20th January 2023

Financial regulators in Jamaica have issued enhanced oversight directives after massive employee fraud was allegedly uncovered at Stock and Securities Limited (SSL).

“The directions impose strict reporting requirements on the entity and prevent the entity from disposing of any assets. Based on the FSC directions, SSL is barred from issuing funds to clients or accepting new deposits until permitted by the FSC,” reported the Jamaica Observer.

The move comes after an initial internal investigation by the popular investment firm unearthed irregularities believed to be fraud by at least one now former employee.

SSL said that it referred its findings to the relevant law enforcement authorities “to facilitate a thorough and complete examination of all aspects of the matter,” adding that the company would cooperate fully with the investigation and “ensure that the responsible party faces the full consequence of the law”.

“To ensure this, we have taken steps to secure those assets and strengthened internal protocols to detect suspicious activity in the shortest time possible,” said SSL in a press release.

According to some reports, a wealth advisor in the company is the focus of the investigation after she allegedly siphoned off money from investors’ accounts. She has reportedly been under investigation since August 2022, with SSL allegedly initially trying to resolve the matter internally before discovering the scale of the fraud.

While the exact value of the scheme is not known, the Jamaica Gleaner reported that more than US$10mn was missing from the accounts of more than 20 high-value clients including retired sprint legend Usain Bolt.

The article cast doubt about whether the fraud was a one-person job. “A single individual could not have done this. The skill set and knowledge required were immense,” a source told the newspaper, adding that “the complexity of the scheme included the bypassing of controls through forgery, manipulation of SSL’s IT systems and email addresses, and interception of disbursements for accounts in commercial banks”.

Usain Bolt’s Manager said that the Olympic 100 metre word record holder had been receiving what now appears to be fraudulent statements from SSL on his reported US$12.7mn investments with the company showing that his portfolio was intact. In a letter to SSL, Bolt’s attorneys confirmed that he lost over US$12mn in stocks and bonds to the fraud. The letter gave the company 10 days to return the money in order to avoid civil and criminal proceedings.

There was speculation that Prime Minister Andrew Holness may have been affected given comments in 2016 about using fund from his accounts at SSL to purchase land on which his house is now built.  The Gleaner reported that his declaration of income and assets for 2020 lists securities valued at JM$16mn (US$104,746), but it is unclear as to whether he still maintains accounts with the company.

SSL has issued a statement directly to its clients informing them that only a small percentage of accounts had been affected by the fraud and that those affected would be contacted individually. “We understand that you are anxious to receive more information and assure you that we are closely monitoring the matter,” said the communication.

The FSC, which is the country’s regulator of non-deposit taking financial institutions, initially appointed Kenneth Tomlinson of Business Recovery Services Limited as special auditor to examine SSL’s operations, before widening his role to temporary manager, as the regulator moved to assume control of the company.

The company is no stranger to being in the crosshairs of the regulator. In 2013, the FSC revealed that it had limited some activities of SSL following the approved sale of the company’s repo business to JN Fund Managers earlier in that year. In 2020, the Jamaica Observer reported that the regulator prevented SSL from accepting new investments from customers as punishment for what the FSC called “unsafe and unsound” practices. The company said that they were being addressed and that it had nothing to hide.

With the use of investment companies and money managers becoming more commonplace in Jamaican society, some analysts are contending that news of the fraud may increase investor hesitancy and ultimately bode well for deposit-taking financial institutions like banks and credit unions.

In 2019, a report from the Bank of Jamaica, FSC and the Financial Investigations Division put the asset base for the securities dealers sector at JM$650.6bn (US$4.3bn) with funds under management for the 39 licensees at the time totalling JM$1.9tn (US$12.4bn).

Photo by: nationwideradiojm.com

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

6th January 2023

Trinidad-based regional conglomerate Massy Group has spent big on three major new acquisitions during the final month of 2022.

During December 2022, different segments in the Group announced that they had entered into agreements to purchase Air Liquide International in Trinidad and Tobago, IGL (St Lucia) IBC Ltd. in Jamaica and Rowe’s IGA in the US.

Massy, which has five main operating segments which include retail, gas products, motor and machines, financial services, and real estate, appears to be focusing on expansion of the gas and retail arms.

Early in December, Caribbean Insight reported on Massy Gas Products Holding Ltd.’s (MGPHL) agreement to acquire the operations of French company Air Liquide International (ALI) in Trinidad and Tobago.

The deal, which is expected to cost Massy between US$51.5mn and US$58mn will see the company acquire 100% shareholding in Air Liquide; commercial manufacturer and supplier of oxygen, nitrogen, and argon gases. This first deal is expected to grow group profit by about 3% and assets by 11%, while the gas products portfolio will see an increase of pre-tax profit of approximately 14%.

Days later, Massy Holdings announced its second major acquisition. Through its American subsidiary, Massy Stores (USA) LLC., the company had acquired US grocery store chain Rowe’s IGA Supermarket for US$47mn.

“Massy Stores USA entered into a membership interest purchase agreement with the sole owner of Rowe’s IGA, Robert A Rowe, to purchase 100 per cent of the equity interest of each of the seven limited liability companies within the Rowe’s IGA Group,” said a notice on the Trinidad and Tobago Stock Exchange, adding that the deal was completed on 12 December 2022.

The acquisition represents a 1% increase in Massy Group’s assets and is expected to contribute to an increase in pre-tax profit of approximately 4%.

“The acquisition of Rowe’s IGA, an independent supermarket chain with seven stores in Jacksonville, Florida, is aligned with the Massy integrated retail portfolio’s strategy to expand its retail footprint in the US market. Rowe’s IGA was established in 2005 and is a well-recognised brand within the Jacksonville area,” said the company.

To round off a busy December, MGPHL announced that it has signed a share purchase agreement with Caribbean Petroleum Marketing Ltd for the acquisition of the 100% stake in IGL (St Lucia) IBC Ltd which operates in Jamaica for US$140.3mn.

A release from the Trinidad and Tobago Stock Exchange said that the acquisition will increase the Massy Group’s assets and profit by 7.3% and 7.1%, respectively, while the gas portfolio’s pre-tax profit is anticipated to jump by 30%.

IGL has operated in Jamaica for over 60 years in the business of liquefied petroleum gas (LPG) distribution, and manufacturing and distribution of industrial medical gases. The company recently commissioned a new US$0.66mn Pressure Swing Absorption Oxygen Plant in Jamaica which will increase production capacity of medical-grade oxygen by over 40%, allowing IGL to become an exporter. Plans are also reportedly in train to develop a carbon dioxide plant that would capture CO2 from the atmosphere to produce food-grade carbon dioxide for local drink manufacturers.

Massy is already in the business of gas in Jamaica through Massy Gas Products (Jamaica) Limited, which distributes the GasPro brand including LPG, butane, commercial fuels, industrial chemicals, commercial lubricants, marine fuels, lubrication, petroleum products and propane to residential and commercial markets since 2006.

Massy Holdings has been in operation since 1923. For the year ending September 2022, the company posted profit of US$106.6mn and held assets of approximately US$1.9bn.

Photo by Dhruv Weaver 

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

16th December 2022

Regional insurance companies are warning the Caribbean to brace for insurance premium hikes beginning in 2023.

The issue is being raised by at least three insurance associations including Barbados, Jamaica and Trinidad and Tobago following talks with their reinsurers.

Reinsurance involves local or regional insurance companies having policies with reinsurance companies to reduce the risk associated with large pay-outs from insurance claims by having the reinsurers bear part of the risk.

President of the General Insurance Association of Barbados (GIAB), Randy Graham, said that insurance companies in Barbados and the wider region will have to pay between 15% and 30% more for reinsurance, after the US$55bn in claims paid out by reinsurance companies for damage caused by hurricanes in this year.

“Unfortunately, we are hearing these types of responses from the reinsurers all through the Caribbean. As far up as The Bahamas in the north, right back down to Guyana in the south, the reinsurers are giving us the same type of stories,” said Graham.

Speaking at a press briefing on insurance staged in Jamaica, Senior Managing Director of Reinsurance at AON Brokerage in Florida, Hugh Barbanell said that reinsurers are being faced with increased costs due to greater demands on their global portfolios wrought by catastrophic weather events from Trinidad to South Carolina in the US and even the June 2022 hailstorm in France.

“One large [reinsurance] company from Switzerland is reducing insurance on anything that is excess 20%. When a loss comes, they want to have smaller market share compared to their competitors. So, that is their first move and also heavy pressure on terms and conditions, reduced shares, and heavy increases on pricing,” said Barbanell on recent changes to the market, while cautioning that it was a global issue and not just one being faced in the Caribbean.

“Other companies like Everest are sticking to the people they do business with today. They will not do business with any additional companies… Scor is reducing their proportion of business in the Caribbean by about 20% plus large reductions in commission terms,” he added.

“So, what the reinsurers are saying to us is that they have had to pay out over US$55bn in claims from these hurricanes and so some of their inputs have to go up. For insurance companies in the Caribbean, the biggest part of our expenses is buying reinsurance. So, if the reinsurance costs are going up by 15% to 30% in the Caribbean, then a lot of that is going to be a direct expense onto the insurance companies,” lamented GIAB’s Graham.

Similarly, the Association of Trinidad and Tobago Insurance Companies (ATTIC) has said that its member insurance companies are bracing for a hardening reinsurance market, which will result in double-digit increases in their reinsurance costs in 2023, as they pursue discussions with their brokers and reinsurers on renewal terms and capacity for their 2023 programmes.

ATTIC warned that based on current feedback, several Caribbean insurers are facing the combined possibilities of their current reinsurance programmes not being fully supported, hardening of the renewal terms and increases in their costs more than 15% higher than 2022’s. “This will undoubtedly have an adverse impact on the future sustainability and survival of some insurers if they are unable to recover those increased costs,” cautioned the Association.

The fear is that most of the increase in reinsurance cost will be passed on to the end consumer purchasing home, vehicular or other insurance in the form of higher insurance premiums.

“We are now facing a property insurance market with higher premiums. In addition, persons may not be able to afford insurance they require and, in some cases, they will not be able to get it because there’s absolutely no capacity,” lamented President of the Insurance Association of Jamaica (IAJ), Sharon Donaldson.

IAJ Director Peter Levy also expressed concern about the profitability of insurance companies. “The insurers are going to have to struggle. In terms of margin, we’re likely to have increased risks to our balance sheets, higher than we are accustomed to because the cost of transferring that risk has just gone up and the customers are going to have to pay more for insurance and the brokers are going to have to also adjust their expectations as well,” he rationalised.

However, GIAB President Randy Graham, believes that not all of the increasing costs will be passed on to the consumer—at least in Barbados. “Given the issues of the cost of living in the Caribbean now being so high, we can’t pass on all of that to the clients. We are trying to find ways that are creative to balance it,” said Graham.

AON’s Barbanell called for cooperation within the industry to navigate the choppy waters. “In general, the market is going to have to expect reductions in their commissions, this cannot be done just by the insurance industry. All the players are gonna have to contribute to get pass this point in time,” he said.  

With climate change now causing more frequent and powerful natural disasters, there are worries that the coming years will see further hikes to reinsurance costs which could lead to premium increases thereby exacerbating the perennial problem of low insurance penetration in the Caribbean at a time when it is needed most.

Photo by Jungwoo Hong

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

2nd December 2022

The eyes of international financial regulators and investors are on Antigua and Barbuda and The Bahamas following the collapse of crypto giant FTX.

Up until recent weeks, FTX – a digital currency exchange platform where people can buy and sell digital assets – was the second largest cryptocurrency exchange globally worth US$32bn in January 2022.

FTX has now filed for bankruptcy in the US amidst a digital bank run caused by many investors pulling their money after the company failed to raise US$8bn to stave off liquidity concerns. 

Several international news outlets including the Wall Street Journal have reported that its founder Sam Bankman-Fried may have illegally taken and diverted some US$10bn in FTX customers’ funds.

While the focus has largely been on FTX’s operations in The Bahamas, it has recently been revealed that the parent company is in fact registered in Antigua and Barbuda.

Antigua News reported that FTX’s Directors on record were Jonathan Cheesman, then an executive with international financial giant HSBC, and local attorney Arthur Thomas, the country’s Ambassador to the Czech Republic. Thomas resigned as Chairman of the government-owned Caribbean Union Bank when news broke.

Prime Minister Gaston Browne was quick to exculpate the country from the global fallout. Browne said that FTX had no trading licence in Antigua and Barbuda, even though the company applied for one back in 2021.

“FTX was to operate out of Antigua but when they made their application in 2021, the regulators did not quite understand the business model and it was a one-man operation, so they never proceed[ed] to licence it. They asked for greater particulars,” said Prime Minister Browne, intimating that the country may have dodged a bullet.

“I have to say that our regulators would have exercised prudence and did not rush to register them…I had a meeting with the same Bankman who was reputed to be worth US$33bn at the time. He complained that the Antiguan regulators had not approved his license and that was the primary reason he established his operations in the Bahamas. I don’t interfere with regulatory business…but I did say to the chairman of the FSRC that he had raised the concern but that is as far as I went,” Browne reportedly said.

FTX moved its headquarters to The Bahamas in 2021. “Their dishevelled CEO Sam Bankman-Fried had adopted The Bahamas as his home and was flooding its community with money, courting government officials and locals alike,” wrote Forbes in a piece dissecting the company’s time in the country.

There are estimates that the company and its now former CEO bought up to US$300mn in real estate in the country. Reuters reported that FTX spent US$121mn on 19 separate New Providence properties in the 14 months after it set up operations in The Bahamas. The company also reportedly made over US$10mn in donations to community groups and charities in the country during 2021 alone.

Forbes reported that the country and the company’s workers appeared oblivious to allegations that FTX was “drowning in debt and had been allegedly sending billions in customer deposits to its trading arm, Alameda Research, to use for risky investments”.

As US regulators including the Securities and Exchange Commission (SEC) intensified probes of FTX’s collapse, the Securities Commission of The Bahamas (SCB) moved to take control of cryptocurrency assets held by a unit of the bankrupt exchange there.

“On 12 November 2022, under the authority of an order by the Supreme Court of The Bahamas, the commission determined urgent action to safeguard the digital assets of FDM for the benefit of its customers and creditors was needed, and directed the transfer of certain digital assets to a digital wallet controlled by the commission,” said SCB in a statement, adding that the order provides for reimbursement by FTX for “expenses reasonably incurred by the commission in connection with the regulatory action taken to safeguard the digital assets”.

Concerns over the implosion’s impact on the Bahamian economy were somewhat tempered when to the surprise of some analysts, international credit ratings agency Standard & Poor’s maintained the country’s current rating, saying that FTX’s demise will likely have “no material adverse impact”.

Meanwhile, the Tribune reported that Brian Simms of Lennox Paton, one of the joint provisional liquidators of Bahamian subsidiary FTX Digital Markets, has expressed concern that its assets were “at serious risk of being lost, stolen, or seized unless frozen by the US courts”.

Simms also warned that the company’s local creditors including its Bahamian staff and goods and services suppliers are unlikely to recover 100% of what is owed to them, given the competition for its assets in liquidation proceedings and challenges in their recovery.  

The collapse has inevitably put focus on the Digital Assets and Registered Exchanges (DARE) Act which was passed in 2020 to provide the regulatory framework for cryptocurrencies, exchanges, wallet services and Initial Coin Offerings (ICOs).  FTX’s new CEO John Ray said that “faulty regulation” caused the failure. While Bahamian regulators and the Government have dismissed this criticism, it is difficult to argue that the country’s massive bet on crypto and FTX is going exactly to plan.

Photo by Mitchell Griest

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

18th November 2022

Despite limited progress since COP26, Caribbean leaders gathered with over 100 of their counterparts in Egypt for the UN Conference on Climate Change (COP27).

The conference, being staged from 6 to 18 November 2022, is expected to depart from previous COP meetings which primarily focused on reducing carbon emissions to mitigate climate change, and financing for adaption for future impacts.

Many are hoping for progress on the contentious issue of ‘loss and damage,’ which calls for wealthy countries to pay for costs already being incurred from the ravages of climate change including extreme weather events and rising sea levels.

However, countries remain divided as to what should count as ‘loss and damage’. Some are pushing for a narrower interpretation which limits it to infrastructural and property damage, while other countries are calling for the inclusion of more difficult to quantify elements such as natural ecosystems and cultural assets.

“Wealthier countries bear a moral responsibility” to help poorer nations recover, adapt and build resilience to disasters, said UN Secretary-General António Guterres during his remarks at the conference.

With similar platitudes figuring so heavily in COP26, many were anticipating the interventions by the leaders of small developing states and any new commitments by their more developed counterparts.

Among those who spoke at the conference were Antigua and Barbuda, Barbados, and Bahamas Prime Ministers Gaston Browne, Mia Mottley and Philip Davis, as well as Suriname President Chandrikapersad Santokhi.  

“We were the ones whose blood, sweat and tears financed the industrial revolution. Are we now to face double jeopardy by having to pay the cost as a result of those greenhouse gases from the industrial revolution? That is fundamentally unfair,” said Prime Minister Mia Mottley.

She called for a re-think of the current international funding models to allow vulnerable nations to remain habitable. “We need to have a different approach, to allow grant-funded reconstruction grants going forward, in those countries that suffer from disaster. Unless that happens, we are going to see an increase in climate refugees. We know that by 2050, the world’s 21mn climate refugees today will become 1bn,” warned Mottley.

Speaking on behalf of the Association of Small Island States (AOSIS) negotiating bloc, current Chairman Prime Minister Gaston Browne called for highly polluting emerging economies including China and India to pay into a climate compensation fund to help countries rebuild after climate change-driven disasters.

“We all know that the People’s Republic of China, India – they’re major polluters, and the polluter must pay… I don’t think that there’s any free pass for any country and I don’t say this with any acrimony,” said Browne to the surprise of some climate analysts who noted that this was the first time AOSIS had included the two in the list of nations expected to provide compensation for climate change.

“The oil and gas industry continues to earn almost US$3bn daily in profits… It is about time that these companies are made to pay a global carbon tax on their profits as a source of funding for loss and damage,” said Browne, taking aim at the global oil giants.

“I’m not here to ask any of you to love the people of my country with the same passion as I do,” said Bahamas Prime Minister Philip Davis, whose country was hit by Hurricane Nicole while he was attending COP27.

“I’m asking what is it worth to you to have millions of climate refugees to turn into tens of millions, putting pressure on political and economic systems around the world,” questioned Davis, while calling on countries to “get real” on climate action as “the alternative consigns us to a watery grave”.

Noting that his nation is one of only three countries with CO2-negative emissions, Suriname President and current CARICOM Chairman, Chandrikapersad Santokhi argued that the bloc’s development is being stymied by the need to borrow to address climate change and repair damage.

Meanwhile, Caribbean countries held fruitful discussion on the margins of COP27. Guyana, Barbados and Rwanda used the opportunity to sign an agreement which could see pharmaceutical companies in Guyana and Barbados be set up to manufacture drugs for distribution to Caribbean, Latin American and African countries.

The Government of Guyana signed a Forest Partnership Memorandum of Understanding (MoU) with the European Union which will see Guyana receiving a €5mn (US$5.1mn) grant for sustainable forest management and preservation, given its estimated US$40bn to US$54bn annual carbon offset.

On Monday 14 November, Reuters reported on the draft UN text setting out what the COP27 climate summit could agree on ‘loss and damage’ financing for countries. Since then, the draft has been debated and amended as representatives of nearly 200 countries seek to find consensus.

With many of them demanding that COP27 produce a firm decision on the launch of a loss and damage fund, the success of the conference hangs in the balance, arguably along with the future of the planet.

Photo by Matthew TenBruggencate

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

4th November 2022

Regional conglomerate Massy Group has launched an investigation into a major alleged data breach at the company.

Reports are that the Hive Ransomware group has leaked online some 87,550 folders and 704,047 corporate files, allegedly belonging to Massy Stores Trinidad and Tobago.

The hackers released staff salaries, photos, personal details, copies of customers’ passports as well as internal audit documents and other financial information allegedly from the company.

Describing the development as “the largest Caribbean data breach dump to date,” the Trinidad and Tobago Guardian Newspaper reported that the documents were verified by a cyber-security expert as originating from Massy.

The leak is believed to be connected to a cyber-security attack on Massy Stores Trinidad and Tobago in April 2022 which saw the company suspend some electronic services.

“Normally they would release it much sooner, usually within two weeks, but I think because of the kind of information they got it took them a while because the hacker group… went through the data received to see what they could benefit from before releasing it to the public,” said the Guardian’s cyber-security expert. “The company took immediate action, suspending all customer-facing systems, and has been working with third party experts to resolve the situation. Backup servers were not affected, and the technical team is actively working with the expert teams to restore the system safely and in the shortest time possible,” read a Massy release at the time.

“The company is not aware of any evidence at this time that any customer, supplier or employee data has been compromised or misused as a result of the situation,” said the statement, despite claims by the Hive Group that they ran encryption on data during the attack.

In a more recent statement, Massy Stores acknowledged that more data was unlawfully accessed during the April attack than initially believed.

“Through continued investigation of the cyber-security incident, we are now aware that data unlawfully accessed by the attackers was more extensive than the preliminary stages of the investigation indicated,” said the release, adding that all potentially impacted parties were notified, given the information available at the time.

The company also challenged news reports and other information being circulated in the public domain about the cyber-attack and leak as being speculative and inaccurate.

Massy’s operation in Jamaica has also been the target of a recent cyber-attack in the second week of October 2022. “The specifics of what occurred are still under investigation by our technical experts,” said a statement by Massy Distribution Jamaica, confirming the ransomware attack.

“We remain confident that our ongoing cyber-security risk mitigation efforts have been effective to date in enabling the timely identification of and responding to this incident,” said the company, which is one of Jamaica’s largest suppliers of consumer and pharmaceutical goods.

Days later, the Jamaica Gleaner reported that approximately 17 gigabytes of data were leaked on the internet, including “personal information such as the names, addresses, taxpayer registration numbers, signatures, videos and pictures of Massy Jamaica employees and contractors”.

The Gleaner said that employee salaries, banking information of suppliers and information about the company’s business model were also dumped online.

Some legal commentators have raised questions about the risk of fraud and identity theft and argued that Massy may face lawsuits under the country’s Data protection Act which speaks to the obligations of holders of personal data to safeguard its confidentiality, integrity and availability.

Meanwhile, tech journalist, Mark Lyndersay argued in the Trinidad and Tobago Newsday that the strategy of some regional companies to attempt to keep cyber-attacks secret from the public is archaic and should be the target of updated legislation across the region.

“Until the laws regarding privacy, personally identifiable information, cyber-crime and corporate responsibility for these issues are proclaimed, companies and the public sector are under no obligation to even report breaches, far less notify affected citizens,” said Lyndersay of Massy Group’s seeming reluctance to provide full transparency on the data breach.

Photo by Markus Spiske

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

21st October 2022

A growing number of countries and organisations are calling for armed external intervention in Haiti as the country struggles with violence and social unrest.

One of the most high-profile figures to support foreign boots on the ground in recent weeks is UN Secretary General Antonio Guterres.

“The Secretary General urges the international community, including members of the Security Council, to urgently consider the Haitian Government’s request to deploy without delay a specialised international armed force to deal with the humanitarian crisis,” said Guterres through his spokesperson.

He sent a 12-page letter to the members of the UN Security Council detailing potential options for enhanced security support in Haiti in accordance with the Council’s request in its resolution 2645 (2022).

“Considering the extremely grave situation, international efforts to enhance support for the HNP [Haitian National Police] must aim to reduce the ability of armed gangs to
block access to and carry out attacks on strategic infrastructure and threaten the livelihood of communities,” said Guterres in the letter.

The Secretary General made it clear that any foreign force would not be under the umbrella of a UN peacekeeping mission, but would instead be agreed bilaterally between Haiti and the nations providing troops. He also noted that as with other similar missions, the UN Security Council would “welcome” the force, and not need to authorise it.

The call comes after Haitian Prime Minister Ariel Henry made a plea to the international community and to CARICOM Member States to help bring an end to the violence after he was authorised to do so by his government. Henry requested the immediate deployment of an international specialised armed force to help the country control criminal gang activity.

“In this effort, the Haitian authorities underscored those solutions need to be Haitian-led and have the HNP in the lead, supported by international partners to improve its ability to provide security,” said Secretary General Guterres.

He noted that Haitian authorities had cited the lack of adequate and sufficient individual protection gear, weaponry, ammunition and other tactical equipment, and training in their use.

Calling for urgent action, VOA News reported that the UN Head suggested a rapid reaction force be deployed under the leadership of one country and composed of forces from one or more countries.

“The force would, in particular, support the HNP primarily in the Port-au-Prince metropolitan area in securing the free movement of water, fuel, food and medical supplies from main ports and airports to communities and health care facilities,” wrote Guterres.

The Washington Post has reported on a draft UN Security Council resolution by the US which supports “the immediate deployment of a multinational rapid action force” to Haiti. The Post noted that this is the first sign that the Biden Administration “may be willing to participate in a Haiti mission that has a military component”.

This comes days after a joint operation involving US Air Force and Royal Canadian Air Force aircraft delivered “vital” equipment to Haiti. A statement by the US Southern Command (SOUTHCOM) said that the equipment included tactical and armoured vehicles purchased by the Haitian police from Canada.

The mission is largely being viewed as an outcome from the two-day visit of US Air Force Lieutenant General and SOUTHCOM Military Deputy Commander Andrew Croft, and US Assistant Secretary of State for Western Hemisphere Affairs, Brian Nichols, to Port-au-Prince which ended three days prior. The delegation met with Prime Minister Ariel Henry, the Montana Group, private sector leaders and broader civil society groups.

In the longer term, the expectation is that foreign forces will be withdrawn gradually as local police restore security in the country. However, Haiti’s Senate has reportedly approved a resolution urging Prime Minister Henry to postpone his request calling for external intervention.

With the country facing a cholera outbreak and 4.7mn people at varying degrees of hunger – including 19,000 at catastrophic levels – according to the World Food Programme, the stakes are rising for the interim Henry Government. However, the complicated history with external forces including UN peacekeeping missions serves as a poignant reminder of what can go wrong.

Photo by Chris Henry

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

7th October 2022

Caribbean leaders have used the 77^th United Nations General Assembly (UNGA) to highlight key challenges facing the region.

Staged under the theme ‘A watershed moment: transformative solutions to interlocking challenges,’ the annual meetings saw world leaders converge at UN Headquarters in New York City from 20 to 26 September 2022.

Speaking at the General Debate, Caribbean heads of state and delegates issued calls to action on a range of issues that largely require policy change from countries in the global north. 

“We can make a difference in this world and let us do so recognising that a world that reflects an imperialistic order, hypocrisy and lack of transparency will not achieve that mission, but one that gives us freedom transparency and levelled playing field will allow for a difference,” said Barbados Prime Minister Mia Mottley who touched on a range of issues.

She called for disaster and pandemic clauses to be included in the debt of developing countries and more accessibility of financial assistance from multinational development banks.

“Any attempt to deny that the climate crisis has man-made origins is an attempt to delude ourselves and to admit that we want to be accomplices in the continuing death and loss of damage that ensues,” insisted Mottley.

She also criticised the functioning of the UN Security Council. “We believe that a Security Council that retains the power of veto in the hands of a few, will still lead us to war as we have seen this year, and therefore the reform cannot simply be in its composition but also the removal of that veto,” stressed the Prime Minister.

Belize Prime Minister John Briceño, whose country is one of those most affected by the loss of correspondent banking relationships and de-risking, also called for financial reform. “We need a full-scale, bold reimagining of the global financial architecture—no more tinkering at the edges to conceive of additional programmes that are based on the same false logic,” he argued.

Briceño also joined the chorus of leaders who called for the removal of the unilateral US embargo on Cuba, and the meaningful inclusion of Taiwan in the UN system. Similar calls were made by Prime Ministers Terrance Drew, Ralph Gonsalves, and Philip Pierre of St Kitts and Nevis, St Vincent and the Grenadines and St Lucia, respectively.

“We call for an end to the decades-long embargo imposed against Cuba. My country encourages meaningful dialogue in resolving these and other conflicts in countries that are targeted by unfair sanctions that create enduring external and internal hardships,” said Prime Minister Drew.

“How can we stand askance, in relative silence, and contented inaction, in disregard of Taiwan’s legitimate right to exist in accord with the wishes and will of the Taiwanese people?” asked Prime Minister Gonsalves.

“The Commonwealth of Dominica again joins the voices of many other members of this global organisation to call for the immediate lifting of the unjustified oil embargo and other general sanctions imposed on the people of Venezuela,” said Dominica’s President Charles Savarin on the challenges of Venezuela. As tensions escalate in Ukraine, he also called countries with nuclear weapons to abide by international law.

Jamaica’s Prime Minister, Andrew Holness put the spotlight on the impact of the illicit trade of guns and the need for reparations. “Jamaica does not manufacture guns, but our population suffers from the effects of widely available guns. The countries that manufacture weapons that are available to the public must implement stronger measures to ensure that those weapons do not end up on streets and in the hands of people for whom they were not intended,” said Holness.

He called “for the international recognition of reparatory justice as a necessary path to healing, restoration of dignity, and progress for people of African descent,” maintaining that the world cannot turn a blind eye to the systemic imbalances which persist after centuries of exploitation. Holness also expressed concerned about the proliferation of international cybercrime and praised the work being done by the UN to develop a cybercrime treaty.

Meanwhile, Haiti’s Foreign Affairs Minister, Jean Geneus used his address largely to highlight the ongoing unrest and food insecurity in the country. He called for governments to contribute to the pool of funds used to financially aid the Haitian police to develop capacity and restore order. Noting that some 4.9mn people in the country would require humanitarian aid in 2022, he called for realisation of promises made at the international donor conference for Haiti’s reconstruction earlier this year.

With the UNGA regarded in many quarters as merely a talk shop, leaders of developing states have been noticeably more direct in their addresses in recent years. It however remains to be seen if tough talk from small states can move the needle in the absence of the proverbial ‘big stick’.

Photo by Scott Webb

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

23rd September 2022

The International Air Transport Association (IATA) has warned Caribbean countries that they are pricing themselves out of the global tourism market.

The caution came at the recent Caribbean Aviation Day in the  Cayman Islands on 14 September. Staged under the theme ‘recover, reconnect, revive,’ the event saw government ministers, industry experts, and senior aviation executives come together to discuss key challenges impacting the region and opportunities for growth.

With global passenger air traffic now at 74.6% of pre-COVID levels, IATA Vice President for the Americas, Peter Cerdá stressed that Caribbean destinations are “running the risk of pricing themselves out of the global travel and tourism market, where passengers have more choice than ever before”.

“A recurring theme is also taxes and charges levied on aviation. Yes, we understand that the provision of adequate infrastructure for aviation comes at a cost, but very often it is difficult to see the correlation between the level of costs and charges, and the actual service provided,” said Cerdá.

He highlighted that while globally taxes and charges make up approximately 15% of the ticket price, in the Caribbean this constitutes 30% of the price on average, with some destinations reaching as high as 50% of the total ticket cost. When compared to destinations like Lima, Peru, Cancun, Mexico, add other relatively close beach destinations whose taxes and fees only represent 23%, the Caribbean is becoming a less attractive destination.

“Today’s passengers have a choice, and as the total cost of vacations increasingly becomes a decision-making factor, governments must be prudent and not price themselves out of the market,” urged Cedá, noting that t the World Travel and Tourism Council (WTTC) forecasted a possible annual 6.7% travel and tourism GDP increase between 2022 and 2023 if the right policies are implemented.

Speaking later at the conference, Barbados’ Tourism Minister Lisa Cummins defended the taxes and charges to her country. “Let us break down where fees and charges go to in-country because the things that we want and the things that we have to be able to provide come with a price tag,” said Cummins. She argued that taxes and charges do not go to the government’s consolidated fund as revenue, but instead go back into providing infrastructure and services in the aviation industry.

“We realised that even if Barbados would, and we have been looking at it, look at the changes that we potentially can make to our tax structure… We don’t have the number of seats that compensates for those losses in revenue,” said Cummins about the trade-off between government revenue and taxes.

During the session entitled ‘Transforming Regional Connectivity: The Role of the Private Sector in Financing Intra-Regional Travel,’ President of the Caribbean Development Bank (CDB), Hyginus Leon acknowledged the complexity of the relationship between taxes and the tourism industry.

Leon highlighted the need for investment in operational aspects of the travel industry in the region including appropriate financing mechanisms which would accommodate the cycles of the aviation industry, and the establishment of an enabling environment with the requisite multilateral agreements effected by the countries in the region.

Meanwhile, Anguilla’s Minister of Tourism Haydn Hughes echoed the importance of aviation given that his island assigns a low priority to cruise tourism. “You have to weigh what you would benefit out of a cruise and what will be the drawbacks,” he said, adding that the island has decided over decades that cruise tourism is not good for the destination because of the low average spend of cruise passengers.

“We have a 20-year plan in terms of aviation and aerodrome development and that plan has already started,” said Hughes referring to the extension of the runway and a new terminal building on which construction is expected to start in early 2023.

The conference also saw the election of a new chairman of the Barbados-based Caribbean Tourism Organisation (CTO). Cayman Islands Minister of Tourism, Kenneth Bryan replaces Barbados’ Lisa Cummins for a two-year term.  

“I’m ready to take on the challenge, in collaboration with my regional colleagues, of finding a new way forward, as well as addressing any issues we have within the organisation to improve efficiency and focus,” said Bryan at the CTO’s general meeting held along with the conference.

The CTO membership includes two dozen countries and territories across the region, as well as private sector entities as allied members. Cayman Islands Director of Tourism Rosa Harris was also elected as chair of the CTO Board of Directors.

Photo by yousef alfuhigi

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.