The fall out continues

In last week’s issue of the Searchlight newspaper the editorial captioned “Responding to the Crisis” looked at the disquiet caused by the Global economic crisis which had begun to manifest itself in the region through the difficulties being experienced by CLICO. The point was made that there were still concerns despite the efforts being made to calm ‘frayed nerves’. Reference was made obviously to the intervention by the Trinidad and Tobago government through the Central Bank of that country. The editorial then posed some critical questions – “Who else or who next?{{more}} Are we sufficiently insulated from even greater harm?” These reflected the thinking of many persons who felt that we had not heard the last of the CLICO story and who feared that others might follow.

It was only a matter of days after that the news rocked the Caribbean that the flamboyant Texan billionaire Sir Allen Stanford, three of his companies and two executive members of those companies were charged for involvement in a US$8 billion investment fraud. In fact an official of the US Securities and Exchange Commission was quoted as saying that “We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world”. The timing of these charges was extremely bad for Antigua. Stanford has massive involvement in that country and his enterprises there must account for a large share of the GDP of that country and would most naturally be employing a sizeable labour force there. News had seeped out for some time about investigations into the affairs of the Stanford Group of Companies but this intensified recently forcing the Antiguan Prime Minister to express his concerns about the possible fallout from any investigation into the affairs of the Stanford businesses. (The Stanford story is of course not independent of the climate that is surrounding the global economic crisis)

But that was not all. Antigua has still not gotten over the negative publicity that came with the murder of the two tourists there last year; then there was the cricket fiasco that led to the cancellation of the second test match. This was followed by the news of election violence in that country and in the midst of all of this, the announcement of the date for general elections. So it is not an easy time for Antigua and it has come at a time when the country will inevitably be divided, something we associate with general elections especially in a country like Antigua where bitter political rivalry has existed for some time.

The implications even go beyond this. Stanford had been heavily involved in West Indies Cricket. It is amazing how things could take unexpected turns. So far what we have had are charges over allegations. The story still has to play itself out, but one suspects that regardless of how it ends things will never be the same for Sir Allen again, the man whom some saw as a possible saviour for West Indies Cricket. He was recently the toast of Antigua and the Caribbean over his Twenty -Twenty Super Series Cricket Competition, with the first match between the English team and the Stanford Superstars being played in Antigua ending in victory for the Caribbean ‘boys’. Everyone wanted to be seen next to Sir Allen and to share in his glory. I am sure that many of those who had recently been seeking his company will by now be keeping their distance. Even the West Indies and English and Wales Cricket Board have announced the suspension of their negotiations with Stanford, as one naturally expected them to under the circumstances.

The Antiguan Prime Minister has urged the Antiguan people not to panic over the operations of the Stanford Antiguan businesses, assuring them that the Eastern Caribbean Central Bank has been working with them to put a contingency plan in place. With the news of the charges laid against Stanford and three of his companies, particularly the Antiguan-based Stanford International Bank, it was reported that a number of clients lined up outside the two branches of the Bank in Antigua. It is still too early to know what the fallout is likely to be. Again the Searchlight needs to repeat its questions “Who else or Who next?” I say this because already we have begun to see fingers pointing at off-shore banks in the Caribbean that have been involved in similar dealings over their Certificate of Deposits (CD) schemes.

There is really no getting away from it; an economic crisis in the north must impact on our vulnerable economies, with our dependence on tourism, agricultural exports and financial services. To what extent can we be insulated? It is good to see the ECCB stepping into the picture very early but the Eastern Caribbean is no Trinidad and Tobago. Crises like these also demand unity among our peoples and of course this is mostly lacking. We really have to hope for the best but it takes more than hope.

Dr Adrian Fraser is a social commentator and historian.