eastern Caribbean is not a big problem. Notwithstanding this, individuals do engage in such activity and a few counterfeit banknotes will penetrate the system, usually during carnival and Christmas. The public, through knowledge of the banknotes, is able to intercept in quick time. Due to the nature of polymer, it will be very difficult to counterfeit polymer banknotes. So we expect the few incidents of counterfeiting to be further minimised with the introduction of polymer banknotes.”

The polymer notes are not just safer, they are also stronger. So-called paper notes are actually a cotton-based paper composite, making them more flexible and durable than ordinary paper. But polymer is even more durable still. The polypropylene material is

fully waterproof as well as being resistant to dirt and difficult to tear.

“The upfront cost [of producing polymer notes] is much higher because polymer is more durable and the notes are expected to last three to five times longer than the paper notes, [therefore] cost savings will be realised over time,” says Kirby.

And because they last longer, polymer is actually more eco-friendly than paper. While plastic is generally considered a threat to the environment, polymer banknotes are the exception. When they reach the end of their lifespan, paper notes are shredded and sent to landfill. When the ECCB’s new polymer notes are destroyed, they will be shredded and sent to a recycling facility where the material can be reused and repurposed.

How will it affect EC citizens?

For the average citizen, ditching paper for plastic won’t be too disruptive. While polymer notes can be slippery and stick together, this improves as the notes become more worn. Direct heat will melt the notes so they shouldn’t be exposed to high temperatures.

Businesses may be wary but the notes will be used as normal alongside paper. They can be used in ATMs and other cash-handling devices as normal, according to Kirby who says: “There will be no need to change the machines. The ATMs, vending machines and kiosks just need to be recalibrated.

Businesses, mainly the commercial banks, credit unions, telecommunications and vending machine operators are preparing for the launch by getting their machines recalibrated to accept and dispense polymer banknotes. The ECCB will provide exemplar banknotes on loan to these businesses ahead of the launch to do the necessary calibration of their machines and kiosks.”

In addition, the bank is conducting education sessions with stakeholders from both the public and private sectors including financial institutions, government revenue collection agencies, fisher folk, farmers, taxi operators and chambers of commerce.

But the Eastern Caribbean won’t be saying goodbye to paper payments just yet.

The ECCB estimates that paper notes will continue to be in circulation for at least the next five years as the last stocks are depleted.

MARCH 16, 2019

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A New Chapter in the Venezuela and Guyana Esequiba Dispute Continued from page 2

Guyanese protestors last month. According to protestors, Venezuela has made it clear that it may not recognize any decision of the International Court of Justice (ICJ) in the Hague, Netherlands, with regards to its claim on a large part of Esequiba

Regional leadership and diplomacy For varying reasons, neither Caracas nor Georgetown may have an interest to progress beyond the current dynamic at the moment, but the evolution of broader circumstances demands it. This applies to all nations in the region, each having a shared stake and responsibility in seeing that territorial disputes are resolved amicably, especially in an era when great power politics has once again reared its head.

Recent years have seen leaders in Beijing, Moscow and elsewhere advance strategic territorial claims along their borders on the basis of ‘might makes right’.

In this instance, there’s a US factor to consider: Guyana enjoys support from Washington, and relations between Caracas and Washington — already long soured — have sunk further

under Trump. The shift in US position in November 2018, from supporting “the timely resolution of the Venezuela-Guyana border controversy” to now calling “on all parties to respect the 1899 arbitration decision”, may clarify publicly a position many suspected the Trump administration held privately, but risks being seen by Venezuelans as ‘kicking them while they’re down’.

It’s here that Guyana holds a special responsibility and selfinterest, given that the current crisis faced by Venezuela is increasingly permeating borders around the region.

The Personal Cost

A UN report in late 2018 highlighted that over 3 million Venezuelans have left the country in the last few years. This crisis has brought immense upheaval to the lives of the Venezuelan people and has placed considerable pressure on neighbouring

nations, in Guyana’s case, flaring tensions on its western border.

For years the Guyanese border town of Whitewater was regarded as so many border towns are: one that sees illegal activity, by virtue of its location, but does so with a certain stability.

Many Venezuelans, seeking to leave, would discreetly go east, and some Guyanese would cross west, in search of work in Venezuelan gold mines, but with much predictability surrounding the comings and goings.

This huge exodus of so many Venezuelans has changed this, and shone a light on the activities of sindicato gangs that have long terrorised miners and residents in the region, and found new ways for their criminal activity to thrive in this current crisis.

The episodes in and around Whitewater are illustrative of a critical truth: that this dispute cannot simply be regarded as an old historical disagreement or symbolic issue for bureaucrats in national capitals to bicker about.

It is instead one that continues to have a direct impact on the lives and wellbeing of citizens in both nations.

The next chapter in this story may not yet be clear, but clearly work now must begin on writing it.

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International Taxation

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EU to Add Bermuda, Aruba to Tax Haven List, Italy Against UAE Listing

By Reuters

According to EU documents, Aruba will be added to the new draft of the Brussels tax haven blacklist

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RUSSELS — European Union finance ministers are set to add the British overseas territory of Bermuda and the Dutch Caribbean island of Aruba to the bloc’s blacklist of tax havens, according to EU documents and officials.

The United Arab Emirates is also on the draft new list, but Italy and Estonia are opposing the listing of the emirates, a

document seen by Reuters shows.

The largest review of the list since its adoption in Dec. 2017 is expected to see the number of listed jurisdictions triple from the current five.

The Caribbean island of Barbados and the Arab Sultanate of Oman are also on the expanded draft list, EU documents show. Other jurisdictions in the Caribbean and the Pacific Ocean are set to complete the updated list.

The 28-nation EU set up the blacklist after revelations of widespread tax avoidance schemes used by corporations and wealthy individuals to lower their tax bills.

Blacklisted jurisdictions face reputational damage and stricter controls on their financial transactions with the EU, although no EU sanctions have yet been agreed by European states.

Britain had pushed other EU states not to include Bermuda on the list, but has lifted its objections after the European Commission argued that the island has “been playing games” to dodge EU requirements, according to minutes of a meeting of EU envoys on the matter.

Jurisdictions are added to the tax haven blacklist if they have shortfalls in their tax rules that could favour tax evasion in other states. They are removed from the blacklist if they commit to reforms by set deadlines.

Bermuda was required to change its tax rules by the end of February, but added new loopholes in revised legislation and did not provide a final text by the deadline, the Commission said according to the document.

UAE-ITALY

The draft list prepared by EU tax experts also includes the United Arab Emirates (UAE), a financial centre for the Middle

East, but Italy and Estonia are blocking its inclusion, the document shows. A final decision will be made by finance ministers at a meeting on Tuesday.

The Netherlands would veto the listing of its overseas territory of Aruba if the UAE was removed from the draft list, according to the document and two European officials.

Last week EU states blocked the adoption of another blacklist of countries that show deficiencies in countering money laundering and terrorism financing, after pressure from Saudi Arabia, the United States and Panama.

At a closed-door meeting on Friday, the Italian representative said the UAE should be given until the end of this year to change its rules and comply with EU tax standards, a document shows.

Italy said the UAE — a federation of emirates, which include the top financial hubs of Dubai and Abu Dhabi — had “constitutional constraints” that justified its delay in changing rules.

Most of over 60 jurisdictions monitored across the world by the EU were given one year, until the end of 2018, to comply with EU standards and avoid being blacklisted.

The EU blacklist originally comprised 17 jurisdictions, including the UAE, but shrank to five after most listed states committed to change their tax rules. The list currently comprises Samoa, Trinidad and Tobago, and three US territories: American Samoa, Guam, and the US Virgin Islands.

(Reporting by Francesco Guarascio; Editing by Catherine Evans)

The Saint Lucia Registry of Companies & Intellectual Property Company Incorporations Name: XUVO Limited Description: Entertainment Directors: Lamar Sifflet, Shameela Rambally Date Incorporated: 2/8/19 Chamber: Mary Juliana Charles Chambers Name: La Julitte Ltd. Description: Holding company Directors: Juliana Forbes Fearon Date Incorporated: 2/18/19 Chamber: Self-incorporated Name: St. Joseph’s Limited Description: Property holding Directors: Gerard Bergasse, Lily Bergasse, Danielle Bergasse Date Incorporated: 2/19/19 Chamber: Peter I. Foster & Associates Name: Rock Solid Resources Car Rentals Ltd. Description: Car rentals, hotel transfers, tours Directors: Stephanie Drysdale, Rawle Drysdale Date Incorporated: 2/25/19 Chamber: Thomas Eugene Name: G&L Enterprises Limited Description: Real Estate Services, General construction services

Directors: Gilbert Goolaman, Lelia Goolaman Date Incorporated: 2/27/19 Chamber: Self-incorporated Name: New Beginning Limited Description: Shipping and transporting of cargo Directors: Jason Prescott Date Incorporated: 2/28/19 Chamber: HC Reliable Legal Services Name: International Meat Shop Inc. Description: Supply of meats and poultry products Directors: Joseph Ballah Date Incorporated: 3/1/19 Chamber: Chong & Co. Name: Howelton Holdings Limited Description: Apartment rentals Directors: Claudette Mc Shane Date Incorporated: 3/4/19 Chamber: Paulette Francis Chambers Name: Tibbs Tech Solutions Inc. Description: Internet Café, Computer Repairs Directors: Jonathan Theobalds Date Incorporated: 3/5/19 Chamber: Self-incorporated

ENTERTAINMENT

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MARCH 16, 2019

Festival Fever

By Catherine Morris, STAR Businessweek Correspondent

Saint Lucia is a great place to soak up the sun and take a break from the daily grind, but it’s also a good place to party, as more and more tourists are discovering, thanks to a plethora of events and festivals designed to introduce visitors to all aspects of island life.

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he Caribbean Tourism Organisation (CTO) has declared 2019 the ‘Year of Festivals’, with CTO Secretary General Hugh Riley saying: “The common denominator for all Caribbean societies is a yearning to celebrate life; and each Caribbean country provides a beat that can’t be replicated elsewhere.”

The CTO is putting festivals at the forefront of its regional marketing campaign, hoping that destinations will capitalise on their unique selling points through events that engage both visitors and locals. A busy calendar full of events can help islands reach new, niche markets and create buzz on social media platforms. They also bring in visitors unfamiliar with the destination who, having enjoyed the party, can be enticed back for a longer break. And fetes are also a great way to sustain momentum year-round. Scheduling festivals through the traditional slow season of April-November, can bring a boost to flagging visitor numbers.

“Festivals bring more awareness of a destination,” says Nerdin St Rose, founder of event marketing firm Bornewell Holdings and creator of caribbeanevents.com. “They help during the slow periods, when there is a lull. You put in a festival to even out your arrivals.”

St Rose launched caribbeanevents. com in October last year as a “resource and a tool” for tourists wanting to discover what’s happening in the region throughout the year. The site features more than 200 events in a range of categories including art, business, diving, fashion and wellness. St Rose, a former VP of Sales and Marketing at the Saint Lucia Tourism Board, has extensive experience in the field, having helped launch festivals around the region including Saint Lucia’s Jazz Festival and Maskanoo in Turks & Caicos. She says the benefits of festivals are far-reaching as they give a boost to local communities and businesses.

“Festivals bring a sense of pride to a place. Who better to sell your destination than the locals and residents? Beyond economic value, they encourage community spirit,” she says. “The smaller vendors who may not necessarily be able to reach someone at a hotel have the opportunity to showcase their product. Saint Lucia has a lot to offer that is not necessarily put in the hands of visitors.”

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positions Saint Lucia as the mecca in the Caribbean for world-class entertainment, year-round,” said ECSL CEO Thomas Leonce. “This strategy has opened the way for numerous opportunities for our people, both from an economic and a creative standpoint.”

With over two decades’ experience in the industry, St Rose believes festivals have changed over the years, saying: “We are seeing transformation of festivals. A lot of it has to do with travel trends. Wellness is a big thing and we are seeing that more.

In the early 2000s, there were a lot of big music festivals but now people are not having those big events. It has morphed into smaller festivals throughout the year.

When you do multiple events, you give people a reason to return.”

Local tourists

Saint Lucia’s Roots & Soul Music Festival in 2018

As festivals become more diverse, so too do their audience. Saint Lucia’s thriving Food & Rum Festival is just as enjoyable for Caribbean citizens as it is for international visitors, proving that occasions like these have the potential to develop an often overlooked and underdeveloped market: intra-regional tourism.

Caribbeanevents.com recently teamed up with Caribbean airline LIAT to increase awareness of events in the region and boost intra-regional travel, with St Rose saying: “Some islands have not done well with inter-island travel but the opportunities are there. We want to see more travel to some of the lesser-known destinations.”

The universal appeal of events that showcase food, drink, music, art, history and heritage ensure that they will continue to draw crowds for the foreseeable future, with both locals and international visitors enjoying everything the region has to offer.

St Rose says: “A lot of people want to visit a destination and not just lie on the beach. They want to do something different.

Events create a camaraderie where it’s not just for visitors but also residents and locals as well. Tourists come and get to mingle with locals, which is what people are looking for now — those authentic and unique experiences. We need to develop that product and promote it. This is something that is ongoing and we have to keep going and reach greater heights.”

CTO Secretary General Hugh Riley

Diverse offerings

Announcing 2019’s festival theme, the CTO said it wanted to highlight each destination’s “unique rhythm and tempo”.

But, of course, there is more to festivals than just music. These types of events can celebrate all forms of Caribbean culture, from the region’s food to its art. They serve as a way to bring visitors together with the local community and give them the kind of insight into a destination that isn’t readily available within the boundaries of a resort.

This is something that the Saint Lucia

Hotel and Tourism Association (SLHTA) and its festival co-ordinator, Events Company of St. Lucia (ECSL), have long appreciated while working to build a jampacked schedule of diverse events. Earlier this month, ECSL unveiled its line-up for the summer festival season which boasts five key events with different themes: the St Lucia Jazz Festival in May, Carnival in June and July, Roots & Soul in August, Food & Rum Festival in September and the Arts & Heritage Festival in October.

“The Saint Lucia Summer Festival

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Festivals bring a sense of pride to a place. Who better to sell your destination than the locals and residents?

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MARCH 16, 2019

REGIONAL NEWS

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Jamaica’s New Microfinance Bill Seeks To End Predatory Payday Lending Practices

By Avia Collinder

T Jamaica’s Minister of Finance Dr Nigel Clarke

he microfinancing bill that will bring small lenders under the regulatory umbrella of the Bank of Jamaica has been tabled in Parliament by Minister of Finance Dr Nigel Clarke, who says it’s meant to bring order to the market and constrain the predatory lending practices employed by some.

The legislation covers microlenders that provide loans to individuals and small institutions whose sales range up to J$ 425mn.

The bill does not identify BOJ as the regulator — it speaks only of a ‘supervisor’ — but the central bank confirmed that it was the intended oversight authority.

In his statement accompanying the tabling of the bill, called the Micro Credit Act, Clarke said there has been a proliferation of microlenders since 2003, many of which “charge excessive interest rates and engage in predatory lending practices”.

Industry representatives were still reviewing the legislation this week to understand its full ramifications. Reactions were promised for later.

Microlenders, which are also referred to as payday lenders, are known to charge interest rates ranging from around 40 per cent upwards, but there are reports that some charge rates of up to 70 per cent and beyond.

The new bill proposes to rein in that practice by tagging microloan rates to the Government of Jamaica’s Treasury bill rates, taking into consideration “cost of funds, profit margins, borrowers’ credit risk, administrative costs and other loanrelated costs”. And the companies will have to seek a licence from the supervising authority to issue loans when the law and its regulations come into force.

Treasury bill rates are currently yielding below three per cent interest per annum, which offers a signal that the Government is looking for deep adjustments to the loan rates.

Those firms that lend without a licence will not be able to enforce their loan contracts with borrowers. And only registered companies with proper articles of incorporation, financial records, a board of directors, and office and branch locations can qualify for a licence.

The legislation is still to be debated in Parliament, which will determine the final contours of the proposals that are enacted into law.

The bill makes stipulations about information that must be reported by the microfinance companies to the supervising authority, including new physical locations, changes in the officer corps, and any acquisition of 10 per cent shareholding or more in the company, and thereafter, any subsequent increment of five per cent or more.

Breaches may be punished by a revocation or suspension of the company’s licence, fines ranging from J$ 50,000 to J$ 2mn, and prison

The new bill proposes to rein in that practice by tagging microloan rates to the Government of Jamaica’s Treasury bill rates, taking into consideration “cost of funds, profit margins, borrowers’ credit risk, administrative costs and other loan-related costs”

terms ranging from six months to one year, depending on the infraction. And depending on the offence, both fines and jail terms may apply.

Companies are required to do an annual audit to international accounting standards, done by a professional not employed by the company. The bill also gives the supervising authority the power to order its own audit.

As for the operations of the micro-lenders, they cannot lend in foreign currency without permission from the Bank of Jamaica, and the loan terms offered to borrowers must be stated in simple language and include the method of calculation of the rate of interest and penalties, in case of default. In a case of default, interest must be calculated on the outstanding amount owed and not the original principal sum.

Lending will only be permissible to individuals and MSMEs, including microenterprises which employ five or less and do no more than J$ 15mn of sales annually; small companies employing six to 20 persons with sales of J$ 25mn to J$ 50mn annually; and medium-sized companies which employ 25-50 persons with sales of J$ 75mn to J$ 425mn annually.

The proposed Micro Lending Act excludes building societies, friendly societies, cooperative societies and money-lenders that are not in the business of lending on a daily basis, from the new licensing requirements.

The bill also seeks to amend the Credit Reporting Act to designate the new licensees as credit information providers; to amend the Money Lending Act to exempt the licensees; and to amend the Proceeds of Crime Act, the Terrorism Prevention Act and the United Nations Security Council Resolution Implementation Act to designate the licensees as financial institutions.

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