July 23, 2010
PM: I don’t expect T&T to walk away

The Caribbean Community’s (CARICOM) spokesperson on the British American Insurance Company (BAICO) debacle is sending a message to the new Kamla Persad-Bissessar government in Trinidad and Tobago.{{more}}

“I do not expect the government of Trinidad and Tobago to walk away,” Dr. Ralph Gonsalves, Prime Minister of St. Vincent and the Grenadines (SVG) told reporters in Kingstown on Tuesday.

British American has been placed under judicial management and Organisation of Eastern Caribbean States (OECS) and other Caribbean governments are partnering with investors to form a new company to assume its liabilities.

Gonsalves, who was giving an update on efforts to form that new company, responded to the view that oil-rich Trinidad and Tobago “simply did backroom operations” for BAICO, which is headquartered in the Bahamas.

“The fact of the matter is this: It is clear that CL Financial took resources from British American and invested it in several places, including in Trinidad and Tobago,” said Gonsalves, who is also Minister of Finance here in SVG.

The Trinidad and Tobago based CL Financial is the parent company of BAICO and Gonsalves said the government of former Trinidad and Tobago Prime Minister Patrick Manning had recognized BAICO’s troubles as a regional problem.

Manning lost to a Persad-Bissessar headed coalition in elections in May this year.

Gonsalves said if the British American issue is not addressed as a “regional problem”, citizens of the region, the OECS and its currency union (Eastern Caribbean Currency Union – ECCU), “would ask, with all seriousness, whether or not membership of CARICOM makes sense.”

“Because you can’t be selling us your products from a particular country, having your financial institutions dominate these islands and then when the problem arises you walk away,” Gonsalves said.

“I do not expect the government of Trinidad and Tobago to walk away. But I want to put this matter in clear terms as to what is the perspective of the government of St. Vincent and the Grenadines and indeed the governments of the Eastern Caribbean Currency Union,” Gonsalves said.

Gonsalves is awaiting a meeting with the Minister of Finance in Port of Spain, Winston Dookeran, following a June 4 request.

“The Minister of Finance in Trinidad and Tobago has indicated to me that they are taking some time and I must be patient with then in this study of this complex matter,” Gonsalves said.

Gonsalves noted that the Manning administration had agreed to contribute US$100 million (EC$270 million), in addition to the US$50 million (EC$135 million) it has given from the Petroleum Facility to aid in the US$400 million (EC$1.08 billion) capitalization of the new company.

The government of SVG has allocated US$75 million, its share, to the capitalization of the proposed company.

An ECCU update on the operation of BAICO and CLICO in the Eastern Caribbean said over the past seven months, governments and the Judicial Managers have achieved the transfer of the BAICO Property Portfolio.

The Judicial Managers have received the recognition of the United States, where some of BAICO’s assets are lodged.

The ECCU update said the launch of the Medical Insurance Support Fund was imminent, even as the company identified and continued negotiation with strategic investors.

The statement also spoke of the ongoing discussions with the Government of Trinidad and Tobago, including engagement with the new administration.

Gonsalves last week said that while Trinidad and Tobago, according to Prime Minister Persad-Bissessar, was not the Caribbean’s automated teller machine (ATM) card, it must still make its to contributing to the CARICOM Development Fund (CDF).

He said contribution to the CDF was a Revised Treaty of Chaguaramas obligation, and while Port of Spain had set up and finances the CARICOM Petroleum Facility, the former Patrick Manning administration “decided to put it within the CARICOM context”, subjecting it to “CARICOM rules”. (KXC)