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REGIONAL
Trinidad and Tobago
Cudjoe says expect bumper cruise season in 2018 Renewed efforts by the Ministry of Tourism to showcase T&T as an ideal travel destination is already reaping success as the 2017/2018 cruise season promises to be a bumper one with 71 calls scheduled to put into port.
Scotiabank appoints new managing director Scotiabank has announced the appointment of Stephen Bagnarol as Managing Director of its operations in T&T, as well as Senior Vice-President and Head of the bank's Caribbean South and East operations.
Unilever declines $4.07 Overall Market activity resulted from trading in 16 securities of which 2 advanced, 5 declined and 9 traded firm.
Jamaica
FHC, Oppenheimer facilitate access to global capital markets The Kingston-based FHC Investments Limited (FHCIL), a subsidiary of First Heritage Credit Union, has entered a partnership with New York-based Oppenheimer Asset Management Inc. which provides a range of services to banks and high net worth individuals.
PCJ exploring offshore wind farm Petroleum Corporation of Jamaica (PCJ) has got foreign backing for a prefeasibility study on the prospect of setting up another wind farm, but one that would be anchored out at sea.
Barbados
IMF u-turn on economy Government’s most recent austerity measures have prompted the International Monetary Fund (IMF) to reverse its growth projections for the Barbados economy.
Barbados cont’d.
Carnival cruise liner drops out Hundreds of Barbadians booked to cruise on the Carnival Fascination for the next three months have had their plans smashed.
Tourism arrivals, bookings up with US market key Barbados’ tourism officials are reporting a promising tourism performance for the first eight months of this year.
The Bahamas
Gov't Not Targeting IMF's $70m Slash The Government is not targeting the IMF's recommended $70 million wage bill slash, the Deputy Prime Minister said yesterday, but it must right the Bahamas' "upside down" economy.
BDB Chair: 'Days of $50k Hand-Outs Over' The Bahamas Development Bank's (BDB) chairman yesterday pledged to tighten lending protocols, adding: "The days of giving someone $50,000 and saying: 'Go get it done' are gone".
BDB: 'Everything Turns' on $64m Debt Restructure The Bahamas Development Bank's (BDB) chances of meeting the Government's three-year 'self-sufficiency' target depend entirely on its ability to restructure $64 million in long-term debt.
Central Bank Back in Compliance on Gov't Debt Limits The Central Bank yesterday said its government debt holdings are back in compliance with its governing Act, with medium and long-term maturities equal to 12.52 per cent of its demand liabilities.
Baha Mar Launches Hospitality Academy Baha Mar has launched its Hospitality Academy in a bid to equip Bahamians with the necessary skills and expertise for a career in the resort and tourism industries.
BPL Develops Bahamian management Strategy Bahamas Power and Light's (BPL) Board has developed a plan that will place the monopoly electricity provider back under Bahamian management, its chairwoman revealed yesterday.
Guyana
GuySuCo to slash workforce by 7,000 Cash-strapped Guyana Sugar Corporation (GuySuCo) is already letting go of staffers from two estates that it will close before the year is out. Amidst worry by sugar workers, GuySuCo officials yesterday confirmed that 1,500 could be let go from Rose Hall and the East Demerara estates by the end of the crop. The industry has 17,000 workers. It wants to reduce that by at least 5,500 more, a total of 7,000 – to finish at 10,000.
Antigua & Barbuda
New agreement to access development assistance Prime Minister Gaston Browne has signed the Agreement for Encouragement and Protection of Investment with the Director General of OPEC Fund for International Development (OFID), Suleiman Jasir Al- Herbish.
Hello new Barbuda A Chinese firm has shown interest in establishing a new town on Barbuda, the government has announced.
Cost of citizenship cut in half – Visa-free loss coming back to haunt? The loss of visa-free access to Canada continues to haunt Antigua and Barbuda, according to the Citizenship by Investment Unit (CIU). This is what eventually led to the need to slash the cost of citizenship by half.
St. Lucia
Increase in tourist arrivals and accommodation expansion – Saint Lucia growing from strength to strength in 2017 Saint Lucia has recorded strong and steady growth in its tourism sector, so far for 2017.
Saint Lucia receives almost US$3 million from CDB’s poverty reduction programme BNTF 9 The BNTF Programme, CDB’s flagship programme for poverty reduction, has contributed significantly to national development in St. Lucia since it commenced operations on the island in 1979.
St. Kitts and Nevis
More Cruise Ships are coming to St. Kitts While the passing of Hurricane Irma and Maria respectively did not have serious negative impact on St. Kitts, the devastation to major ports of call in the Northern Leeward Islands has impacted itineraries for cruise calls to St. Kitts since September 7.
British Virgin Islands
BVI seeks loans, investors after some $3.3B damage While noting that damage to the territory as a result of recent natural disasters is estimated at some $3.3 billion across all sectors, Premier Dr D Orlando Smith said his administration will use an appropriate mix of financing including grants and affordable borrowing to fund reconstruction.
No import duties on vehicles, food, clothing Food, clothing, vehicles and other non-luxury items have been added to the list of goods on which Government is waiving customs duties, Premier and Minister of Finance Dr D Orlando Smith announced yesterday, October 12.
Haiti
Haiti seeks funding with its partners On Thursday, a delegation of the Government of Haiti (GdH) led by Jude Alix Patrick Salomon, Minister of Economy, accompanied by Aviol Fleurant, Minister of Planning and Jean Baden Dubois Governor of the Central Bank held discussions with leaders of multilateral and bilateral institutions (henceforth development partners) involved in development efforts in Haiti. The meeting was convened by the International Monetary Fund (IMF) as a follow-up to conversations between the the President of Haiti Jovenel Moïse and Christine Lagarde, Managing Director of the IMF, in the margin of the recent United Nations General Assembly in New York.
INTERNATIONAL
United States
White House pitches corporate tax cut as win for workers The Trump administration said in an analysis released on Monday that middle-class Americans would see incomes eventually rise more than $4,000 if President Donald Trump’s corporate tax cuts were enacted, seeking to counter Democratic criticisms that its tax proposals overwhelmingly benefit the rich.
Fed's Yellen says watching inflation closely but economy is strong The U.S economy remains strong and the strength of the labor market calls for continued gradual increases in interest rates despite subdued inflation, Federal Reserve Chair Janet Yellen said on Sunday.
United Kingdom
Sterling strengthens as investors bet on data boost The pound edged up on Monday, as investors bet that economic data this week would put the Bank of England on track for a rate rise by the end of the year and - at least for the time being - overshadow Brexit.
Europe
Stronger currency shrinks euro zone trade surplus in August Euro zone’s trade surplus shrank in August as the stronger euro fueled an import boom that was only partly offset by a rise in exports, official estimates released on Monday showed.
Euro falters after biggest weekly rise in month as ECB eyed The euro edged lower on Monday after posting its biggest weekly loss in a month though prices clung to well-worn trading ranges before a central bank meeting next week where policymakers are set to unveil a plan to roll back its record stimulus policies.
China
China data boosts world stocks and commodities, oil jumps World stocks and commodities rose on Monday, boosted by upbeat Chinese data, while U.S. oil futures jumped to a near six-month high as an escalation in fighting between the Iraqi government and Kurdish forces threatened supply.
China new yuan loans rise more than expected in September Chinese banks extended more loans than expected in September, buoyed by demand from home buyers and companies, even as the government tightened the screws to wean the economy off its years-long addiction to cheap debt.
China central bank chief surprises with gravity-defying 7 percent second- half growth forecast China’s central bank governor said the economy could grow 7 percent in the second half of this year, accelerating from the first six months and defying widespread expectations for a slowdown.
Japan
Nikkei rises for 10 straight days as dollar-yen stable; large caps gain Japan’s Nikkei share average rose to a fresh 21-year high on Monday as the dollar stayed steady against the yen, while index-heavyweight SoftBank surged on news that T-Mobile and Sprint plan to merge.
Global
Oil rises as fighting escalates in Iraq's oil-rich Kirkuk Oil markets jumped on Monday as Iraqi forces entered the oil city of Kirkuk, taking territory from Kurdish fighters and raising concerns over exports from OPEC’s second-largest producer.
Asia oil buyers turn to U.S. in hunt for cheap supply Asia is set to ramp up crude oil imports from the United States in late 2017 and early next year, with buyers searching out cheap supplies after hurricanes hit U.S. demand for the commodity at a time of rising production in the country.
Global cont’d.
As the quartet breaks up, central banking leadership flux looms The leaders of the world’s top central banks who risked trillions of dollars and their reputations to rescue the global economy are now set to walk off stage at a time when the lingering effects of the crisis, evolving technology and a combustible political landscape will challenge their successors.
Oil rises as fighting escalates in Iraq's oil-rich Kirkuk Monday 16th October, 2017 – Reuters
Oil markets jumped on Monday as Iraqi forces entered the oil city of Kirkuk, taking territory from Kurdish fighters and raising concerns over exports from OPEC’s second-largest producer.
Iraq launched the operation in the multi-ethnic region on Sunday as the crisis between Baghdad and the Kurdish Regional Government (KRG) escalated. Tensions have been building since the KRG voted for independence in a Sept. 25 referendum.
Brent crude futures LCOc1 were at $58.10 per barrel at 1053 GMT, up 93 cents from the previous close. U.S. WTI crude was at $52.14 per barrel, up 69 cents.
“The escalation in Northern Iraq is the main driver,” Commerzbank analyst Carsten Fritsch told the Reuters Global Oil Forum. “Oil supply from this region is at risk.”
The government said its troops had seized Kirkuk airport and taken control of Iraq’s North Oil Company. While an Iraqi oil ministry official said oil and gas production in Kirkuk was “proceeding normally”, and that Kurdish leaders had agreed to avoid fighting in oil and gas facilities, the action unsettled the market.
Kirkuk accounts for 200,000 barrels per day (bpd) of the some 600,000 bpd of oil produced in the KRG region, and Turkey has threatened to shut a KRG-operated pipeline that goes to the Turkish port of Ceyhan at Baghdad’s request.
Renewed worries over U.S. sanctions against Iran also drew attention in the market.
U.S. President Donald Trump on Friday refused to certify that Tehran is complying with the accord even though international inspectors say it is.
Under U.S. law, the president must certify every 90 days that Iran is complying with the deal. Congress now has 60 days to decide whether to re-impose economic sanctions on Tehran.
During the previous round of sanctions, roughly 1 million bpd of Iranian oil was cut off. Analysts said that while renewed sanctions were unlikely to curtail that level of exports again, they warned that such a move would be disruptive.
U.S. OIL RIG EXPLOSION
Cuts to U.S. drilling rigs, and an explosion overnight at an oil rig in Louisiana’s Lake Pontchartrain, also boosted prices.
Drillers cut five oil rigs in the week to Oct. 13, bringing the total count to 743, the lowest since early June, Baker Hughes (GE.N) energy services firm said late on Friday.
Oil consumption has also been strong, especially in China, where the central bank governor said on Monday that the economy is expected to grow by 7 percent in the second half of this year, defying widespread expectations for a slowdown.
(Additional reporting by Henning Gloystein in Singapore; editing by Jason Neely)
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Stronger currency shrinks euro zone trade surplus in August Monday 16th October, 2017 – Reuters
Euro zone’s trade surplus shrank in August as the stronger euro fueled an import boom that was only partly offset by a rise in exports, official estimates released on Monday showed.
Although the euro has depreciated against the dollar from a 2017 peak in early September, it is still up more than 12 percent this year. Cheaper imports have complicated European Central Bank’s plans to raise inflation in the euro zone.
The European statistics office Eurostat said the 19-country currency bloc’s surplus in goods trade dropped to 16.1 billion euros ($18.9 billion) in August from 23.2 billion in July. It was also lower than in August 2016 when it stood at 17.5 billion euros.
The lower surplus was caused by a surge in imports from countries outside the euro zone, which grew 8.6 percent on the year, according to seasonally unadjusted data.
This rise outstripped the 6.8 percent increase in exports, resulting in a smaller surplus for the euro zone. The August surplus was the lowest recorded this year, excluding a temporary deficit in January.
The strong euro, which peaked at nearly 1.20 dollars in August, contributed to the reduced surplus, as it made imports cheaper.
This in turn capped inflation, making it harder for the ECB to tighten monetary policy.
Inflation in the euro zone was 1.5 percent in September, according to Eurostat preliminary estimates, the same rate as in August and below the ECB target of a rate close to 2 percent.
The ECB is expected to extend its stimulus program for nine months at its next meeting on Oct. 26 while scaling back the monthly purchases, sources said.
(Reporting by Francesco Guarascio; editing by Philip Blenkinsop)
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White House pitches corporate tax cut as win for workers Monday 16th October, 2017 – Reuters
The Trump administration said in an analysis released on Monday that middle-class Americans would see incomes eventually rise more than $4,000 if President Donald Trump’s corporate tax cuts were enacted, seeking to counter Democratic criticisms that its tax proposals overwhelmingly benefit the rich.
The White House and top Republicans in Congress have released a framework for tax reform that lacks details but is intended to serve as a guidepost for congressional committees that are crafting tax legislation.
Trump has said he would like to see the U.S. corporate income tax rate reduced to 20 percent from the current 35 percent rate.
An analysis by the White House Council of Economic Advisers said lower corporate taxes would incentivize companies to invest in new machines that would require more skilled workers. Companies would then pay higher wages to these skilled workers.
Kevin Hassett, Chairman of the CEA, told reporters in a conference call that those benefits would take five years to fully “phase in.”
Hassett also said lower corporate rates would give companies incentives to build plants in the United States, rather than overseas.
According to the analysis, middle-class earners would see incomes rise $4,000. Under Hassett’s explanation of the timing, the full increase would be realized in five years.
Fiscal policy analysts the Tax Policy Center, a non-partisan research organization, said the overall benefits of lower corporate taxes tilt heavily toward those with higher incomes.
The Tax Policy Center said middle-income taxpayers would receive less than 10 percent of the benefit of a corporate rate cut while the top 20 percent would receive about 70 percent. The top 1 percent would see about one-third of the benefits and the top 0.1 percent would get about one-fifth, the TPC has said.
Democratic lawmakers have lambasted the Trump tax plan’s intended tax relief for corporations and small businesses as a giveaway for the wealthy.
Delivering the Democrats’ weekly policy address on Saturday, Senator Bernie Sanders, a former 2016 presidential candidate, said Trump’s budget and tax proposals were “the most destructive and unfair” in U.S. modern history.
“Donald Trump and Republicans in Congress claim that their tax plan would benefit the middle class. Nothing could be further from the truth,” Sanders said.
(Reporting by Mike Stone in Washington, DC; Editing by Cynthia Osterman)
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Sterling strengthens as investors bet on data boost Monday 16th October, 2017 – Reuters
The pound edged up on Monday, as investors bet that economic data this week would put the Bank of England on track for a rate rise by the end of the year and - at least for the time being - overshadow Brexit.
Sterling recorded its best week in four against the dollar in volatile trade last week, with the currency subject to big price swings on apparently conflicting reports on the negotiations on Britain’s departure from the EU.
On Friday, the pound dropped almost half a cent against the dollar in less than a minute after a German government spokesperson said time was running out for a deal, before recovering after British Prime Minister Theresa May said she could have more to say on a financial settlement between London and Brussels at this week’s EU summit.
Trading appeared calmer on Monday, with the pound up 0.1 percent at $1.3296 by 0830 GMT, staying in a trading range of $1.3270 to $1.3310. It hit a 12-day high of 88.57 pence against a broadly weaker euro.
Société Générale Macro Strategist Kit Juckes said this was “not a good week to short the pound”, given several data releases that could paint an upbeat picture of the UK economy, and because BoE Governor Mark Carney was likely to strike a hawkish tone when appearing in front of the Treasury Select Committee on Tuesday.
“I think we will react more to ‘good’ UK data than ‘bad’,” he said.
Data on Friday showed speculators slightly trimmed their long positions on the pound - bets that it would rise - in the week up to last Tuesday. But they were still net-long on the currency for a third week running, having been short for almost two years.
That turnaround in positioning has been driven largely by a repricing of Bank of England interest rate expectations, after the BoE last month hinted rates could rise as soon as November.
Inflation data due on Tuesday is expected to show consumer price growth hitting a five-year high of 2.8 percent year-on-year, which would firm up expectations of a near-term hike. Labour market data due on Wednesday will also be closely watched, as will retail sales numbers on Thursday.
May travels to Brussels on Monday for talks with European Commission chief Jean-Claude Juncker, after a deadlock in Brexit talks appeared to dash British hopes that a summit later in the week could launch negotiations on future trade ties.
MUFG currency economist Lee Hardman said market expectations of progress at the summit were low.
“The balance of risks for the pound could be more titled to the upside ahead of the summit,” he said. “Downside risks for the pound would increase if ‘sufficient progress’ (on negotiations) has still not been made by the end of this year.”
(Editing by John Stonestreet)
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Fed's Yellen says watching inflation closely but economy is strong Sunday 15th October, 2017 – Reuters
The U.S economy remains strong and the strength of the labor market calls for continued gradual increases in interest rates despite subdued inflation, Federal Reserve Chair Janet Yellen said on Sunday.
“We will be paying close attention to the inflation data in the months ahead,” Yellen said in prepared remarks at an international banking seminar in Washington. “My best guess is that these soft readings will not persist.”
Yellen also said she expected the U.S. economy to exceed its long-term trend during the second half of the year and repeated the impact of recent hurricanes on the economy should be temporary.
The U.S. central bank voted to hold interest rates steady at its last policy meeting in September. Since then, Yellen has repeatedly acknowledged rising uncertainty on the path of inflation, which has been retreating from the Fed’s 2 percent target rate for much of the year.
Minutes from the meeting, released last Wednesday, showed policymakers had a broad debate about recent soft inflation and the impact on interest rates if it fails to rebound.
However, Yellen and some other key policymakers have also made plain they expect to continue to gradually raise interest rates given the strength of the overall economy and continued tightening of the labor market.
Fed officials largely shrugged off a weak jobs report for September and pinned the decline in employment on Hurricanes Harvey and Irma temporarily displacing workers.
In her speech, Yellen said the most recent wage gains contained in the September jobs report were encouraging and that she expected the central bank to raise interest rates further.
“We continue to expect that the ongoing strength of the recovery will warrant gradual increases in that rate to sustain a healthy labor market and stabilize inflation around our 2 percent longer-run objective.”
The central bank has raised interest rates four times in its tightening cycle which began in late 2015. The Fed currently predicts one more rate rise this year and three the next.
The Fed has two more scheduled meetings this year, in November and December. Investors currently see the Fed raising interest rates in December.
(Reporting by Lindsay Dunsmuir; Editing by Mark Potter)
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Asia oil buyers turn to U.S. in hunt for cheap supply Monday 16th October, 2017 – Reuters
Asia is set to ramp up crude oil imports from the United States in late 2017 and early next year, with buyers searching out cheap supplies after hurricanes hit U.S. demand for the commodity at a time of rising production in the country.
As many as 11 tankers, partly or fully laden with U.S. crude, are due to arrive in Asia in November, with another 12 to load oil in the United States later in October and November before sailing for Asia, according to shipping sources and data on Thomson Reuters Eikon.
U.S. West Texas Intermediate crude benchmark stands at its largest discount in years against the Atlantic Basin’s Brent, with local appetite curbed as U.S. refineries are still pushing to get back on track in the wake of hurricanes such as Harvey.
“Between November and January, there is a very big volume of U.S. crude heading to Asia,” said a Chinese trader who has bought 4 million barrels of medium-sour U.S. oil to arrive in December. He declined to be identified as he was not authorized to speak with media.
The price-spread between the two crudes had already pushed U.S. crude exports to a record 1.98 million barrels per day by late September, according to the Energy Information Administration in the United States.
Exports in the next two to three weeks could hit 2.2 million bpd, Marco Dunand, Chief Executive of Trading House Mercuria, said last week.
That has also been driven as some Asian governments look to diversify supply sources and reduce trade surpluses with the world’s top economy. India joined China, Japan and South Korea when it imported its first U.S. crude in October.
And high premiums for Middle Eastern grades of crude are also stoking Asian appetite for U.S. supplies.
“U.S. medium sour grades can replace most Middle East grades and the light sweets may replace some African crude,” said the Chinese trader.
DESTINATION ASIA
The tankers to arrive in Asia in November include eight Very Large Crude Carriers (VLCC), capable of carrying 2 million barrels of oil each, and three Suezmaxes that can load half that volume, according to shipping data in Eikon.
China remains the largest buyer with four tankers, followed by three to South Korea and two to India. The remaining two could head to Singapore, the data shows.
Unipec, the trading arm of Asia’s largest refiner Sinopec, dominates the trade with imports set to hit 5.7 million tonnes in 2017, up from 3.6 million tonnes in the first eight months, a source familiar with the matter said. The company buys about 8 million barrels of U.S. crude on average per month, the source said. Reuters could not immediately reach the company for comment.
Another 12 tankers are provisionally chartered to load U.S. oil in October and November, the data showed.
Four of these are super-tankers chartered by South Korean buyers to load Mexican and U.S. crude. The country’s top refiner SK Energy [SKENGG.UL] has bought 6.5 million barrels of U.S. crude to be delivered between November and January.
Several Indian refiners have also purchased their first U.S. crude for delivery in the fourth quarter, including the country’s largest refiner Indian Oil Corp.
Japan’s largest refiner JXTG Holdings has provisionally chartered a VLCC to load crude in Mexico and the U.S. Gulf in November. The company declined to comment on individual trades.
(Reporting by Florence Tan in Singapore and Catherine Ngai in New York; Additional reporting by Jane Chung in Seoul and Osamu Tsukimori in Tokyo; Editing by Joseph Radford)
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As the quartet breaks up, central banking leadership flux looms Monday 16th October, 2017 – Reuters
The leaders of the world’s top central banks who risked trillions of dollars and their reputations to rescue the global economy are now set to walk off stage at a time when the lingering effects of the crisis, evolving technology and a combustible political landscape will challenge their successors.
The Federal Reserve, the Bank of Japan and the People’s Bank of China may all have new bosses in early 2018 and there will be a new head of the European Central Bank the following year.
The new leaders will have to deal with the hangover from the 2007-2009 crisis and its immediate aftermath as well as newly emerging risks.
Some $10 trillion in assets bought by the Fed, the ECB and the BOJ to prop up their economies remains on the books and will have to be pared back. Stubbornly low global inflation and weak growth complicate the return to more conventional policies. There are unfinished reforms in China and Europe, while the rise of nationalism could erode central bank independence.
Further ahead, the spread of cryptocurrencies and other technologies threatens to weaken central bank control over the financial system.
“The bad news is that in a crisis people learn by doing,” said Vincent Reinhart, chief economist at investment firm Standish Mellon and a long- time official at the Federal Reserve. “Will the next set of people have the set of experiences that allows them to do that? Will they have a test?”
The changing of the guard could veer in unpredictable directions. China’s president is considering a provincial official to succeed Zhou Xiaochuan, a veteran policymaker who has led the central bank since 2002 and whom analysts regard as a champion of reforms that could falter without his leadership.
In the United States, President Donald Trump will have the opportunity to infuse his “America First” sensibility at the Fed, an institution with an undeniable global role, when Chair Janet Yellen’s term ends in early February.
BOJ Governor Haruhiko Kuroda’s shock-and-awe record monetary stimulus gets credited for helping Japan snap out of years of stagnation. He will see his term end next April with the economy expected to keep growing, but inflation still far from his target, fueling doubts about the overall effectiveness of his policy.
ECB President Mario Draghi will be around until late 2019, but the succession battle could renew tensions over Britain’s departure from the European Union, ways of aligning the interests of economic superpower Germany with the rest of Europe, and concerns that the rise of nationalism could impair the ECB’s ability to set monetary policy for 19 countries.
“Given the divisions in Europe both politically and economically, you could have a very large swing in ECB behavior,” said Adam Posen, President of the Peterson Institute for International Economics.
Yellen, Kuroda and Zhou appeared together on Sunday to talk about the global economy on the sidelines of the International Monetary Fund and World Bank annual meetings.
It was a “farewell concert” of sorts for a group whose tenure has transformed central banking.
With rare exceptions, monetary policymakers from different countries avoid any hint of direct coordination with each other, and primarily tailor policies to domestic needs. Still, the four in charge now have shared years at the helm of the global financial system, met and talked at countless international meetings, and managed a major crisis together.
Along the way they deployed open-ended central bank asset purchases, introduced negative interest rates, salvaged the euro zone from a possible fracture, and steered China, now the world’s second largest economy, toward more openness and currency reforms. Yellen, a top Fed official since 2004, both helped craft the crisis response and steered the Fed’s to a more conventional policy.
NEW SCORE FOR A NEW BAND
Some continuity is possible. Yellen and particularly Kuroda could be reappointed when their terms expire next spring, and one of the top candidates to run the PBOC is cut from the same reformist mold as Zhou, who is expected to retire in the first half of 2018.
“I am not sure that all three will actually leave,” Jeroen Dijsselbloem, the Chairman of Euro Zone Finance Ministers, who will himself leave his post in January, told Reuters.
“In general, losing experience is always a risk. But it is also a fact of life.”
But the odds now seem that by early next year the world’s two largest economies will have new and potentially more inward looking, central bank leadership.
Zhou’s successor will face an immediate choice of how aggressively to continue the policy transition toward market-based norms, and how to resolve a suspected mountain of bad debt on provincial and corporate books.
In the United States, some of the candidates being considered to replace Yellen are at odds with her on interest rates, inflation, and how to fight severe downturns.
Bank of Japan Board Member Sayuri Shirai said the Fed’s smooth transition from the era of near zero rates and bond buying to one of steadily tighter monetary policy was a testament to Yellen’s steady hand and good communication.
The calm “is attributable to the Fed’s improved communications skills with markets under Yellen’s leadership,” she said.
Reinhart said that in a sense major central banks are already in a transition as the current leaders tackle issues in a way that could help make the handoff smooth.
Whoever Trump names to run the Fed, for example, will have a clear “gradual” interest rate path and a balance sheet reduction plan to rely on, at least at first. Draghi is also expected to reduce the ECB’s bond buying and take the initial steps toward more conventional monetary policy over the remainder of his term.
Zhou set the stage for the renminbi’s broader use as a global currency whose value is determined by market forces, sparing his successor the internal and international tensions over China’s managed exchange rate.
It will be up to the newcomers, though, to be vigilant about new problems. Financial regulation is still evolving, and few governments appear willing to tackle high debts and rising entitlement spending, or have successfully confronted the changing nature of work and wages.
Posen warned that with inflation and interest rates still very low, governments hamstrung, and financial connections between nations “very dense and complicated,” incoming policymakers won’t have a tried and tested playbook.
“We don’t yet have the right set of tools and ideas to tackle that.”
(Reporting by Howard Schneider and Leika Kihara; Additional reporting by Gernot Heller, Balazs Koranyi and Jan Strupczewski; Editing by David Chance and Tomasz Janowski)
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China data boosts world stocks and commodities, oil jumps Monday 16th October, 2017 – Reuters
World stocks and commodities rose on Monday, boosted by upbeat Chinese data, while U.S. oil futures jumped to a near six-month high as an escalation in fighting between the Iraqi government and Kurdish forces threatened supply.
Asian shares rallied to a decade high after figures showed China’s producer prices beat market expectations to rise 6.9 percent in September from a year earlier.
Copper hit three-year highs. Prices of iron ore and coke, key ingredients in steel-making, jumped with Dalian iron ore futures, [DCIOcv1] rising 2.5 percent to a 2-1/2 week high while coke for January delivery [DCJcv1] gained 1.6 percent.
Oil prices also jumped, pushed up as Iraqi forces entered the oil city of Kirkuk, taking territory from Kurdish fighters.
U.S. crude CLc1 rose 1.3 percent to $52.12 a barrel, not far from $52.85 touched late last month - a level not seen since April. Brent crude LCOc1 climbed 1.5 percent to $58.03 per barrel.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained for a fifth day running to its highest level since late 2007.
Japan's Nikkei .N225 climbed for a sixth day to a level not seen since November 1996. Australian shares extended their winning streak to a fourth straight session to rise 0.6 percent, while South Korea's stock index .KS11 set a new record. Wall Street was set to open higher.
Upbeat data from China came before the Communist Party Congress on Wednesday and third-quarter economic data on Thursday. Figures showed China’s producer prices beat market expectations to rise 6.9 percent in September from a year earlier.
“What has helped risk appetite this morning is that the Chinese inflation data suggests the world’s second biggest economy is doing much better than people expected this time a year ago for 2017,” said Michael Hewson, Chief Markets Analyst at CMC Markets.
“When we’ve got palladium prices at their highest levels since 2001, oil prices edging higher, copper edging higher - it’s not doing anything to undermine the perception that the global economy is actually doing fairly ok.”
The IMF last week upgraded its global economic growth forecast for 2017 by 0.1 percentage points to 3.6 percent, and to 3.7 percent for 2018, from its April and July outlook, driven by a pickup in trade, investment, and consumer confidence.
Forecasts for the euro zone, Japan, China, emerging market Europe and Russia were all revised upwards.
CATALAN UNCERTAINTY
Uncertainty over Catalonia failed to put a significant dent in European stocks, although Spain lagged the broader index.
The pan-European STOXX600 added 0.2 percent, while Spain's IBEX .IBEX fell 0.7 percent.
The MSCI world equity index, which tracks shares in 47 countries, was up 0.1 percent, fuelled by the earlier gains in Asia and those in Europe.
Catalonia worries also pushed up the yield on Spain’s 10-year government bond. The gap between Spanish and German 10-year borrowing costs widened 2.5 basis points.
Catalan leader Carles Puigdemont failed on Monday to clarify whether he had declared independence from Spain last week, paving the way for the central government to take control of the wealthy region.
“Further gains in Asia and the relentless march higher in US equities have provided the impetus for European equity markets to push forward – despite Carles Puigdemont’s failure to provide a Yes or No response to whether Catalonia has declared independence,” said Rebecca O‘Keeffe, head of investment at Interactive Investor.
In Austria, conservative Sebastian Kurz is on track to become the next leader after Sunday’s election. He is seen as likely to seek a coalition with the resurgent far right because his party is far short of a majority.
The developments threaten to disrupt a move by German Chancellor Angela Merkel and French President Emmanuel Macron to draw up a roadmap to deeper European Union integration.
The euro took a knock for the third straight day on the uncertainty, falling 0.2 percent to $1.1801 EUR=EBS.
The dollar index, which measures the greenback against a basket of currencies, was 0.1 percent higher at 93.172 .DXY.
Gold XAU= was up 0.1 percent at $1,305.37 per ounce.
(Reporting by Ritvik Carvalho; additional reporting by Dhara Ranasinghe in London and Asia markets team; Editing by Andrew Heavens)
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China new yuan loans rise more than expected in September Saturday 14th October, 2017 – Reuters
Chinese banks extended more loans than expected in September, buoyed by demand from home buyers and companies, even as the government tightened the screws to wean the economy off its years-long addiction to cheap debt.
September loan data released on Saturday indicates that China has continued to give significant credit support for its economy ahead of a key Communist Party congress that opens on Oct. 18.
The next day, China releases third-quarter economic growth data. For the April-June quarter, Beijing reported stronger than expected growth of 6.9 percent from a year earlier.
Both bank lending and total social financing, a broad measure of credit and liquidity, look set to hit another record high this year.
People’s Bank of China Governor Zhou Xiaochuan, in a statement posted on its website on Saturday, said the economy this year is stabilizing and growing more strongly, and the momentum may continue in the second half.
In September, banks extended 1.27 trillion yuan ($193.05 billion) in net new yuan loans, central bank data showed. Analysts polled by Reuters had predicted 1.1 trillion yuan, compared with August’s 1.09 trillion yuan.
Household loans, mostly mortgages, rose to 734.9 billion yuan in September from 663.5 billion yuan in August, according to Reuters calculations based on the central bank’s data.
SHORT-TERM LOAN SPIKE SEEN
Household loans accounted for 58 percent of total new loans last month, down from 61 percent in August.
Short-term loans soared in the third quarter, increasing by 1.53 trillion yuan, almost three times higher than in the year-ago period, according to calculations by Wen Bin, an economist at Minsheng Bank in Beijing.
“A part of these funds are flowing illicitly to the property market and stock market,” said Wen.
Corporate loans in September were 463.5 billion yuan, down from 483 billion yuan a month earlier.
Broad M2 money supply (M2) in September grew 9.2 percent from a year earlier, beating forecasts for an 8.9 percent expansion, as August had.
The growth was in part due to a “seasonal increase in credit and fiscal deposits,” said Wen.
China’s central bank has said that the slowing M2 growth could be a “new normal” due to regulators’ stepped-up crackdown on risky shadow lending activities.
Total social financing (TSF), a broad measure of credit and liquidity in the economy, rose to 1.82 trillion yuan in September from 1.48 trillion yuan in August.
Capital Economics had expected TSF to pick up to 2 trillion yuan in September.
WALKING A TIGHTROPE
Chinese authorities are trying to walk a fine line by containing riskier types of financing and slowing an explosive build-up in debt without stunting economic growth.
For the first time this year, banks were required to start reporting off- balance sheet wealth management products to the central bank every quarter to give authorities a better sense of potential risks to the financial system.
But results of their “de-risking” campaign have been mixed.
Regulators appear to have made good inroads into reducing risks in the financial system from interbank and shadow bank lending -- which were arguably China’s most immediate systemic threat -- and they have allowed borrowing costs to creep up.
Lenders have also shifted more credit back onto their books and shed some lower quality assets.
However, credit growth has remained elevated and there is little evidence that companies are using windfall earnings this year to significantly reduce massive debt burdens.
Indeed, consultancy China Beige Book International (CBB) cautioned about the prevailing market view that China’s economic growth has so far been resilient to government policy tightening, arguing that it has yet to really kick in.
“The mistake is that deleveraging hasn’t gotten off the ground,” said CBB, which surveys thousands of firms quarterly. “If 2018 sees actual tightening, it will be far more traumatic to firms than most analysts realise.”
S&P downgraded China’s sovereign rating in September, saying its attempts to reduce debt risks are not working as quickly as expected and credit is still expanding too fast.
The International Monetary Fund warned this year that China’s credit growth was on a “dangerous trajectory” and called for “decisive action”, while the Bank for International Settlements said in late 2016 that excessive debt growth was signalling a banking crisis in the next three years.
REFORM PUSH
The PBOC has been steadily moving to contain financial system risks, while reiterating that it will maintain prudent and neutral monetary policy and continue with interest rate reform.
Governor Zhou, in the statement posted on Saturday, said positive progress has been achieved in economic transformation.
Analysts at Société Générale believe the PBOC took pre-emptive action in recent weeks to offset strains from further tightening measures planned for next year.
The PBOC in late September cut the amount of cash that some banks must hold as reserves (RRR) for the first time since February 2016. The move, effective in January, offers an earnings boost to banks if they lend more to struggling smaller firms and the private sector.
Still, SocGen does not expect the reserve cut alone will be enough to offset an expected slowdown in China next year.
China is likely to accelerate its implementation of reforms after a twice-in- a-decade Communist Party Congress, if President Xi Jinping strengthens his power as widely expected, Capital Economics said in a note last week
But, it added, “given Xi’s reluctance to relinquish state control over key parts of the economy, China’s structural problems are likely to remain unresolved.”
Policymakers’ efforts to push debt-to-equity swaps, securitise bad loans and increase financial market regulation may only provide temporary relief from deep underlying problems such as the poor allocation of resources, such as state life support for loss making government firms, it said.
(Reporting by Lusha Zhang and Kevin Yao; Writing by Engen Tham; Editing by Kim Coghill and Richard Borsuk)
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China central bank chief surprises with gravity-defying 7 percent second- half growth forecast Monday 16th October, 2017 – Reuters
China’s central bank governor said the economy could grow 7 percent in the second half of this year, accelerating from the first six months and defying widespread expectations for a slowdown.
The uncharacteristically explicit growth forecast by Zhou Xiaochuan came just days ahead of a twice-in-a-decade Communist Party Congress, where President Xi Jinping is expected to strengthen his grip in a leadership reshuffle.
While China produced forecast-beating growth of 6.9 percent in the first half, many economists and investors had expected momentum would start to fade later in the year.
Those views are largely predicated on three factors: higher borrowing costs; increasing curbs on home buying to cool soaring prices; and government-mandated shutdowns of some steel mills and factories in coming months to reduce winter air pollution.
But the driving force behind growth has been mainly rising household consumption, Zhou said in remarks published on the People’s Bank of China’s (PBOC) website on Monday.
“China’s economic growth has slowed over the past few years...but economic growth has rebounded this year, with GDP reaching 6.9 percent in the first half, and may achieve 7 percent in the second half,” Zhou was quoted as saying at the G30 International Banking Seminar in Washington on Sunday.
Zhou, the country’s longest-serving central bank chief, is likely to step down next year, sources told Reuters.
Investors are waiting to see if sustained economic growth this year will give China’s leaders the confidence to quicken and deepen reforms, though many say Beijing continues to rely too heavily on debt-fueled stimulus.
The government had set a 2017 growth target of around 6.5 percent. Zhou’s estimate implies an expansion of about 6.95 percent, topping growth rates in 2015-2016.
Economists had expected growth to ease to 6.8 percent in the third quarter and 6.6 percent in the fourth quarter, but the impact of the pollution shutdowns is a major wild card.
“Growth in the second half will be slower...I don’t think 7 percent growth is very possible,” said Xu Hongcai, Deputy Chief Economist at China Center for International Economic Exchanges (CCIEE), a prominent think-tank in Beijing.
“Investment and consumption growth have eased. And foreign trade is not likely to be as strong as in the first half.”
The International Monetary Fund last week reiterated its stance that there may now be a now greater chance of a sharp slowdown in China, if authorities delay the withdrawal of hefty stimulus as they focus on achieving growth targets.
FIRING ON ALL CYLINDERS?
China will report third-quarter gross domestic product (GDP) on Thursday. September data so far has shown imports and bank lending grew more than expected, while exports picked up.
On Monday, data showed producer prices jumped 6.9 percent in September on-year, confounding views that producer inflation had peaked.
A year-long construction boom has helped boost prices for building materials and resources from steel and copper to iron ore, helping to create a reflationary pulse worldwide in commodities markets and manufacturing.
Prices have turned wildly volatile in recent weeks on fears of shortages as Beijing embarks on its biggest environmental crackdown yet to reduce the country’s notorious winter smog.
Some steel mills, smelters and chemical plants have cranked up output ahead of curbs on production or outright shutdowns.
Shanghai steel futures surged to a one-month high on Monday along with raw materials iron ore and coking coal, and the ripples are spreading globally, with LME copper futures hitting a three-month high.
Other data on Thursday is expected to reinforce the view that China is still in high gear, with growth in industrial output and retail sales seen accelerating while fixed investment may hold at a roughly steady pace.
Private business surveys, however, suggest the recovery has not been balanced, with large state-run firms reaping more of the benefits from robust growth than smaller, private companies who don’t enjoy the same access to cheap and ample credit.
Moreover, a recent Reuters analysis showed few of China’s listed companies are using windfall profits this year to reduce massive debts despite Beijing’s campaign to rein in risks.
DEBT BATTLE
Zhou also said China remains confident in its ability to fend off systemic risks and keep its fundamentals healthy and stable.
Risks in so-called shadow banking have somewhat eased, while non- performing loans are still at a relatively low level, the central bank said.
Chinese authorities are trying to walk a fine line by containing riskier types of financing and slowing an explosive build-up in debt without stunting economic growth.
But authorities have also frequently kept the system well supplied with cash to avoid interest rates spiking too rapidly, which could slam the brakes on growth, and some market watchers fear “deleveraging” efforts aren’t progressing fast enough.
Raymond Yeung, Greater China chief economist at ANZ in Hong Kong, said that China needs to pay attention to high loan growth even if more funds are now flowing into real investment rather than speculative activity.
“In any economy, if you see very strong loan growth, you have to be very cautious about where the money is going...”
(Reporting by Brenda Goh and Ryan Woo; Additional reporting by Elias Glenn; Editing by Sam Holmes and Kim Coghill)
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Nikkei rises for 10 straight days as dollar-yen stable; large caps gain Monday 16th October, 2017 – Reuters
Japan’s Nikkei share average rose to a fresh 21-year high on Monday as the dollar stayed steady against the yen, while index-heavyweight SoftBank surged on news that T-Mobile and Sprint plan to merge.
The Nikkei climbed 0.5 percent to 21,255.56, the highest closing level since late 1996. The Nikkei extended its winning streak to 10 days, its longest since May 2015.
The dollar was flat at 111.89 yen.
Traders said that belief that Japan’s ruling party bloc will win the general election later this month continued to underpin market sentiment, and a weaker yen raised hopes that Japanese companies will report strong earnings.
While companies will start reporting first half earnings later this month, “the current foreign exchange level suggests that manufacturers’ earnings will be bright,” said Takuya Takahashi, a strategist at Daiwa Securities.
Takahashi said Daiwa analysts expect Japanese companies to post a 14 percent rise in their pre-tax profits for this year under the assumption that the dollar will trade at 110 yen.
SoftBank Group Corp soared 1.3 percent after people familiar with the matter told Reuters that T-Mobile U.S. Inc. and Sprint Corp plan to announce a merger agreement without any immediate asset sales, as they seek to preserve as much of their spectrum holdings and cost synergies as they can before regulators ask for concessions.
Sprint shareholders are expected to receive little to no premium in the deal, meaning that SoftBank, which controls Sprint, and other Sprint shareholders will own around or more than 40 percent of the combined company.
Other large cap stocks such as tech shares also attracted buyers, with Advantest Corp rising 3.1 percent, Hitachi Ltd advancing 1.8 percent and Sony Corp adding 1.1 percent.
Banks also gained ground. Mitsubishi UFJ Financial Group rose 1.5 percent and Mizuho Financial Group added 1.4 percent.
The broader Topix gained 0.6 percent to 1,719.18.
(Editing by Sam Holmes)
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Euro falters after biggest weekly rise in month as ECB eyed Monday 16th October, 2017 – Reuters
The euro edged lower on Monday after posting its biggest weekly loss in a month though prices clung to well-worn trading ranges before a central bank meeting next week where policymakers are set to unveil a plan to roll back its record stimulus policies.
With political uncertainty in the form of Catalonia’s bid for independence and Austria’s election outcome having a very muted impact on the currency relative to the bond markets, investors moved to the sidelines to focus on economic data.
“It is all over to the ECB now and Catalonia and Austria are being discounted as local problems rather than regional concerns,” said Thulan Nguyen, a Currency Strategist at Commerzbank in Frankfurt.
The single currency fell 0.1 percent to $1.1814 but was hemmed in a tight 0.3 percent range. It rose 0.8 percent last week, its biggest weekly rise in a month, according to Thomson Reuters data.
Catalan authorities must drop a bid for independence by Thursday, the Spanish government said, moving closer to imposing direct rule over the region after its leader missed an initial deadline to back down.
Despite a raft of euro negative news in recent weeks, the euro has remained broadly stable against the dollar and even chalked up gains against sterling and other currencies, indicating some buying from institutional investors.
Long euro positions rose for a third consecutive week to more than $14.47 billion, its biggest in more than five years, according to Commodity Futures Trading Commission data released last week.
“ECB expectations will be the main driver and we see the overall trajectory of the euro higher, though there may be some consolidation after the heavy buying in recent weeks,” said Manuel Oliveri, an FX strategist at Credit Agricole in London.
But the euro’s losses have been limited thanks to a broadly muted dollar as subdued inflation data raised expectations the U.S. Federal Reserve will not strike an overtly hawkish tone at its policy meeting at the end of the month.
Although U.S. consumer prices rose the most in eight months in September, as gasoline prices soared in the wake of hurricane-related refinery disruptions, underlying inflation remained muted.
The dollar index was flat at 93.11, lacking momentum after falling last week.
(Reporting by Saikat Chatterjee, editing by David Evans)
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BVI seeks loans, investors after some $3.3B damage Friday 13th October, 2017 – BVI News
While noting that damage to the territory as a result of recent natural disasters is estimated at some $3.3 billion across all sectors, Premier Dr D Orlando Smith said his administration will use an appropriate mix of financing including grants and affordable borrowing to fund reconstruction.
He will also be making a case for the British Virgin Islands (BVI) as soon as today when he meets with World Bank officials.
The premier, who also is the finance minister, was invited to Washington DC to participate in discussions as it relates to recent hurricanes that battered sections of the Caribbean, including the BVI.
“My administration has decided the best way forward for the territory is to utilise an appropriate mix of financing, including grants and affordable borrowing, to fund our reconstruction. We continue to foster relationships with private investors and companies, donor agencies, countries, lending institutions, international investors, and the United Kingdom government to facilitate the funding needed. In addition, we have already received some financial contributions and pledges from our regional and international friends,” Premier Smith said.
“In light of the effects of the recent hurricanes around the Caribbean, the World Bank will be hosting a discussion this weekend as part of its annual meetings. In attendance will be the President of the World Bank, Jim Yong Kim. I will be using this opportunity, which is facilitated through the United Kingdom’s membership, and participating in a round-table discussion in Washington DC on Friday October 13 to highlight the territory’s position. I will be making a case for the Virgin Islands to have greater access to financial support to fund our reconstruction.”
Premier Smith also reassured that, although he will seek investors as a means of helping the BVI to get back on its feet, such action will be done responsibly.
“We are also exploring options with international investors to look at reasonable and responsible opportunities for financing our rebuild. While we are reminded daily of the importance to get our islands back to its pristine landscape, we also know that our financial actions will have a significant impact on our future development.
To this end, we are seeking all possible options to fund our rebuilding responsibly,” added Premier Smith.
The BVI, within the last three month, has been affected by a devastating tropical wave, followed by Hurricane Irma that caused widespread destruction, and then Hurricane Maria that caused minimal damage.
“Based on preliminary assessments, the estimated damages to the territory is in the area of $3.3 billion across all sectors,” Premier Smith said yesterday, October 12.
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No import duties on vehicles, food, clothing Friday 13th October, 2017 – BVI News
Food, clothing, vehicles and other non-luxury items have been added to the list of goods on which Government is waiving customs duties, Premier and Minister of Finance Dr D Orlando Smith announced yesterday, October 12.
He said the move is aimed at providing financial ease for residents as they continue to rebuild following widespread destruction caused by Hurricane Irma on September 6.
“Immediately following the passage of Irma and even now, it continues to be a priority for my office to ensure that local businesses continue so that goods and services can be provided to residents, and so that jobs remain in our economy. To support the rebuild for residents and to provide some level of financial ease, we have waived customs duties on building supplies, generators, and now we have also added items such as food, clothing, vehicles and other non-luxury items,” the premier said.
He, in the meantime, noted that the territory’s Gross Domestic Product (GDP) will be substantially impacted.
“While our financial services industry has successfully continued serving clients, we know that with losses to our tourism sector and to our local economy our Gross Domestic Product will be substantially impacted. Yet we must fund our rebuild,” Premier Smith further said.
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Gov't Not Targeting Imf's $70m Slash Friday 13th October, 2017 – Tribune 242
The Government is not targeting the IMF's recommended $70 million wage bill slash, the Deputy Prime Minister said yesterday, but it must right the Bahamas' "upside down" economy.
K P Turnquest told Tribune Business that the Minnis administration will use 'a scalpel rather than a shotgun' to right-size the public sector, suggesting that the former government had used it as an employment agency during its five-year term.
This, he argued, had turned the economy "upside down" by making the Government - rather than the private sector - "the major employer" and job creator, while placing an ever-increasing burden on Bahamian taxpayers and the "productive sector" to finance a bloated public service.
Mr Turnquest said reversing this situation was among the Government's top priorities, but any civil service downsizing would be done "organically" by not replacing non-essential positions when staff leave or retire.
The International Monetary Fund (IMF), in its Article IV report, had recommended that the Government could achieve more than $200 million in Budget savings through a combination of reducing the civil service wage bill to its 2005-2016 average; requiring public servants to contribute to their own pensions; and cutting subsidies to state-owned corporations by a sum equivalent to 1.25 per cent of GDP.
The Fund targeted wage bill savings equivalent to 0.8 per cent of GDP, or just below $70 million, and its recommendation set off alarm bells among many Bahamians and public sector workers, who feared instant - and widespread - redundancies if the Government adopted its suggestions.
Mr Turnquest, though, yesterday pledged that civil service cuts would first be sought through "natural attrition" rather than forced lay-offs, adding that the Government had set no savings target.
As for state-owned enterprises (SOEs), he said the Minnis administration had told them to focus on supply-side solutions and become more efficient, rather than impose "dramatic rate increases" on Bahamian consumers to cover their costs.
"At the end of the day I don't know that it's going to be $70 million in cuts," the Deputy Prime Minister told Tribune Business, when asked if the Government planned to follow the IMF's recurrent spending reduction 'road map'.
"We do intend to make the system more efficient and more affordable. We hope to do that through natural attrition, and that's our focus."
Mr Turnquest, speaking from Washington DC where he is attending IMF and World Bank annual meetings, said the Government was following its own fiscal consolidation plan, rather than being dictated to by the IMF and credit rating agencies.
"The Government of the Bahamas has outlined a plan for the IMF and Moody's, and will do the same when Standard & Poor's comes," he added. "We're not going to be reactive with our response to any of the agencies.
"We're going to be disciplined in our approach and follow our plan..... It's one where we recognise we have to keep recurrent expenditure down at a sustainable level, because at the current trajectory it's unsustainable, and that's why the debt has skyrocketed.
"We will take corrective measures, but will not take any decision that hampers the economy or the creation of opportunities and jobs."
Mr Turnquest's comments are a recognition that the Government will 'bite off more than it can chew' if it tries to right-size the public sector in one go, as this would produce a significant increase in unemployment and cut disposable incomes/spending power, with negative implications for the economy and Bahamian society.
The IMF's Article IV report blamed the Christie administration's "lax spending controls" prior to the May 10 general election for the spike in recurrent spending, which comprises the Government's fixed costs - wages, benefits and rents.
The Deputy Prime Minister yesterday said this had resulted in an unhealthy 'role reversal', where the Government had taken over from the private sector as the main economic growth engine.
"With the lack of growth, and the inability of the private sector to absorb the capacity in the system, the Government has been absorbing that over the past five years to keep the unemployment rate artificially down," Mr Turnquest told Tribune Business.
"The funnel is upside down. The public sector is the major employer and being funded by the lower end, the private sector. It's unsustainable, and we have to figure out how broaden the base through the private sector so that we relieve the burden from the average citizen and productive sector."
He added that the Government was assessing how to "graduate" veteran civil servants from the public service once they reached retirement age, in a bid to enable the recruitment of younger workers and to allow the private sector to benefit from their skills.
"It is intended that it will be very organically done," Mr Turnquest said, "meaning that as civil servants reach time and age, they will be graduated out of the system and it will build capacity with the private sector."
He added that the Government was also examining the issue of public servants contributing to their retirement income, which would replace the current 'pay as you go' defined benefit scheme that is 100 per cent financed by the taxpayer.
And, with some $429 million in subsidies being provided to state-owned enterprises (SOEs) during the 2017-2018 fiscal year, Mr Turnquest said all had been "challenged" by the Minnis administration to "wean themselves off the public purse".
"One of the challenges we've put out to the SOEs is that they must come up with plans that ensure they are not dependent on the public sector for support," he told Tribune Business.
"We want to look at ways to have cost recovery at these entities without creating dramatic increases in rates. They have to become more efficient."
Mr Turnquest continued: "We're saying to them that you have to wean yourself off the public purse, otherwise we will have to make some decisions about whether to privatise, and take them to a private sector mentality. Become competitive and efficient engines of growth."
He added that "sacrifice" and support from the Bahamian public were vital to turning the country's fiscal and economic situation around, and said: "I'm confident better days are ahead of us if we can impose the kind of financial discipline every family has to go through."
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BDB Chair: 'Days of $50k Hand-Outs Over' Friday 13th October, 2017 – Tribune 242
The Bahamas Development Bank's (BDB) chairman yesterday pledged to tighten lending protocols, adding: "The days of giving someone $50,000 and saying: 'Go get it done' are gone".
Lynden Nairn told Tribune Business that the BDB had little choice but to re- examine "the entire lending regime" given that more than 60 per cent of its $34 million credit portfolio is non-performing, or more than 90 days past due.
While the high loan delinquency levels have prevented the BDB from fulfilling its mandate to Bahamian entrepreneurs, Mr Nairn said the institution - once reformed - still had a vital role to perform in filling the void left by commercial banks.
He pointed out that outstanding credit extended to the agriculture, fisheries and manufacturing sectors had declined by 56.4 per cent since the turn of the century, falling from $106 million in 2000 to $46 million today, as Bahamas-based commercial banks withdrew from lending to the productive sectors in favour of consumer credit.
In an earlier speech to the Rotary Club of West Nassau yesterday, Mr Nairn sought to both define and redefine the BDB's future role, explaining that it would stay relevant - once cleaned-up - by supporting foreign exchange- earning industries central to the Government's announced policy goals.
To get there, he explained to Tribune Business that the BDB was seeking to restructure $64 million in long-term debt (see other article on Page 1B) plus revamp its lending approach by focusing on borrowers' business plan sustainability and corporate governance.
"We have to do a better job assessing credit," Mr Nairn told Tribune Business.
"We are certainly looking at our protocols generally. We do know that we are going to require our borrowers to have a strong corporate governance element. "We need to understand the level of accountability that our borrowers will have with a Board or advisory team. We need to know who those people are, and have a sense of the extent to which they've been successful. Gone are the days of giving someone $50,000 and saying: 'Go get on with it'."
Mr Nairn continued: "We're looking at the entire lending regime. The bank has always had a committee that examines all of the loan applications. We're strengthening that committee.
"Frankly, we're more concerned with the strength of the business plan than we are about the underlying collateral. That ought to be the root of development banking anyway.
"Historically, we have insisted on collateral in most cases.
"But just because someone has collateral doesn't mean they will get a loan from the bank.
"You have to have a solid business plan."
Despite its problems, Mr Nairn argued that an institution such as the BDB remained relevant to the modern Bahamian economy and its entrepreneurs as there were precious few financing sources for Bahamian start-ups.
Tying the commercial bank withdrawal from start-up lending to a lack of growth and economic diversification, he added: "We've not been able to support entrepreneurs. They've had no real access to funding."
Pointing out that developed world nations such as Canada, as well as the likes of Jamaica and Barbados, all have development banks, Mr Nairn said the BDB planned to focus on lending to entrepreneurs in the energy, tourism, cultural, agriculture, marine, technology and natural resources sectors.
"They've got significant foreign currency earning potential," he told Tribune Business. "We believe the barriers to entry are very, very low, and we think they can generate a significant amount of new employment."
Mr Nairn said the BDB had partnered in the development of eco-tourism in the southern Bahamas, starting with Inagua. "The objectives of the programme include increasing sales and promotion of the selected island as an eco-tourism centre, increasing overnight tourist arrivals sufficient to deliver occupancy rates above 60 per cent for participating guesthouses, and establishing 15-20 small tourist-related businesses that provide activities for guests," he added.
Given the restrictions imposed by the BDB's own Act, Mr Nairn said it also planned to target the agricultural distribution and processing sector, arguing that this would potentially relieve the Government of responsibility via its packing houses and produce exchanges.
"A business that improves distribution, meets the quantity and quality needs of the marketplace, pays farmers in a timely manner, effectively allowing farmers to do what they are best able to do, farm, would do wonders for our economy," the BDB chairman added.
Mr Nairn said the BDB had also worked with the Inter-American Institute for Cooperation on Agriculture (IICA), Prime Minister's Office on Grand Bahama and the Department of Cooperatives to create the Youth Apiculture Development Programme.
"This programme is intended to create 20 apiarist entrepreneurs per year over the next three years, with a view to creating a minimum of 100 jobs for persons between the ages of 16- 25 while substituting imports or generating exports of $4 million in product value, and establishing at least three commercially viable apiary cooperatives in Grand Bahama," he explained.
Mr Nairn said the BDB was also developing a three-year strategic plan in a bid to become profitable within that timeframe, and is seeking to become more transparent and accountable via regular public updates starting next month.
He added that the BDB was well-placed to administer public-private partnership (PPP) arrangements on the Government's behalf, serving "as an intermediary between the.... sectors with respect to identifying potential PPPs, locating various sources of funding and initial and long- term administration".
"We think that's an exciting opportunity," Mr Nairn told Tribune Business of PPPs. "We think that we can perhaps identify opportunities for the Government, put the two sides together and actually administer them as well.
"We think that would do wonders, and we are well-suited for that. As a bank we have people who can assess these things. We've got lenders, financial people who can make the assessment, follow up with both sides and, on a long-term basis, obtain reports and liaise with lawyers. We've got the infrastructure for it."
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BDB: 'Everything Turns' On $64m Debt Restructure Friday 13th October, 2017 – Tribune 242
The Bahamas Development Bank's (BDB) chances of meeting the Government's three-year 'self-sufficiency' target depend entirely on its ability to restructure $64 million in long-term debt.
Lynden Nairn, the institution's newly-appointed chairman, told Tribune Business yesterday that "everything turns" on negotiations with the National Insurance Board (NIB) and other holders of the BDB's $43 million bonds in the quest for "breathing room".
Emphasising that the BDB was not asking institutional investors to write-off their investments, Mr Nairn revealed that recapitalisation plans also rely on the Government agreeing to convert a $21 million debt into a larger equity position in the bank.
With more than 60 per cent of the BDB's $34 million loan portfolio rated 'non-performing', the institution has been in "a holding position" for several years, unable to engage in lending to new entrepreneurs simply because it lacks the liquidity to do so.
Mr Nairn said the BDB's new Board had initiated efforts to collect on "100 per cent" of the security/collateral for non-performing loans, where borrowers failed to settle or agree a payment plan, as it seeks to place the bank in a position where it can again begin to fulfill its mandate.
This task, though, pales in importance compared to the long-term debt restructuring, which Mr Nairn said was critical if the BDB is to stand on its own feet by 2020.
This was the deadline set by K P Turnquest, the deputy prime minister, for ceasing the annual $3 million bond interest payments the Government has been making on the BDB's behalf - a practice that appears to have been in existence for seven years.
"What we are aiming to do is to effectively recapitalise the bank by seeking to convince our long-term lenders to restructure their facilities," Mr Nairn told Tribune Business.
"For example, we are seeking to persuade the Government to convert the bank's indebtedness to it into equity. We're asking the Government to convert $21 million or so that would have arisen from the annual payment of $3 million or so for bond interest."
The Bahamian taxpayer, via the Public Treasury, has been forced to finance interest payments to the bondholders as a result of the BDB's weak financial performance, which has left it unable to meet its obligations.
Mr Nairn yesterday confirmed the BDB had begun discussions with NIB and other bond holders to restructure its debt. While he declined to confirm specifics, this is likely to involve extending the maturity/principal repayment date and lowering the interest rate coupon.
This would reduce the BDB's debt servicing costs, and the chairman told Tribune Business: "We do have a significant bond obligation, which today stands at $43 million.
"They are held by NIB and others. We have commenced discussions with them with respect to restructuring. We're certainly not asking them to do write-offs of any of it, but we do need some breathing room so we can grow the performing loan book."
Asked whether the BDB could achieve the Deputy Prime Minister's three- year 'self-sufficiency' target, Mr Nairn replied: "We think that it's possible.
"Frankly, Neil, with a lot of the plans we have, everything turns on our ability to restructure our long-term debt. That's the major thing that needs to happen, and if that doesn't happen, and we can't restructure, then the answer is that's not achievable. If we are able to restructure, there's a very good possibility we will be able to do it."
Mr Nairn declined to give a precise ratio for the BDB's current non- performing loans, saying: "I do know what it is. I'm almost hesitant to tell you. Let me say that the non-accrual rate is in excess of 60 per cent."
In an earlier address to the Rotary Club of West Nassau, Mr Nairn said the BDB was unable to fulfill its mandate - financing the entrepreneurial dreams of Bahamians - due to a combination of high loan delinquencies, high indebtedness and under-capitalisation.
"Having amassed significant losses over the decades, the bank has essentially been in a holding position, primarily because it lacks the liquidity to engage in meaningful new lending," he added. "The bank is saddled with debt and an extremely high level of non-performing loans.
"The reality is that even if the bank never had a single bad loan, it still would have been unprofitable. That is so because the bank was undercapitalised from the beginning, and was/is operationally inefficient - in part because of a lack of economies of scale."
Mr Nairn added that the BDB's long history of high non-performing loan levels was "no secret", and the Board had little choice but to secure all loan collateral pledged by delinquent borrowers if it was to engage in new lending.
"The bank is patently aware of the need to institute measures that would minimise non-accrual loans," the chairman said. "With respect to existing non-accrual loans, the bank has embarked on an initiative designed to liquidate 100 per cent of collaterals held for non-accrual loans in the shortest possible time.
"Those measures are essential so that the bank might recover some of its capital for the purpose of new advances."
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Central Bank Back in Compliance on Gov't Debt Limits Friday 13th October, 2017 – Tribune 242
The Central Bank yesterday said its government debt holdings are back in compliance with its governing Act, with medium and long-term maturities equal to 12.52 per cent of its demand liabilities.
The regulator, responding to the IMF's Article IV report, confirmed that proposals to impose limits on "the total value" of government debt that it can hold will be circulated for public consultation before year-end 2017.
It added that it was "continuing to focus" on reducing its lending to the Government through selling its Bahamas Government Registered Stock (BGRS) holdings to private investors through the secondary market, which has reduced its holdings by $80 million since its creation in 2017.
And John Rolle, the Central Bank's governor, last night confirmed that "at least" $150 million of $200 million in 'bridge financing' - extended to the Government in June 2017 via Treasury Bills - will be repaid "in the short term".
The Central Bank was responding after the IMF's Article IV full report disclosed that it breached its legal limits when it increased its government debt holdings in the wake of Hurricane Matthew.
"Following the passage of Hurricane Matthew, the Central Bank of the Bahamas increased its holdings of long-term government bonds to $200 million, about 2 per cent of GDP, breaching statutory limits," the Fund said.
"However, Central Bank's main target - on maintaining a level of reserves of at least 50 per cent of the monetary base - continued to be met, albeit with smaller margins than in the past. [The IMF] noted that increases in these holdings should be reversed to ensure compliance with statutory limits."
The Government and Central Bank, in response, argued that the limit was only broken in extraordinary circumstances - namely to assist the Christie administration with "emergency financing" in Matthew's wake, so that it could provide disaster relief and infrastructure repairs.
The Central Bank, moving quickly to respond to Tribune Business's article, yesterday said its own Act limited government debt holdings with maturity terms of five years or more to 20 per cent of demand liabilities. These are "the stock of Bahamian currency issued" by the Central Bank, plus deposits placed with it.
The regulator admitted that its holdings had "trended very close" to this ceiling for several years, but it acted in 2016 to achieve "a permanent reduction" in government debt holdings regardless of maturity.
However, these plans were temporarily thrown off course by Hurricane Matthew, with the Central Bank's $20 million bond investment - part of the $150 million in emergency financing raised by the Christie administration - taking it "marginally" beyond the 20 per cent limit for several months earlier this year.
Emphasising that it was now back in compliance with the Central Bank of the Bahamas Act, the regulator said in a statement: "In light of the Bank's ongoing efforts to reduce its exposure to Government debt by, inter alia, selling certain tranches of its medium and long-term securities' holdings to the public, the statutory ratio has been gradually reduced to 12.52 per cent at the end of September 2017."
Mr Rolle confirmed last night that the 12.52 per cent referred to the Central Bank's medium to long-term bond holdings, with maturities of five years-plus, and did not include short-term government paper.
The Central Bank, though, added that it was not unusual to provide the Government with financing given that it was one of its bankers. "The Central Bank continues to focus on reducing total lending to the Bahamas Government in a comprehensive fashion, both in co-ordination with the Ministry of Finance and through direct engagement with the investor community," it added.
"This addresses the legal constraint on holdings of medium and longer term debt issued by the Government, which is stipulated in the current Central Bank Act. It also addresses holdings of other debt of a shorter-term nature."
Referring to the 20 per cent ratio 'cap' on medium and long-term government debt holdings, the Central Bank conceded: "This ratio has trended very close to the ceiling for a number of years, before the Bank took action in 2016 to begin the process of achieving a permanent reduction in the measure and in total holdings of debt over time, irrespective of maturity.
"Indeed, an initial restructuring of the Central Bank's balance sheet resulted in a reduction in longer-term bond holdings in June 2016. This transaction, with institutional investors, swapped $25 million of long bonds for shorter-term instruments.
"Afterwards, the programme of secondary sales was launched in August 2016, resulting so far in total sales of $80 million off the Central Bank's balance sheet. At least another $150 million is destined to be repaid by the Government in the short-term under the terms of the bridge financing that was provided during 2017."
Explaining how its plans were blown off course temporarily, the Central Bank said: "This goal notwithstanding, it is important to note that following the passage of Hurricane Matthew in October 2016, the Bank participated in the Government's subsequent $150 million hurricane relief facility, investing in a $20 million Bahamas Government Registered Stock (BGRS) issue, while the commercial banks provided $130 million in financing via a long-term loan.
"This transaction, when added to the Bank's prior holdings of Government securities, contributed to the ratio of Government securities to demand liabilities rising marginally above the 20 per cent ceiling for a few months during 2017."
The Central Bank said consultations with the IMF had resulted in the development of a tougher legal framework, which would impose limits on the total value of government debt that it can hold.
"The present limits on holdings of government debt, referenced by the IMF, are less comprehensive than those which a new governance framework for the Central Bank would introduce," it added. "The current operations targets for Central Bank are also more comprehensive, and are geared towards strengthening the overall backing for the Bahamian dollar."
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Baha Mar Launches Hospitality Academy Thursday 12th October, 2017 – Tribune 242
Baha Mar has launched its Hospitality Academy in a bid to equip Bahamians with the necessary skills and expertise for a career in the resort and tourism industries.
The Baha Mar Hospitality Academy is a four-week programme aimed at developing future workers. The programmes will offer a variety of courses, ranging from personal and professional development to customer service, plus practical exposure to all areas of luxury hotel operations.
Select courses will offer targeted training for specific careers in food and beverage, housekeeping and guest services. Courses will also include instructions on resume writing and interviewing to improve prospects for securing employment in the resort industry.
"We've made it a priority to dedicate significant resources towards training Bahamians to give them the skills they'll need for a successful career in the hospitality industry," said Graeme Davis, Baha Mar's president.
"Baha Mar Hospitality Academy is representative of our commitment to the Bahamas and its people, as well as their career development and well-being."
The training programme is designed to prepare potential recruits for positions at Baha Mar, as the destination resort ramps up recruitment ahead of its full opening in Spring 2018, but is open to all Bahamians - even those seeking successful careers elsewhere in the hospitality industry.
Currently at over 3,000 employees, Baha Mar will increase its workforce to 4,000 by the end of this year, and is on track to double current numbers - reaching up to 6,000 associates - by the grand opening in April 2018.
There is no guarantee of employment upon completion of the Hospitality Academy programme.
In addition, all students will have access to an on-site job fair for Grand Hyatt, SLS Baha Mar, Rosewood Baha Mar, and Grand Hyatt Baha Mar during the four-week programme.
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BPL Develops Bahamian management Strategy Thursday 12th October, 2017 – Tribune 242
Bahamas Power and Light's (BPL) Board has developed a plan that will place the monopoly electricity provider back under Bahamian management, its chairwoman revealed yesterday.
Darnell Osborne told Tribune Business that the Board's proposal also includes a revision of the business plan from BPL's former manager, PowerSecure.
"We have come up with a plan on the way forward which includes revising the business plan, which was already done, but revising it minus PowerSecure. We will have that revised," said Mrs Osborne.
Power Secure's BPL plan, which had been kept confidential for months under the former administration, was tabled in Parliament last month when Works Minister, Desmond Bannister, announced the Government had severed its management services agreement (MSA) with the US utility.
Mrs Osborne told Tribune Business: "The Board has also made other plans in terms of the restructuring of the company. We have had some discussions with the Minister. "We have proposed a restructure in terms of the best way forward for managing the company under Bahamian management. Some aspects of that have already been approved by the Minister. There should be more coming out on that next week."
PowerSecure, now a part of Southern Company, had a five-year operating agreement, which it signed in early 2016. That agreement provided for a maximum $25 million pay-out.
Since taking the helm, PowerSecure's efforts at restructuring the cash- strapped utility provider were marred by island-wide power outages in the capital, and on some Family Islands.
PowerSecure's BPL 'business plan' identified numerous areas of cost savings aimed at providing the energy cost reduction long sought by Bahamian businesses and households.
Besides fuel costs, the plan revealed that Bahamians were being billed for "as much as $14 million annually" for energy they do not consume, as a result of losses and pilferage from BPL's system.
PowerSecure had also suggested that BPL was over-staffed by about 30 per cent, and recommended that it slash the workforce by nearly 300 persons in a staggered downsizing to save $13 million per year.
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Haiti seeks funding with its partners Saturday 14th October, 2017 – Haiti LIBRE
On Thursday, a delegation of the Government of Haiti (GdH) led by Jude Alix Patrick Salomon, Minister of Economy, accompanied by Aviol Fleurant, Minister of Planning and Jean Baden Dubois Governor of the Central Bank held discussions with leaders of multilateral and bilateral institutions (henceforth development partners) involved in development efforts in Haiti. The meeting was convened by the International Monetary Fund (IMF) as a follow-up to conversations between the the President of Haiti Jovenel Moïse and Christine Lagarde, Managing Director of the IMF, in the margin of the recent United Nations General Assembly in New York.
The Government of Haiti (GoH) and development partners agreed that economic and social stability are paramount to achieve sustainable growth and development objectives. Accordingly, the Haitian Authorities and the IMF committed to work toward completing an agreement on a six-month Staff-Monitored Program (SMP). Under this SMP, fiscal policy will focus on mobilizing domestic revenue to make room for needed increases in public investment, including investments in health, education, and social services. The program will benefit from development partners’ support to ensure the concessional financing of key strategic sectors and implementation of structural reforms while mitigating social impacts in order to allow for the success of the program. The SMP is to be designed to build a track record and support a future request by the GoH for an arrangement under the IMF’s Extended Credit Facility (ECF).
The GoH and development partners agreed that coordinated efforts are essential to address structural bottlenecks and implement key reforms in the energy sector, where large losses arising from the operations of the public electricity utility (EDH) have in recent years been responsible for approximately half of the public sector deficit. These reforms include increased flexibility in supplier pricing, reduction of administrative costs, improvement of billing and collection rates, rehabilitation and expansion of the national grid, and transition to lower-cost and renewable energy sources.
The GoH and development partners also identified improvements in public finance management as crucial to ensure long-term debt sustainability. Mobilization of domestic resources and institutional strengthening are also priorities. Haitian representatives cited agriculture, road and hydraulic infrastructures, reforestation and seed production, low income and affordable housing, information technology and technical and vocational training as areas where greater support is needed. All parties noted the need for the government of Haiti to foster a climate which facilitates investment and economic opportunity.
All parties agreed to maintain strong engagement to capitalize on the momentum for reform and economic development in Haiti. To facilitate investments and make optimal use of both domestic and development partner resources, the GoH committed to develop, in cooperation with domestic stakeholders and international partners, a long-term investment plan in order to sequence and prioritize needed investments.
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More Cruise Ships are coming to St. Kitts Thursday 12th October, 2017 – SKN Vibes
While the passing of Hurricane Irma and Maria respectively did not have serious negative impact on St. Kitts, the devastation to major ports of call in the Northern Leeward Islands has impacted itineraries for cruise calls to St. Kitts since September 7.
Cruise lines are in the process of adjusting their itineraries and diversifying their ports of call following extensive damage received in San Juan, which is the homeport to vessels including the Carnival Fascination and Royal Caribbean’s Adventure of the Seas, where repairs are ongoing. Further, cruise lines such as Royal Caribbean have modified sailings to aid in delivering humanitarian relief to islands in need. Both outcomes have resulted in the revision of many cruise lines’ Caribbean itineraries’ cancellations and additions to St. Kitts.
On Wednesday, October 4, 2017, Minister of Tourism the Hon. Lindsay F.P. Grant led a delegation of Ministers of Tourism including The Hon. Asot A. Michael of Antigua-Barbuda and St Lucia’s Minister of Tourism, The Hon. Dominic Fedee, other cruise tourism officials from St. Kitts & Nevis, St. Lucia and Antigua, and the Chairman of the St. Kitts Tourism Authority Mr. Nicholas Menon to meet with Royal Caribbean and Carnival Cruise Line in a collaborative effort to reassure the cruise lines about post-hurricane port and destination capabilities and receive updates on short- and medium- term alterations to cruise line itineraries.
Royal Caribbean has scheduled an additional 35 vessels between October 8th and December 31st 2017, and an additional 40 vessels between January 1 and April 30th 2018. Other cruise lines such as Princess, Holland America, Aida, Costa, MSC, Viking, Thompson Cruises, P&O and Celebrity have not cancelled calls and have scheduled their vessels to include St. Kitts as a port of call on existing or revised itineraries over the coming months. It is important to note that Royal Caribbean has not scheduled any Oasis class vessels until mid to late November on itineraries including St. Kitts.
The St. Kitts Tourism Authority Cruise Ship Schedule will be updated accordingly to reflect the changes upon receipt of notifications from cruise lines. There will be additional calls from various cruise line vessels. Therefore, a net increase in the number of projected ship calls to island is expected for the 2017-2018 season. An estimated 115 vessels up from 96 are scheduled to visit St. Kitts from October 7 to December 31st, a net increase of 19.
Stakeholders are advised changes may occur and the St. Kitts Tourism Authority will provide updates as soon as information becomes available.
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Increase in tourist arrivals and accommodation expansion – Saint Lucia growing from strength to strength in 2017 Thursday 12th October, 2017 – St. Lucia News Online
Saint Lucia has recorded strong and steady growth in its tourism sector, so far for 2017.
Year to date Saint Lucia has recorded an increase of 94,432 visitor arrivals, representing 14.5% growth over 2016. Stay over arrivals as of August 2017 are up 9% and cruise arrivals are 21% above the previous year.
The cruise sector has continued to show very strong growth and this is expected to significantly increase when construction is competed on a new berth at the end of the year. This expansion will allow Saint Lucia to accommodate Quantum class vessels with passenger capacities of above 4900 per port call.
Saint Lucia Open for Business
Having thankfully been spared from the recent hurricanes, our tourism industry continues to operate as normal. Importantly, the Saint Lucia Tourism Authority has partnered with key public and private sector agencies to provide assistance to our sister islands in need. One initiative worthy of note is the Saint Lucia Hotel and Tourism Association’s establishment of the Tourism Employee Relief Fund (TERF) for the medium term assistance of displaced tourism workers.
Growing Accommodation Offerings
Saint Lucia’s tourism sector is poised to undergo significant expansion within the next few years. Due to several major hotel projects, the island’s tourism room stock is to increase by 2000 rooms over the next 4 years thereby creating more variety in the accommodation offering. Already for this year, the Royalton Saint Lucia Resort and Spa has opened its doors with 455 rooms in two hotels one catering to families and the other, adults only. Serenity Villas at Coconut Bay Resort, has also unveiled its 36 luxury villas and the Harbour Club is to open in December with 117 waterfront/marina rooms.
Work commenced on the Fairmont Saint Lucia Resort in Sabwisha, Choiseul in September this year. This resort will be a unique space that integrates local nature, a low-rise building complex and a wide range of recreational facilities. The hotel will include 120-five-star hotel rooms, 37 villas, 3 restaurants, a spa, commercial areas for local producers and traders and 3 swimming pools. A special central place within the development will be dedicated for local tradition with several of shops for carvings and paintings.
The Reduit beach will be redeveloped and will become the home of a luxury five-star dual branded hotel called Curio by Hilton. This property will be built where the Rex Resorts was previously located. The Curio by Hilton will feature 500 luxury rooms; 350 rooms assigned to the Hilton and 150 assigned to the Curio by Hilton. Work on this property will begin within the last quarter of 2017.
Work should commence on the Honeymoon Bay Resort in Cannelles very soon. This resort will consist of two hotels; the first is a 250 room 5-star luxury, family all-inclusive hotel and the second is an 80 room, 5-star luxury hotel. This resort will feature an 18-hole golf course and clubhouse and a museum.
The Range Developments signed an agreement with the Government of Saint Lucia to acquire the Black Bay lands and develop Black Bay into an integrated master planned luxury touristic community. The Black Bay Master Development will consist of a Ritz Carlton branded hotel and villas with other amenities set on 180 acres on the southern tip of the island. The hotel is expected to have 180 rooms and will be the central anchor of the Black Bay Master Development. Initial site works are expected to commence in the fourth of quarter of 2017 or the first quarter of 2018 and the hotel is expected to be complete by the end of 2020.
Sandals Resorts International has confirmed plans to add a fourth resort on Saint Lucia. The property will offer 350 rooms and suites inclusive of the exotic Sky Pool Butler Suites, all-butler signature swim-up Rondoval Suites and an infinity-edge sky pool bar. Ground-breaking for the project is set to begin in 2018.
Negotiations are nearing closure with AM Resorts on the development of two of its brands – a 250 room Secrets Resorts and Spa and another 250 room Dreams Resorts and Spa.
In addition to hotel developments, the island will create and capitalize on the concept of village tourism. Eight fishing villages will be transformed into unique tourism villages based on their attributes and strengths. These villages will be uniquely themed and development plans will be established in a participatory manner which address the villages’ infrastructure, culinary assets, architecture and capacity.
Winter is the time to say ‘I Do’
Lauded as the World’s Leading Honeymoon Destination for the ninth time this year, Saint Lucia boasts some of the finest wedding and honeymoon settings imaginable, providing a lifetime of cherished memories including:
• Beautiful Beaches – With over 30 stunning beaches throughout the island. Picture your wedding day set on a palm-fringed beach. • Cascading Waterfalls – A popular choice for younger couples and the more adventurous types, the backdrop of the waterfall speaks for itself and depicts the uniqueness of the island.
• Historical Parks – The cultural history of Saint Lucia provides a fabulous rustic back drop to any wedding, stunning scenes amongst ruins of naval forts, sugar plantations, and cocoa plantations to name a few.
• Mountain Tops – The Piton Mountains in Soufriere offer a breath-taking backdrop for your wedding.
• Botanical Gardens – Tropical island scents and home to special flora and fauna, Saint Lucia’s botanical gardens are ideal settings for a beautiful wedding.
The island’s wedding coordinators can also recommend one of many private garden locations and hotel properties to provide the perfect setting for a destination wedding.
Soleil Saint Lucia Summer Festival
In 2017, Saint Lucia has launched an ambitious initiative – a Summer of Festivals – aimed at bringing tangible and lasting economic, social and cultural benefits to the country and its people. The Festival builds on Saint Lucia’s outstanding artistic talent and rich cultural heritage and on its experience in designing and hosting unique events and celebrations:
• Food & Rum Festival – a gastronomic event to attract the best chefs, wine connoisseurs, rum fanatics and food critiques from the Caribbean and internationally.
• The Saint Lucia Jazz Festival – Caribbean and international jazz music, an eclectic mix of renowned and up and coming talent, with indoor concerts, dinner sets, and outdoor, open air events
• Roots & Soul – A festival dedicated to musicians who are setting new trends in reggae, conscious hip-hop, Afro-punk and R&B.
• Saint Lucia Carnival – Pumping rhythms, sexy costumes and the people dancing under the warm Caribbean sun; welcome to Saint Lucia Carnival.
• Country & Blues – Influenced by African roots, the Blues tells of a rich, powerful history of people and created one of the most influential genres of popular music.
• Arts & Heritage Festival – Building on the celebration of Creole Day, which began in Saint Lucia in 1981, this month-long Festival is a celebration of the richness and diversity of Saint Lucia’s cultural, ethnic and artistic heritage.
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Saint Lucia receives almost US$3 million from CDB’s poverty reduction programme BNTF 9 Thursday 12th October, 2017 – St. Lucia news Online
The BNTF Programme, CDB’s flagship programme for poverty reduction, has contributed significantly to national development in St. Lucia since it commenced operations on the island in 1979.
In-keeping with the theme ‘Partnering Against Poverty’ the implementing agency for the BNTF programme, the Saint Lucia, Social Development Fund (SSDF) held an opening ceremony on Wednesday October 4th, 2017 at the Golden Palm Resort Rodney Bay to Launch the BNTF 9 Programme.
Saint Lucia received an initial grant allocation of US$2.97million dollars.
George Yearwood is the Caribbean Development Bank Portfolio Manager (Ag): “After extensive discussions CDB has negotiated for the Special Development Fund (SDF) to secure grant resources for a more nimble BNTF 9 programme, with a yet more ambitious agenda for tackling poverty in the region. Countries in the region stand to benefit from a grant allocation of US$40.8 million dollars, of which Saint Lucia receives US$2.97million Dollars. And a portion of an unallocated amount of US$5.2 million dollars to be distributed at midterm based on project performance.”
Minister for Equity, Social Justice, Empowerment, Youth Development, Sports, Culture and local Government Hon. Leonard Montoute expressed his gratitude to the Caribbean Development Bank for their continued support: “I am not aware of any donor funded programme that has spawn so many cycles of almost 4 decades of BNTF. The support that we have received here in Saint Lucia is very rare and so I would like to thank the Caribbean Development Bank (CDB) for their continued support and commitment in assisting our poor and vulnerable. I have no doubt that this will be reflected in this new Cycle.”
The Basic Needs Trust Fund (BNTF) Programme has been contributing to poverty reduction in Saint Lucia by providing infrastructure and livelihood enhancement services.
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Cudjoe says expect bumper cruise season in 2018 Monday 16th October, 2017 – Trinidad and Tobago Guardian
Renewed efforts by the Ministry of Tourism to showcase T&T as an ideal travel destination is already reaping success as the 2017/2018 cruise season promises to be a bumper one with 71 calls scheduled to put into port.
Officially declaring the season open yesterday as she welcomed the early-morning arrival of 3,756 passengers aboard the Caribbean Princess in Port-of-Spain, Tourism Minister Shamfa Cudjoe said despite the recent destruction wrought by Hurricanes Irma and Maria, all was not lost.
She declared, "Cruise tourism is still alive and kicking in the Caribbean, all is not lost and we are open for business."
Cudjoe added, "Not just a handful of islands in the Caribbean, but 70 per cent of our territories are still open for business."
With rebuilding efforts underway in islands such as Dominica, Turks and Caicos, Montserrat, and St. Kitts and Nevis, Cudjoe reinforced that tourism was the backbone of many Caribbean nations as she quoted recent sentiments by chairman of the Caribbean Tourism Organisation, Hugh Riley who said, "If you want to help the Caribbean, you should travel to the Caribbean."
Cudjoe described the cruise industry as the fastest growing segment of worldwide leisure travel, having experienced an average passenger growth rate of seven per cent per annum since 1980. She said for the period January to June 2017, Caribbean cruise arrivals stood at 15.3 million, which was a four per cent increase for the corresponding period in 2016.
Admitting the recent natural disasters had, "Put a damper on this year's cruise season," Cudjoe said it had also managed to bring the region closer as governments and people worked together to rebuild and promote the viability of the Caribbean brand.
She said T&T had originally been scheduled to receive 47 calls - 23 in Trinidad and 24 in Tobago - but negotiations by local shipping stakeholders had resulted in an additional 24 calls being added to the books, with 23 in Tobago and one in Trinidad.
The 71 calls from vessels operating Seabourne Cruise Lines, Carnival UK, TUI Cruises, Fred Olsen Cruises, Thomson Cruises and Princess Cruises among others, is expected to generate passenger arrivals of approximately 60,958 in Trinidad and 75,451 in Tobago.
Providing a taste of T&T's local culture and culinary delights for visitors yesterday, Cudjoe promised, "We want to wow our guests from the moment they arrive so that they return again and again."
Passengers were able to sample treats from The Lopinot Chocolate Co, doubles and coconut water as they danced to the steelpan music of the Caribbean Airlines Invaders.
Cudjoe expressed delight after speaking with one of the visitors who said it was his 85th cruise to the Caribbean and 39th to T&T, but the welcome, "Had been the best he ever received."
The minister said over 20 visitor guides were trained and would be strategically stationed around the capital as vessels put into port over the next few weeks.
She said efforts were also being made to secure translators as persons from as far away as Germany and Italy were expected.
Efforts afoot to restore T&T’s glory days
Commenting on the opening of the 2018 cruise season, chief executive officer of Carvalho’s Agencies, Charles Carvalho noted that steps were underway to bring back the allure of T&T as a cruise destination of choice in the region.
He said, “We are trying to make T&T what it was years ago.”
Carvalho added that in the 1970’s, Trinidad was the “mecca” of cruise shipping in the Caribbean.
He said: “People did not even know Barbados, St. Lucia and Grenada, they had known Trinidad.”
“Trinidad was a home port destination for ships going to South America but that has gone because other destinations developed faster than we could but we are trying to bring that back.”
Carvalho pointed out that they had redoubled efforts in recent weeks to encourage ships looking for ports of calls to come to T&T, following the hurricanes.
He said, “We went to them and said T&T has the space and we had some negotiation to make it happen, but many of them are on-board now.”
Captain of Caribbean Princess Marco Fortezze, who will celebrate his 55th birthday next month, agreed T&T had “something special” to offer to visitors.
Originating from Fort Lauderdale, Florida, the Caribbean Princess departed Trinidad at 5 pm yesterday, headed for Curacao.
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Scotiabank appoints new managing director Friday 13th October, 2017 – Trinidad and Tobago Guardian
Scotiabank has announced the appointment of Stephen Bagnarol as Managing Director of its operations in T&T, as well as Senior Vice-President and Head of the bank's Caribbean South and East operations.
The appointment will take effect November 1, 2017
In a statement yesterday, Brendan King, chairman, board of directors and senior vice-President of International Banking at Scotiabank said, "Stephen's extensive knowledge and experience leading teams and driving results position him well to lead our team in the Caribbean South and East."
Bagnarol's appointment follows the Bank's announcement on September 19th that Anya Schnoor, who held the position as managing director since 2012, has been promoted to the position of executive vice-president, retail payments, deposits, and unsecured lending for Canadian banking from November 1, 2017.
King added that Bagnarol would continue to develop and implement local business strategy for the region in alignment with the bank's strategy and risk appetite and in compliance with government and regulatory laws.
Bagnarol joined Scotiabank in 1998 and had his first international assignment in Mexico.
In 2005, he relocated to New York as Managing director, Derivatives and Capital markets.
In 2008, he was appointed to Senior Vice-President, Wholesale banking in Panama.
In 2011 Bagnarol was appointed to his current role as senior vice- president, Wholesale banking in Peru
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Unilever declines $4.07 Friday 13th October, 2017 – Trinidad and Tobago Guardian
Overall Market activity resulted from trading in 16 securities of which 2 advanced, 5 declined and 9 traded firm.
Trading activity on the First Tier Market registered a volume of 562,514 shares crossing the floor of the Exchange valued at $7,370,026.50.
Angostura's Holdings was the volume leader with 300,000 shares changing hands for a value of $4,500,040.00, followed by Trinidad Cement Limited with a volume of 81,873 shares being traded for $344,478.36.
Sagicor Financial Corporation contributed 67,500 shares with a value of $540,876.00, while GraceKennedy added 50,020 shares valued at $145,058.00.
NCB Financial Group registered the day's largest gain, increasing $0.05 to end the day at $5.30.
Conversely, Unilever Caribbean registered the day's largest decline, falling $4.07 to close at $41.95.
Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 3,500 shares valued at $75,180.00.
Clico Investment Fund declined by $0.02 to end at $21.48
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New agreement to access development assistance Monday 16th October, 2017 – Antigua Observer
Prime Minister Gaston Browne has signed the Agreement for Encouragement and Protection of Investment with the Director General of OPEC Fund for International Development (OFID), Suleiman Jasir Al- Herbish.
According to the prime minister, the signing of this agreement is important to the future development of Antigua and Barbuda as it places the twin island state in a position to gain financial assistance for development projects.
This agreement, signed on Friday, is also designed to assist in financing private sector activities in Antigua and Barbuda involving investors from OPEC member states and other developing nations.
The signing exercise occurred as the prime minister lead a high powered delegation to Washington to attend the IMF/World Bank annual meetings.
During a High Level Ministerial session, the prime minister, criticised the international banking system as he stressed that the vulnerability of small states has increased because the international payment system is controlled by the developed countries and they have set up artificial impediments that undermine the development of small states.
He referred to the recent wide spread destruction of several Caribbean territories by Category 5 hurricanes as he emphasised the impact of those hurricanes, challenges faced in the rebuilding effort, and the need for building resilience.
“Correspondent Banking is a global public good and should be available to all countries and all regions,” the prime minister stressed.
He elaborated that banking relations “is a fundamental human right that is just as important as the provision of other basic services such as water, electricity and broadband services”.
He told the high-level audience that “the socio-economic impact of de- risking is more severe than any hurricane.
“We are being de-banked from the international payment system,” the PM charged. “The provision of correspondent banking service cannot be seen exclusively through the lens of risk and profitability.”
His statements were widely supported by leaders of other small states from Africa, the Caribbean and the Pacific as well as representatives of international agencies, attending the meeting, which was also graced by the presence of the World Bank President, Deputy UN Secretary General, Sir Richard Branson and a number of donors.
Several delegations at the forum called on the Antigua and Barbuda prime minister to set up a proposal, which could tackle the perceived problems in a global way. In response, he has recommended the establishment of a “high-level working group on De-risking and Developmental Funding for Small Island States.”
Prime Minster Browne also met with the World Bank Regional Director for the Caribbean, Tahseen Sayed and held discussions on the rebuilding programme on Barbuda and the Antigua and Barbuda economy.
On the margins of the High Level Ministerial event, Senator Lennox Weston held a similar meeting with the Secretary General of the Commonwealth Baroness Patricia Scotland.
On Saturday, the prime minister joined his regional colleagues and other leaders at a Small States Forum to discuss Climate Change, the recent destruction caused by hurricanes, and the eligibility criteria for the Caribbean for development assistance among other things.
The prime minister returned to the state yesterday. He was accompanied on his busy weekend trip to Washington by Minister of State in the Ministry of Finance and Corporate Governance, Senator Lennox Weston; Ambassador Sir Ronald Sanders; Financial Secretary Whitfield Harris and Deputy Financial Secretary Rasona Davis-Crump.
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Hello new Barbuda Saturday 14th October, 2017 – Antigua Observer
A Chinese firm has shown interest in establishing a new town on Barbuda, the government has announced.
This was revealed on Thursday by government’s chief of staff, Lionel Hurst, in his weekly post-Cabinet statement.
The firm, which was not identified by name, reportedly has expertise in energy and housing and had been invited to brief the Cabinet by the Minister of Works and Housing Eustace “Teco” Lake.
“They proposed to construct a complex of several high-rise apartment buildings that could resist hurricane winds exceeding 200 miles per hour,” the statement read.
The release added that the complex would include a supermarket, cleaners, a drug store, a restaurant, a movie theatre, clothing stores, a church, car parks and other kinds of amenities that are common to new complexes.
“The team agreed to return in a week with prices,” and according to the statement, “assured the Cabinet that it could arrange financing that is low cost, and living spaces that would also be within the reach of families with limited means”.
The revelation is yet another indication that the plans for the island are a far cry from what existed prior to the devastation wreaked by Hurricane Irma on September 5. Barbuda Representative and Agriculture Minister, Arthur Nibbs, last week told his regional counterparts that the government planned to establish an agro-industrial complex on a rebuilt Barbuda.
Nibbs painted a picture of a modern agricultural sector that employs sustainable use of the island’s natural resources while luring investors with attractive terms.
But financing this re-imagined Barbuda could put paid to the dreams of the government. According to Nibbs, they plan to adopt “a blended approach” to secure the resources in both cash and in kind from the Barbuda recovery fund, private investors, bilateral assistance from friendly governments, and development partners and donor agencies.
So far the government has secured less than half of a US $50-million target in relief aid from friendly governments and organisations. Reconstruction of Barbuda’s public infrastructure alone has been pegged at upwards of US $200 million.
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Cost of citizenship cut in half – Visa-free loss coming back to haunt? Friday 13th October, 2017 – Antigua Observer
The loss of visa-free access to Canada continues to haunt Antigua and Barbuda, according to the Citizenship by Investment Unit (CIU). This is what eventually led to the need to slash the cost of citizenship by half.
Prime Minister Gaston Browne announced in Parliament on Thursday that citizenship under the National Development Fund (NDF) will soon be sold for U.S. $100,000.
OBSERVER media asked a CIU representative why the reduction was necessary. She replied that visa-free access to Canada was “the country’s most compelling advantage” and that since its rescission, investors are “forced to make a decision purely based on price.”
Meanwhile, Harold Lovell, Political Leader of the United Progressive Party (UPP) has again argued the programme should be halted and rebranded.
“Look at the areas where you’ve made mistakes and do everything possible to regain visa-free access to Canada,” he said adding, “We will soon hear that they are selling citizenship for U.S. $20,000. What will we say then? It will be the destruction of the programme.”
Lovell has said the loss of visa free access to Canada was “because of reckless actions by the government” that put the CIP “in dire straits.”
Currently, the lowest price for Antigua and Barbuda’s citizenship through the Citizenship by Investment Programme (CIP) is the U.S. $200,000 asked for under the CIP’s NDF with additional diligence and processing fees. Grenada is the only other Caribbean island selling citizenship at U.S. $200,000 in addition to fees.
The CIU representative stated that “the market has determined that the most attractive amount is U.S. $100,000” and this is evidenced by a staggering 95 percent decline in NDF applications.
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FHC, Oppenheimer facilitate access to global capital markets Friday 13th October, 2017 – The Gleaner
The Kingston-based FHC Investments Limited (FHCIL), a subsidiary of First Heritage Credit Union, has entered a partnership with New York-based Oppenheimer Asset Management Inc. which provides a range of services to banks and high net worth individuals.
FHCIL confirmed the relationship during its investor forum at the Courtyard Marriott Hotel in New Kingston recently.
FHC Chief Executive Officer Roxann Linton put the new relationship in the context of her organization’s programme to facilitate portfolio diversification beyond national borders on behalf of the FHCIL clientele.
"An investment in knowledge pays the best interest,” she said, arguing that the partnership with Oppenheimer will strategically enable FHCIL to offer an expanded menu of global investments.
“Oppenheimer is a reputable, well-established brokerage in the USA whose services include offering their clients from all over the globe world- class investment research, and the efficient and speedy settlement of transactions,” Linton said.
She also highlighted the timing of the intervention, noting the policy uncertainties arising from the various political elections in Europe and the new and unconventional US presidency of Donald Trump.
Add to that the volatility in the international oil markets and you have an interesting cocktail of conditions which are not exactly conducive to fairer weather in the investment climate, she said.
The effects of at least some of these factors are bound to have a continued impact on the investment momentum going into 2018, Linton said.
For Oppenheimer’s chief investment strategist, John Stoltzfus, however, the outlook is optimistic.
“We now have some significant momentum. We also see opportunities in European stocks, in Asia, Latin America and elsewhere around the world as we go forward and the economic recovery continues. The wonderful thing about it is that in the many trends around the world that are very positive much of it has nothing to do with politics,” he said.
Stoltzfus argued that gains were primarily driven by technology because it has become ubiquitous.
On September 19, 2011 FHC became the first Jamaican credit union to offer alternative financial support services through a subsidiary after FHCIL was licensed by the Financial Services Commission.
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PCJ exploring offshore wind farm Sunday 15th October, 2017 – The Gleaner
Petroleum Corporation of Jamaica (PCJ) has got foreign backing for a prefeasibility study on the prospect of setting up another wind farm, but one that would be anchored out at sea.
An American outfit called Keystone Engineering Inc. has been invited to do the study, which PCJ Group General Manager Winston Watson indicated should be finalised by around December 2018.
The study for the offshore wind farm is being financed by a grant from the US Trade and Development Agency (USTDA).
"Preliminary work should begin during the final quarter of 2017 and the study is scheduled to last for 12 months," said Watson. "The results of the study will give an indication of the cost and viability of developing an offshore wind farm for Jamaica," he told Gleaner Business.
The study is expected to evaluate the viability of installing the wind farm, which would represent one of the first offshore wind installations in Jamaica and the greater Caribbean region.
USTDA links US businesses to export opportunities by funding project- planning activities, pilot projects, and reverse trade missions. The US agency said in a release on the project that the development of the wind farm offers potential export opportunities for a range of American equipment and services related to the design, development, and operation of offshore wind power generation and transmission infrastructure.
Keystone is a Louisiana-based energy firm specialising in the engineering, design, procurement, project management and construction support for offshore wind and oil and gas platforms. The company was the foundation design-engineer for the first offshore wind farm installed in the United States, the 30 MW Block Island Wind Farm off the coast of Rhode Island, USTDA noted.
Watson told Gleaner Business that it was the US agency that approached the PCJ about overseeing the implementation of a grant-funded feasibility study on the prospective offshore wind farm.
He did not indicate the size of the grant, who would develop the facility, nor what the plans were beyond the study.
"At this point it is still too early to comment on the ownership or operational arrangements for any future projects that might be implemented as a result of the study," the PCJ boss said.
The PCJ currently owns and operates the Wigton wind farm, based at Rose Hill in Manchester. The facility, first established in 2004 and expanded over time, now has generating capacity of nearly 63 MW. Wigton's total output is now 164,775 MWh per year. It accounts for 6.2 per cent of installed capacity on the national power grid, and 3.7 per cent of Jamaica's electricity generation
Wigton sells the electricity it generates to the Jamaica Public Service Company, operator of the national grid.
As for the offshore farm, Watson said it was possible the facility could feed both local energy needs and exports.
"It is anticipated that any facilities that may result will provide energy for domestic usage," he added.
In the USTDA release, Watson was quoted as saying the study would "help the PCJ to get valuable data that can attract overseas investment for the development of our offshore wind resources".
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IMF u-turn on economy Sunday 15th October, 2017 – Nation News
Government’s most recent austerity measures have prompted the International Monetary Fund (IMF) to reverse its growth projections for the Barbados economy.
Not only has the IMF revised downward its forecast for economic growth in Barbados this year, but it is even more pessimistic about the economy’s prospects in general election year 2018.
The same goes for the financial institution’s prediction about consumer prices here. It expects inflation to escalate by the end of the year and worsen next year because of the fiscal measures introduced in the May 30 Budget.
The IMF officially made the revision in its latest World Economic Outlook (WEO), released during last week’s annual meetings which also involved the World Bank. (SC)
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Carnival cruise liner drops out Friday 13th October, 2017 – Nation News
Hundreds of Barbadians booked to cruise on the Carnival Fascination for the next three months have had their plans smashed.
Carnival Cruise Line yesterday announced the cancellation of all Carnival Fascination cruises from October 15 through January 28, 2015.
The e-mail from the cruise line sent shock waves through the local travel agency business yesterday, stating in part:
“We are writing today to let you know that we have been asked by the Federal Emergency Management Agency (FEMA) to support the relief and rebuilding efforts and Carnival Fascination has been chartered to provide housing for relief workers in the US Virgin Islands. This means the ship’s departures from October 15, 2017 through January 28, 2018 will be cancelled.”
The cruise line advised travel agents their clients would “receive a full refund of their cruise fare, as well as air purchased through our Fly2Fun programme, pre-purchased shore excursions, beverage packages and Fun Shop items”.
Director of cruise at the Barbados Tourism Marketing Inc., Cheryl Franklyn, described Carnival’s decision “to lend the Fascination to the rebuilding effort “as honourable.
She said that given Barbados’ “very strong” cruise performance to date, “we are still in a position of growth over last year and we should still end 2017 well ahead of 2016”.
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Tourism arrivals, bookings up with US market key Friday 13th October, 2017 – Barbados Today
Barbados’ tourism officials are reporting a promising tourism performance for the first eight months of this year.
Chairman of the Tourism Development Corporation (TDC) Martin Ince told the 30th annual general meeting and luncheon at the Accra Beach Resort, Rockley, Christ Church on Thursday that figures for January to August show long-stay visitor arrivals up by 7.4 per cent.
“[This is] being driven by the United States market, up 16 per cent and Canada, 12 per cent. The UK market this year was flat so far,” Ince reported.
However, the tourism executive noted that in spite of flat performance of the British market so far, the United Kingdom remained this country’s major source for long-stay visitors.
He also revealed there was a 20 per cent year-on-year rise in cruise arrivals for the first eight months.
“Certainly, the winter season will be a very busy one. The airlines are seeing solid bookings. From all reports, the forward bookings are strong,” he said, crediting the TDC for its role in the achieving the increases.
Despite the positive news, the TDC official said the non-profit body, which helps to maintain some tourism related infrastructure, was not happy that contributors had lost some of the tax concessions once granted.
Ince said the TDC deserved greater attention from Government because of its contribution to the growth of tourism.
“We have been lobbying the ministries of finance and tourism for the last two years. We used to get a 150 per cent tax incentive for any contributions made to the TDC and that was reduced to 100 per cent about two years ago.
“We have lobbied to have this reinstated. So I am appealing to the Ministers of Finance and Tourism to please relook reinstating this. The TDC is providing key funding and we are taking pressure from the tourism funding bodies in Barbados,” the TDC chairman contended.
“The TDC is providing critical funding for the tourism product in Barbados. We are working very closely with the [Barbados Tourism Marketing Inc.], the [Barbados Hotel and Tourism Association] and the [Barbados Tourism Product Authority] in many, many initiatives,” Ince said.
At the same time, Ince told tourism stakeholders they must continue to raise the bar and reject mediocrity. He called on partners to ensure the country remained world-class.
The meeting was also addressed by representatives from several organizations which benefited from TDC financing and who touted the contributions it has made to tourism revenues.
The presenters included Andre Miller of the Barbados Dive Fest, Barney Gibbs of Enterprise Sea View, Palms on the Highway and the Bridgetown Lamp Refurbishment project, Cicely Walcott of the World Flower arranging show and Mark St Hill of the Barbados Hockey Festival and Hockey Astroturf.
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GuySuCo to slash workforce by 7,000 Saturday 14th October, 2017 – Kaieteur News
Cash-strapped Guyana Sugar Corporation (GuySuCo) is already letting go of staffers from two estates that it will close before the year is out. Amidst worry by sugar workers, GuySuCo officials yesterday confirmed that 1,500 could be let go from Rose Hall and the East Demerara estates by the end of the crop. The industry has 17,000 workers. It wants to reduce that by at least 5,500 more, a total of 7,000 – to finish at 10,000.
This past week alone, 300 staffers were affected between the two, it was disclosed yesterday.
The state-owned sugar company is also planning to use the remaining three estates – Blairmont and Albion in Berbice and Uitvlugt, West Demerara – to produce up to 150,000 tonnes of sugar, come 2020.
The remaining three estates – Enmore (East Demerara) and Rose Hall and Skeldon (East Berbice) will be up for offers of divestment and privatization.
The 150,000-tonne target from the three estates will be similar to the lowly 150,000-160,000 tonnes that is being announced for this year.
The disclosures of making GuySuCo profitable or “cash positive” in three years were made yesterday during a press conference by senior officials at the National Communications Network studios, Homestretch Avenue.
With Wales Estate, West Bank Demerara, closed last December as part of the re-organisation of the sugar industry, which has been struggling badly to stay alive, the questions of what is happening at Rose Hall and Enmore, two factories earmarked to be closed, have been up in the air.
Present at the press conference yesterday were Finance Director and Deputy Chief Executive Officer (CEO), Paul Bhim; Gavin Ramnarain, Head of the Agricultural Research Department; Yusuf Abdul, Technical Services Manager; Deodat Sukhu, Chief Industrial Relations Manager, and Audreyanna Thomas, Senior Public Relations Officer.
With some protected markets in the region, a re-organised, lean-and- mean GuySuCo, minus its troubled new kid-on-the-block, Skeldon, will be targeting CARICOM for higher prices, through value-added packaged sugar and what is known as ‘plantation white sugar’- a lesser quality of refined sugar.
Rose Hall is confirmed to be close this year-end, GuySuCo said yesterday.
GuySuCo is facing major problems, with little answers now, and is $82B in debt. It is producing at high of US$0.42 cents per pound but selling at a massive loss, at US$0.17.
The government has given and committed $21B to GuySuco for the past 12 months, a situation that is angering taxpayers, but defended by the sugar unions, whose existence is under threat.
At Wales Estate, 200 acres of rice was planted under a $200M diversification project, and funded by the Guyana Rice Development Board. The project fell short of the 35 bags-per-acre target, with 28 bags recorded. Already, a special purpose unit has been established and has invited expressions of interest for Wales, Skeldon, Rose Hall and Enmore estates.
At the Albion Estate, GuySuCo will focus on bulk sugar, plantation white sugar, co-generation, and molasses. Production of bagged and packaged sugar will be done at Blairmont while at Uitvlugt Estate, GuySuCo will focus on bagged and plantation white sugar.
GuySuCo is also hoping to supply the local market, which consumes approximately 20,000 tons of bagged and packaged sugar yearly.
“In addition to that, we have a small US quota of about 13,000 tons…so we’re going to be satisfying that quota as well,” Bhim noted.
The corporation is also looking to move into new markets, particularly plantation white sugar which is a substitute for refined white sugar. There is potential at Uitvlugt Estate for increased sugarcane cultivation with private cane farmers, senior PRO Audreyanna Thomas noted.
GuySuCo is looking to tap into the Caribbean market for plantation white sugar. Bhim pointed out that the Caribbean Community (CARICOM) annually imports approximately 190,000 tons of refined white sugar. While 10% of refined sugar is used for manufacturing of food and beverages, “the rest could come from plantation white sugar”.
The sugar entity is collaborating with Jamaica and Belize, members of the Sugar Association of the Caribbean (SAC), to urge CARICOM governments to grant a Common External Tariff (CET).
“Where white sugar is coming in extra-regionally, some sort of a tariff will be imposed. We’re not sure as yet what percentage we’re looking at…in order to make our plantation white sugar competitive,” Bhim explained. To be competitive the tariff the sugar corporation is seeking has to be in the range of the charge attached to brown sugar, which is in the range of 30-40%.
The officials made it clear the GuySuCo as a business should be re- oriented to run as a profitable one.
Already, GuySuCo is targeting sugar-dependent communities to find out ways to ready them from the fallout of factories being closed.
Almost 500 workers have indicated they wanted training that GuySuCo was offering as part of the severance deal – from sewing, catering, masonry, electrical works and computer training.
According to Bhim, 70 percent of Guyana’s overseas market is in Europe, where prices have almost halved to just US$300 per tonne. With regards to Wales, another 285 acres will be put to more seed paddy.
Sukhu said that some 389 workers have received severance pay of over $338M. However, the official said, about 200 Wales workers are refusing to take up jobs at the Uitvlugt estate.
The officials made it clear yesterday that GuySuCo will be offering contracts of planting, transportation, and harvesting. There will even be contracts for uniforms.
According to Sukhu, the major problem facing GuySuCo is the number of strikes and protests by workers – one of the highest this part of the hemisphere.
At Skeldon, when divestment or privatization comes, almost 2,000 workers will have to be treated when the time comes, the officials said.
The reduction of the workforce, a bruising subject for the Opposition and a touchy one for Coalition Government, would see GuySuCo saving in about $5B-6B – the current wage bill is over $18B annually.
Recently, to rescue GuySuCo with monies to pay workers and other expenses, government agreed to buy some lands for housing. GuySuCo will be asking for more before year-end, Bhim admitted.
GuySuCo is targeting land sales to raise money for expansion and critical repairs to its aging factories.
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