Entertainment promoters say they eagerly await the formation of the Caribbean Single market and Economy (CSME) and more opportunities to develop and export “cultural products”. Trinidadian Joel “Signal” Morris argues that the case for (CSME) was compelling and clear-cut. “It is time that we get serious and implement this thing. To compete on a global scale we need to unite the people of the Caribbean”. In recent years there has also been a notable increase in the number of Trinidadian promoters, partnering locals to bring entertainment products to the Barbados market. This has been evident with costumed bands on the road for Kadooment as well as in the intra-regional movement of calypso artistes for musical productions. Apart from Spektakula presentations, the other entertainment package to make perhaps the biggest impact to date has been the Wet Fete which evolved in Trinidad five years ago. For the current Crop-Over festival Morris, of Noise Productions, teamed with Barbadian partners for a successful second edition of Wet Fete off the Spring Garden Highway on July 20. In excess of 5000 people attended the event which was an elaborate open-air production with far-reaching economic impact. Some of the major sponsors included Carib Beer, Coca Cola, Cable & Wireless and Hott FM radio. Insiders estimated the outlay was in the region of $150 000 and the returns were a little better than break even.  Export of these entertainment products and concepts is something which Morris said must continue for the regional entertainment market to remain viable. “Our wet fete concept is a Caribbean thing and one of our main objectives is to develop a Caribbean product that is strong enough to compete on a global scale,” Morris told Business Authority.

Part of the long-term vision, he said,is to stage similar events in such places as Brazil, Bahamas, Puerto Rico and Venezuela as a Caribbean product. “We need to show the world what the region has to offer . . . along with our soca music, wet-fete is really a tourism and cultural product,” he said. Veteran Trinidadian promoter Frank Martineau said there were still many challenges in the region which were stifling the growth and development of the entertainment industry. Among them, he said proper venues were needed and tax policy on the industry in most territories needed to be reviewed. “Some of the taxes are really punitive and counter-productive. When taxes are that high what you succeed in doing is to keep out promoters which also negatively impact on events that could stimulate the tourism industry,” Martineau said. On the CSME, he suggested: “The single market and economy should have been here already. We need to come together and push our cultural products as a region”. Barbados’ Minister of State in the Prime Minister’s Office, Senator John Williams said the notion of the “creative economy” was recognition of the importance of cultural industries to states like Barbados and the challenge was for such nations to be able to produce products for the global market.

“We must be in a position not only to guarantee the availability of cultural products but that the products are of a sufficiently high quality to meet the demands of international markets,” said Williams. Barbados’ Crop-Over stimulates economic activity in excess of $60m annually and has been a leader in developing the “creative economy”. Crop-Over increases tourism arrivals in the summer and has emerged as a driver of business activities and cross-border partnerships. This island’s entertainment industry is most vibrant between June and August and shows itself in calypso tents, recording studios, stage management, sound engineering, costumes production, transport, security and rental of event venues.

Convinced that sugar is no longer profitable, a Government agency in Barbados has started trials on a new variety of cane for use in the generation of electricity. Word of this has come from Minister of Agriculture, Senator Erskine Griffith, who in an article published in the Barbados Daily Nation, said that the Government is keen on the possibilities offered by a variety of cane known as fibre cane. In an effort to solidify plans for the future of the industry, the Barbados Agricultural Management Company (BAMC) has leased ten acres of land at Golden Ridge, St George to grow the variety and to undertake trials on its possible use. “The BAMC is working on that as we speak. What has also been suggested is not that we stop growing canes or making sugar but that we look at different ways of dealing with it,” he explained. Asked whether this move was an indication that Government had accepted that sugar production in Barbados could come to end, the minister responded: “You could say there is an acceptance that the sugar industry as we know it may not exist in a few years. All the indications suggest that we may not be but we need the evidence to suggest what we should do. “The intention behind these trials that we are planning now is to provide us with evidence about where we go and how we need to get there.”

According to the agriculture minister: “We are proposing to get a small plant to do some trials to be satisfied that the plant is going to work. That is going to be done in the coming months.” He added: “If that works, it will help to influence how we deal with the issue of manufacturing of sugar in the future.” Last week, Brazil, Australia and Thailand made a formal request to the World Trade Organisation (WTO) for the establishment of Dispute Resolution Panel to hear their complaint against the European Union’s (EU) sugar regime. The EU regime provides subsidies to European beet sugar producers, while the EU pays Africa Caribbean and Pacific (ACP) cane sugar producers, who include many former British colonies, the same price it pays EU producers. Australia, Thailand and Brazil, the world’s largest producers of sugar, claim the EU regime serves to keep the world market price of sugar down and contravenes WTO rules.

Q. The word equity comes up a lot in the business press, but what does it mean in terms of investments?

Kevin, Lopinot

A: Financial instruments can be classified into two categories, fixed income and equities. Fixed income instruments are those which generally offer principal protection (protection of the funds you invest) and a fixed rate of return. Equity investments, such as stocks, do not provide principal protection, but the potential return is much higher than fixed income instruments, albeit more volatile. There is another context in which the word equity is used in the financial arena. Equity in a business refers to the capital which is put up by shareholders to start the business as opposed to debt, which is the amount borrowed from the bank to finance the business. When investing in the stock market some analysts may refer to the level of equity in the business in comparison to debt. Generally, the higher the level of shareholder capital or equity in a company, the lower is the risk for an investor buying shares in that company, all things remaining constant. The ratio of debt to equity is referred to as the level of “gearing” in the company. So, if your stockbroker says that the company has a low level of gearing he or she simply means that there is a higher degree of equity as opposed to loan capital, which reduces the risk of investment.

Q. I hear people talk about financial independence all the time, even the politicians are now using the expression, but what does it really mean? Almost everyone in the country seems to be living on credit.

Lisa, St. Joseph

A: Financial independence is an elusive concept indeed. But is not unrealisable. Once a savings and investment ethic is developed from early, over time the goal of financial stability can be achieved. The process is simple. The higher the return required, the higher is the risk that would have to be taken. That’s the bad news. The good news is that risk is reduced the longer the time over which the investment is held. Therefore younger folks, with say ten or fifteen years to retirement would want to invest a larger percentage of their funds in the stock market, which, although volatile in the short-term, can generate significant wealth over the long term. The stock market is an avenue through which you can build wealth over time.  The problem in Trinidad & Tobago is that the older generations were taught that savings only meant a savings account at the bank. They therefore lost the opportunity to start investing in the stock market early. If they had done that, over the past ten years they would have earned an average rate of 20% per year.

Think about it, if you had $50,000 ten years ago you would now have just over $300,000 today from leaving your funds in the stock market. On the other hand, leaving it in a savings account in the bank would have increased your $50,000 to $75,000, calculated at an average rate of 5% per annum. We in Trinidad & Tobago need to look to the stock exchange and develop that culture in our youth. In the United States over 30% of households own stock. We need to increase the percentage in Trinidad & Tobago. That will definitely help the process of developing financial independence.

Q. My VSEP package will be coming through soon and after taking care of some matters I should have around $5,000 to save or invest. What’s the major difference between putting the funds in a money market account compared to trying the stock market?

Anand, Couva

A: The main difference between a money market account and the stock market is the degree of risk taken. A money market fund offers principal protection against the assets of the fund. For example, most of the money market funds in Trinidad & Tobago have a predominant holding of Government securities. An investor getting into the fund is essentially buying Government assets. Therefore, by extension, the obligation of the investment is secured against the Consolidated Fund of Trinidad & Tobago from where the Government services debt. In the stock market the investment is unsecured and the investor is taking the risk of the company as opposed to a money market account where the investor is taking, to a large extent, the risk of the Government of Trinidad & Tobago, which is extremely low. In fact such an investment is loosely referred to as a risk-free investment.

Due to the difference in risk between the two types of investments the possible return on the stock exchange is therefore higher than a money market account as the risk taken is much greater. In fact, the return on capital invested in shares is extremely lucrative and exceeds returns on investments made by entrepreneurs in certain types of businesses. Therefore it may be better, from an economic point of view, for some persons with capital who are contemplating embarking on a business to invest in the stock market rather than opening their own businesses.

Questions can be sent to PO Box : 1830, Wrightson Road, Port-of-Spain
E-mail : cmmbsecuritie@mycmmb.com

IT SEEMS grossly unfair, even callous, for the World Trade Organisation to be insisting on the phasing out of preferential trade agreements which have long sustained the fragile economies of small island states while, at the same time, permitting rich countries to continue their programme of hugely subsidising their farmers. It seems to us that if the United States and European countries want to maintain this assistance to their farmers, then the WTO should be be quite amenable to small island states, such as those of the Caribbean, seeking to extend the life of trading concessions they have traditionally enjoyed. In terms of consequences, the hardship that one-crop island economies will face from a curtailment of preferential access to metropolitan markets will be far more severe than any adjustment or restructuring that rich country farmers may have to undertake as a result of the removal of subsidies.

Farm subsidies, in fact, have been the main obstacle to progress in world trade negotiations and one of the drawbacks to the economic advancement of developing countries such as those in Africa. As The Economist pointed out two weeks ago: “What Africa really needs is sharp cuts in rich countries’ farm subsidies. These are higher in Europe than in America, despite last month’s lukewarm reform of the EU’s Common Agricultural Policy and Mr Bush’s disgraceful handouts to American farmers. The average European cow attracts more subsidy than the average African farmer earns, which obviously makes it difficult for beef farmers in Botswana to compete with beef farmers in Europe.” If rich nations are intent on protecting their farmers, in spite of the free trade thrust and the protest of poorer countries, then why should the WTO insist on the dismantling of concessions upon which small island states depend for their economic survival? It seems necessary, then, for Caricom countries to use their collective strength to make this point in negotiations at the WTO Ministerial Conference to be held in Cancun, Mexico, in September. Jamaica’s Prime Minister PJ Patterson emphasised this approach when he said: “Our mission must aim to ensure that the rules and the pace of implementation in multilateral, hemispheric and inter-regional trade agreements take full account of the goals and disabilities peculiar to small, developing economies.” Specifically, he added, special and differential treatment provisions must be crafted to facilitate structural adjustment and promotion of the development of small developing economies, in particular the small island developing states.”

A similar point was made by Belize Prime Minister Said Musa who noted that “over a decade, the Caribbean has been promoting concepts related to the need to create a human-oriented trade regime which took account of the special circumstances of small and disadvantaged states and which put people first.” While many leading economists champion the cause of free trade, claiming that all countries will eventually benefit from the consequent growth in the world economy, the movement still seems to be riddled with inconsitencies, insensitive to the economic fragility of small island states and more or less geared to benefit the developed industrialised nations. In this environment, it seems crucial for Caricom states to negotiate their future as one united block. As President of the Caribbean Development Bank Prof Compton Bourne said, while small states do not have a voice in some international rule-making forums within the financial world or within the UN, they have a lobbying role. In other words, for small states to stand a chance of being taken seriously, they will have to speak with one voice and act in concert.

“The 21st century belongs to those who learn how to leverage human capital.” 
Dr Jac Fitz-enz.

What is your value to your organisation?  What value do you bring to your place of work?  If you were to leave your organisation tomorrow, how would it suffer as a result of your departure? Would it suffer?  Or would you be easily replaced? These are some of the questions a workshop on “Human Capital Value Management,” held at the Hilton Hotel and Conference Centre on July 16, sought to answer.  The workshop was hosted by the Human Resources Management Association of Trinidad & Tobago (HRMATT), in association with Quality Consultants Limited and RBTT ROYTEC, and was conducted by international author and speaker, Dr. Jac Fitz-enz.  The workshop was part of the Association’s sixth Biennial Conference, which had as its theme: “The Art of HRM — Linking People, Strategies and Profits.” The central question of the workshop was “how can the human resource function in an organisation help the organisation to compete on the basis of increased human capability and commitment?”

Dr Fitz-enz described an organisation’s people as its “primary profit lever”; that is, it is people who create value for an organisation.  Not the organisation’s finances; not its material resources; not its technology; but its human and intellectual capital — the skills, knowledge, competencies, creativity, innovativeness, attitudes, motivations of its people.  This is what makes people the new “competitive advantage” for organisations.  The “new” responsibility of the human resource function in organisations, therefore, is to help the organisation leverage its human capital for competitive advantage. In my introductory remarks to Dr Fitz-enz’s workshop, I made the point that our people are the only true value-adding resource  that we as a nation possess.  Our human resources are our greatest natural resource more important than all the oil and gas off the east coast of Trinidad, or wherever else they may be found, and more important than all the financial capital that comes from the oil and gas.

Without human intervention, the oil and gas cannot be transformed into the financial “windfall” that we are all expecting.  Our organisations and the nation as a whole, therefore, have to find ways to lead and manage our people so that they add, rather than subtract, value from our organisations, our nation and our lives. In his keynote address on the first day of the conference, Dr. Fitz-enz painted a picture of an evolving world with converging economies, increasing competition, emerging technologies and a declining talent pool.  Organisations are being transformed by scandals, restructuring, downsizing, mergers and acquisitions, budget cuts and outsourcing, among other things. On the world market, the only certainty is uncertainty and the strategies that got us to where we are today won’t get us to where we need to be in the future. New challenges call for new strategies.  The new foci of attention have to be on the external customer, on attracting and retaining talent, on information and knowledge management, on fast change and on globalisation.  Driving profitability and increasing customer loyalty have replaced cost reduction as the primary concerns of CEOs, indicating that maximising lifetime customer value will be a key market trend and business strategy to sustain long-term growth.

The challenge, then, is: “How can organisations manage their human capital in a way that adds value?” How do we attract, maintain, develop and retain the talent necessary to take our organisations forward?  How do we maximise the potential of our people so that they create value for the organisation?  How can we turn our people into our competitive advantage?  

The answer is simple, but, perhaps, not as easy to achieve:
*Hire the best talent the fastest;
*Pay competitively and equitably;
*Training continuously, including supervisory, management and leadership development;
* Maintain positive management/employee relations.

Dr Fitz-enz also identified some general measures to support these activities:
* communicate performance expectations
* measure work outcomes — both quantity and quality
* benchmark
* implement best practices wisely
* allocate resources appropriately
* measure again, and
* recognise and reward performance.

Human capital management must be linked to the corporate goals of the enterprise.  There must be alignment between what the human resource department is doing and what the organisation wants to achieve.  When we have that alignment, we are more likely to achieve organisational success through faster time to market, product and service innovation, increased market share, improved customer service, product quality, increased productivity, sustained growth, industry leadership, company reputation and, of course, competitive advantage.

Dr Charles is a Director of Quality Consultants Ltd.

The views expressed in this column are not necessarily those of Guardian Life. You are invited to send your comments to:
guardianlife@ghl.co.tt

General insurance providers in Barbados are confident that they are in a position to take advantage of the opportunities to expand under a Caricom Single Market and Economy (CSME). John Jones, general manager of Caribbean Home Insurance Company, maintained this as he put the position of the General Insurance Association of Barbados (GIAB) during discussions over the weekend at the Sherbourne Conference Centre, on the Opportunities, Threats and Challenges for financial and non-financial services under the CSME. Arguing that there are entities in Barbados that are quite capable of expanding in the region, he said the fact that there would be a level playing field was a plus for local insurance providers. Jones told participants that the Eastern Caribbean and even Haiti represented huge potential markets.

Outlining some of the threats he envisaged under a CSME, the insurance boss said marginalisation of smaller companies was expected, though he believed the bigger ones would benefit from economies of scale. He also identified increased criminal and fraudulent activities that will come with the freedom of movement in the region. A lack of reinsurance capacity was also highlighted by Jones, who told members of public and private sectors that containing the cost of services and keeping them at competitive levels will be challenging. And while people of the region get used to the idea of operating as one, Jones said “managing change and cultural differences” will be critical for companies seeking regional expansion.

The top insurance executive insisted that with the CSME there will be a need for standardisation of the regulatory and statutory frameworks. “The challenge will be the political will and leadership, they need to buy into the issue,” he told colleagues in the financial and non-financial services sector. Jones also identified the challenge of “influential detractors” to CSME who he advised, needed to be brought on board in order to move forward.

Young professionals who want to own a home may have no choice but to move to the East. Patricia Lazzari, President, Association of Real Estate Agents (AREA), said spiralling high prices in the west is a deterrent for young people. “Those that are reasonably low priced go very quickly, so sometimes it is very hard to find homes for young professionals and newlyweds,” she said. Lazzari, an agent for Eckel, Quesnel and Lazzari, said young professionals are usually looking for properties priced between $350,000 to $850,000. Unfortunately, Lazzari said a three bedroom townhouse in the West starts at about $800,000. The lower price bracket is only available in the East, she said. Lazzari said that what these professionals usually have to end up doing, is rent for a while and accumulate the ten percent deposit required as a downpayment for a home, adding that many people just starting their lives usually do not have that kind of money.

Lazzari said she does not think that young people will have a problem with sourcing loans from banks, since financial institutions are always willing to lend, especially for properties. She reiterated, that the main problem is not being able to find the suitable property. She recommended that people go to a bank or finance house and work out their finances. With a shortage of land, young professionals are heading east. Trincity, which she believes will be quite popular, is a little more affordable than properties in the West. The real estate agent said that Central is also growing rapidly, and that land prices are quite low in that area. Another agent said purchasing a first home is very exciting but professionals and young couples must be realistic about what they can afford. “Sometimes newlyweds and other young people put everything on their ‘wish list’ and they cannot always afford that much.”

Owning a home, this agent says, builds equity as the home appreciates in value and the couple saves money on income taxes, through the deduction of interest on their mortgage. He also suggests that when buying a first home people should seek the assistance of an agent. “With their first purchase, they should use a real estate agent. They should not do it on their own. The reason being there are too many issues for them to be going through on their own. The first time, they would be better served by letting a professional show them through,” he said. He said they should also determine what they can spend. “If they have not already, a couple must work out a budget, determine how much they can realistically afford and look at financing options.” Some agencies, he noted can help people work out a budget and explain the various programmes available. “Often, young people only deal with their immediate needs and have not developed long-term financial plans. They may need help working out the details.”

Often, he noted, it is wise to be pre-qualified for a mortgage, so that the couple knows exactly what a lender will give them. Sometimes, he added, after they are pre-qualified, a couple finds that they just cannot buy a home immediately because they have not established credit or they do not have sufficient income. The agent, he said should work with the couple to find houses so the couple can see what they can purchase within their budget. “For some couples whose dreams are bigger than their wallets, that can be disappointing and they may need time to adjust their thinking.” “Fixer-uppers,” he said are great values for couples who do not mind putting in some “sweat equity.” He explained that they can buy a house, fix it up themselves, bring up the value, so that on resale, they can make enough money to cover the closing costs of a new home. Davie Seukeran, office manager, Tucker Real Estate, noted too that young couples want something between $600,000 to $800,000 but properties in the West can exceed $1 million.        

R Taylor, director, Dream Homes and Property Advisors Real Estate Services Ltd said the problem with first time home buyers, in addition to the cost of properties, is the fact that some of them cannot afford to make the ten percent down-payment required to purchase a home. Additionally, she said, their inexperience in mortgage and finance issues is a hindrance. Taylor said that while some people are able to make the ten percent deposit, many cannot afford it and sometimes have to rent until they can save that deposit. She noted that sometimes some couples are looking for homes under $250,000, but said that they would be lucky to find a house in that price range.

In their 2002 annual reports, March 2002 for RBTT and September 2002 for Republic Bank, the two institutions stated healthy performances for the financial year end 2002. Chairpersons of both banks agreed that 2002 was challenging for operations. September 11th terrorists attacks on the US impacted negatively on global, regional and domestic economies reflected in a general slow down of business activity, low demand for credit and a higher incidence of non performing assets. The “tentative business environment created by the political impasse arising out of the 18-18 results of the General Elections in December 2001,” had the effect of slowing local growth and demands. Despite these challenges both banks increased performance from the last period.

RBTT’s March report quoted after tax earnings  of TT$491M and earnings per share of TT$1.42. The total dividend declared for the year was 60 cents per share.  Group Assets at Balance Sheet date stood at TT$27.7 billion, representing an increase of TT$8.7 billion or 45% over the previous year.  Acquisitions in Jamaica, Netherlands Antilles and Aruba accounted for TT$8.4 billion and TT$0.3 billion came from organic growth. The Return on Average Equity of 24.4% while the Return on Assets was 2.1%. Republic produced after tax profits of TT$444.7M. Earnings per share climbed at TT$2.8,  an increase of 7.54% over the last year and the total dividend for the year is TT$1.25. Total assets for the Group stand at TT$19.2 billion an increase of 9.84% over last year.  Return on average assets was 2.43% and Return on average equity was 17.33%. RBTT has a more diversified regional portfolio than Republic. 50% of the RBTT Group’s total asset base resides in Trinidad and Tobago (T&T) with the other 50 in Dutch speaking, Jamaica and Other Caribbean territories.  44% of total liabilities were incurred and 58% of operating profits were made in T&T. Republic is very much oriented in T&T and its figures reflect the focus of the bank. 62% of its operating profit is generated within T&T and 78% of assets and liabilities are related to the T&T operations.  RBTT is way ahead of Republic in the expansion and territorial game.

Maxine Attong is a financial and management consultant
E-mail :  enhanceink@hotmail.com

Natural gas markets are changing worldwide, and although the pace of change varies by region, the overall challenge for energy companies is to deliver a market model with investment incentives, customer demand, reduced costs, and competitive prices, PricewaterhouseCoopers LLP said in a recent report. “Certainly for all mature market players, gas no longer is the plentiful fuel source that it used to be, and there is a price to be paid for ensuring the continuance of its supply,” PWC said. “Policy makers and industry leaders alike must establish who will pick up the tab and how to create the right environment for its timely payment.” For instance, the mature markets of North America and Europe represent the highest consuming continents, but indigenous supplies for both are decreasing toward a production-supply shortfall. Strategic investment in pipelines linking Russia and the UK or Canada and the US follow the traditional transportation options while LNG offers an alternative for companies to commercialize reserves currently considered too remote to be economical.

Meanwhile, both pipelines and LNG require significant investment, said the report entitled “Going Global—change and challenge in the gas market.” The process of change began in the US and has spread via the UK first and then to the rest of Europe, spurred by the European Union gas directive.  As markets mature, the potential for more dynamic trading conditions are emerging. “Regulatory policy within liberalised markets has so far been directed at the squeezing of companies to gain greater efficiencies and deliver the benefits to end consumers, yet today, we have a situation that is squeezing potential investors in the gas chain and leading to a growing supply-demand deficit,” said Michael Hurley, PWC partner. “This situation needs a rethink, and ultimately regulatory policy must address the need to create sufficient security of supply and so facilitate increased levels of investment,” he said. In the US, wholesale gas markets have moved toward greater liquidity with the Henry Hub as the main trading point. In Europe, the emergence of a specific gas market has been slower. Gas contracts remained oil-product driven in Europe, where long-term take-or-pay supply contracts still are common. The UK has established short-term spot trading because its energy markets are fully liberalised and end-customer choice is a reality, PWC said.

“Gas hubs are, however, beginning to emerge in continental Europe. Zeebrugge, on the Belgian coast, which currently has the capacity to handle 40 billion cu m of natural gas/year, has emerged as the first gas trading hub in the region,” the report said. Zeebrugge’s importance is expected to grow because it represents the confluence of two principal European gas routes. One route runs east-west from Siberia to Scotland while the other runs north-south between Norway and southern Europe. European companies will require greater flexibility given changing market conditions, but long-term deals still could survive even though liberalization of gas markets has reduced their role. “A hybrid solution may evolve, as was the case in the oil market of the 1970s, whereby long-term contracts are still used, but these concerned fixed volumes only, with prices floating to reflect the end market,” the report said.

For instance, some UK players have committed to long-term volumes in which the contracts outline a netback arrangement according to the market price. As markets liberalise with new contracts and new supplies, “a key challenge will be to avoid a roller coaster of supply-demand imbalances,” the report said. Martha Carnes, a PWC global gas partner, said trading and risk management are vital for companies seeking to limit their volatility exposure. “Attracting new capital within this market is increasingly difficult, and companies active in the gas sector must convince the investment community to accept a lower-return model, and to do so, they’ll need to offer clearer explanations of the lower associated risk profile,” she said. “The importance of Europe to Russia’s gas sector, and indeed, the Russian economy, means that, ultimately, the impact of EU liberalisation will be felt further east,” the report said. Russia provides 30% of Continental Europe’s total gas supplies, and 65% of Russia’s total gas exports go to Europe. “It is a vital hard-currency source for the Russian economy. Investment in new Russian exploration, production, and transportation will be critical in the coming years, with a consequent need for outside finance,” PWC said. The Russian market will follow European markets in seeking spot trading, the report said, adding that steps toward this already are in place. “Certainly for all mature market players, gas no longer is the plentiful fuel source that it used to be, and there is a price to be paid for ensuring the continuance of its supply,” PricewaterhouseCoopers said. “Policy makers and industry leaders alike must establish who will pick up the tab and how to create the right environmental for its timely payment.”

It is almost ten months since I wrote about “kidnap insurance” in this column. Much has happened since. Trinidad and Tobago while not at that time seen in the eyes of the international community as a hotspot, was just getting on the radar screen on account of the few high profile families who had been affected by the kidnap and extortion phenomenon. All this has changed. Trinidad and Tobago has achieved notoriety as a dangerous place in the short space of a few months. Now, the entire country is gripped in fear and the ease of communication via the internet has made the crime situation in the country a key cause for concern for our friends and relatives abroad, who keep in touch daily by logging on to the newspapers. The question is, who’s next to be killed or kidnapped? In fact it could be anybody! There is a complete breakdown of law and order. Criminals feel empowered that they could commit crimes and even mastermind crimes secure in the knowledge that they would not be caught or if caught, stand a big chance of getting away in view of our legal system. Crime is a business. In fact it is big business.

Our present legal system and our laws favour the criminals and unless and until the authorities take strong action to correct this imbalance to send fear into the minds and hearts of these criminals the situation will only get worse. Criminals know only force — not kid gloves or ole-talk. The issue of Kidnap Insurance made it to the front page of one of the Sunday newspapers. The article suggested that there was an increased demand for insurance coverage. There is no doubt that there would be an increased interest on account of the current crime situation. Until about a year ago there was little or no interest in this kind of insurance cover. Everything is relative and only those of high net worth will be in a position to afford it or have their companies/employers pay for this cover. However the premiums are generally out of the reach of the average citizen. Trinidad and Tobago is a copycat society. We adopt the worst aspects of the developed world and the spate of kidnapping has been turned into a business. We hear of the body-snatchers who are the underlings and are paid for their “wuk” and the criminal bosses who then take over the negotiations for ransom. How come the low level criminals know who the bosses are and the law enforcement authorities are unable to apprehend and dent these operations? There are more questions than answers!

We must remind ourselves what kidnap insurance is all about. It does not prevent kidnapping. What it does is to make ransom money available where the family of the victim might otherwise be unable to raise it but again only up to the limit of the cover purchased. Of greater importance, it makes available to the family and the law enforcement agencies the worldwide expertise of hostage and kidnap negotiators whose prime objective is the safe return of the victim. These experts do not know our “culture” and therefore they must rely heavily on local imput although their advice is valuable. There is no real indigenous insurance market for kidnap insurance and eventually the international market is the ultimate provider of the cover. At present there are insufficient buyers to make a market, as insurance depends on the law of large numbers. Importantly, there must be complete secrecy as the existence of this cover must not be disclosed to anyone. That is the condition of the purchase of insurance cover. Usually the international insurance community sees the risk of kidnapping as being above average for an expatriate working in a foreign country because an employer would more than likely have the financial resources to pay and secure safe release. Some foreign companies purchase kidnap insurance as a prerequisite of the terms and conditions of service in order to encourage that employee to take up an overseas appointment in particular in countries recognised as known “hot spots” for kidnap and ransom. It is possible that Trinidad and Tobago is fast reaching that stage if it is not already there.

The situation in Trinidad and Tobago is almost unique. Almost anyone is at risk. It would appear that the body snatchers are going after anyone who happens to be in the wrong place at the wrong time. Just for a few dollars, it is seen as a pay day, as the committal of any other crime with less risks attached and with the chance of a higher cash income. Regardless of one’s station in life, the victim’s family will try to raise whatever monies to secure the release of loved ones. This is where the incidence of kidnapping poses a real incentive to cash which cannot be ordinarily earned by these kidnappers. As has been reported, the kidnappers mean no harm. They are only doing a job for which they receive money but sometimes these situations get out of hand resulting in injury or death of the victim. The insurance industry has many challenges. It is faced with an inordinately high level of criminal activity in the country — kidnapping being the most serious — but it goes right to the heart of lawlessness and governance. One only has to look at the PH drivers and the impotence of the Police to do anything — some even take the view that they are making an honest living — but this is where it all starts by the inaction and the turning a blind eye to lawlessness in the country. There is the need for action and it is only the results that count. Not promises. Not words that ring hollow. The time for serious action from the government and law enforcement authorities is long past and criminals must be put on the run. The country is under siege. Buying kidnap insurance is not a solution. It will not prevent kidnapping. It is only a plaster on a sore.

E-mail: daquing@cablenett.net