Businessuite Digital Weekly 2nd November 2015

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2 Businessuite Weekly Issue: 10



Cover Story

EDITORIAL

TECHNOLOGY

Leadership INVESTMENT

POLITICS AND THE ECONOMY

BUSINESS ENVIRONMENT

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ContentsDigicel Ready for the Challenge: Unbothered by Liberty Global/ Cable and Wireless buy out talks

“Unbothered. We can see from the chatter that something is bound to happen, but whatever it is, we’re ready for them.” Those are the words of Digicel Chairman Denis...

Customer Privacy and its place in the Goods and Services Industry

Several days ago, I was greeted with somewhat disturbing news. I was informed by a family member that they had gone to a furniture and...

Facebook to Remove “Other" Messages Folder

Social Media network, Facebook will over the coming days begin efforts to phase out the ‘other’ messages folder. The company will instead...

The End of Retirement As We Know It (Part 2)

In an issue of Newsweek Magazine, Stefan Theil explored the implication of these demographic shifts in developed countries. In USA and Europe, they...

2,500 high level jobs to be made available to Jamaicans following US$350m investment in Spanish Town Freezone

At least 2,500 Jamaicans are to benefit from the availability of high level jobs in the Spanish Town Freezone following the Jamaica Promotions...

Government urged to call elections as firms and consumers express impatience over rate of growth

The government of Jamaica is being urged to call the General Elections as soon as possible following a lull in consumer and Business Confidence.

Excellence by Design

No serious business leader would admit to targeting mediocrity as a goal in the running of his business. The fact however is that, unless...


Regional

The Week Ahead

Company Reports

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Contents

Trinidad and Tobago: Central Bank releases US$500m into the financial system

The Trinidad and Tobago Central bank has been lauded for its latest injection of US$500 million into the country’s financial system with the aim…

Antigua and Barbuda: IMF Staff Completes 2015 Article IV Consultation and Fourth Post-Program Monitoring Mission

The deal between the government of Antigua and Barbuda and the International Monetary Fund is now under review following last Friday’s end of…

Businessuite Event Calendar

Compilation of reports made by various companies to the Jamaica Stock Exchange regarding Mergers, Acquisitions, purchases and distribution of shares

Content DirectorKayla Wright

The Businessuite News Centre BNC

Publisher and Editor in ChiefAldo [email protected]

Subscription and Distribution

Advertising [email protected]

Graphic Design and Layout: Bonito Thompson

Photo credits Sourced from the internet and contributed

Social MediaCLICK Digital Agency

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ISBN NumberISSN 0799-4427

CreditsFinance

19 115,000 Public Service Workers To Benefit From Cash Back Reward To Ease Financial Pressure

Within the next three weeks, a total of 115,000 public service workers will be beneficiaries of the Team Jamaica Valucards, offering cash back…


Editorial

Several days ago, I was greeted with somewhat disturbing news. I was informed by a family member that they had gone to a furniture and appliance store and had been able to access the account I had with that company. She had been able to tell me what they said was on the account and the amount I had in arrears.

When I went into the office a few days later, I was given what I deem to be a sorry excuse of ‘Oh that shouldn’t have happened. We have strict policies against sharing customer information. We are so sorry that happened.’

Now I am a reasonable person with nothing to hide, however, I do feel violated when information which I deem private is shared with anyone that enters an establishment with my name and number.

As costumers who enter an arrangement with a company by going through several modes of verification, I expect that we all believe that we do it with a level of trust and an assurance of privacy. So why then do employees of such institutions feel that it is okay to share that personal, private information with third parties? Considering the likelihood of that to take place, as well as the consideration that these actions reflect a hope on the employees’ side to further their own agenda, I am insulted, to say the least.

Not only am I of the view that you have no respect for your ‘dear customers’, but I am also no longer interested in continuing business with your entity, and have no desire to re-engage your services in the future.

So what is left for such a company and others like it?? While the likelihood of my own involvement with your company is unlikely, there are other individuals who do continue to find your products and offerings appealing. The only advice I dare give is this, reevaluate and update your current customer service policy. Customers should not have to continue to live in uncertainty regarding the possibility of some third party having access to the information share with your company in trust. BM

r

By Kayla Wright

I do feel violated when information which I deem private is shared with anyone that enters an establishment with my name and number

can access that information.

Customer Privacy and its place in the Goods and Services Industry


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Other messages from external users not on their friends list will arrive as a message request.

Facebook to Remove “Other” Messages Folder

Technology

Social Media network, Facebook will over the coming days begin efforts to phase out the ‘other’ messages folder. The company will instead replace the folder with a “message requests feature,”

which will require the Facebook user to approve or deny unfamiliar messages sent to them. According to vice president of messaging products at Facebook, David Marcus, “we’re removing the ‘Other Folder’ ... and are enabling you to accept or ignore new requests without the requester knowing you’ve read their message”. He says all messages sent from people on a user’s friends list will come to their normal inbox. Other messages from external users not on their friends list will arrive as a message request. If the Facebook user chooses to approve the message, they will be able to read it and reply to it. If they want to deny it, they can simply click ignore and the message will disappear. The need to remove the folder stems from complaints by some members about harassment and spam gaining increased visibility. Facebook users who run groups are also affected as they often communicate with group members who are not friends. Facebook said it had introduced the Other Messages folder in order to help users get rid of unwanted messages in their inboxes. The folder was only accessible through the desktop version of Facebook, and there was no alert or notification when a new message appeared in the folder. BM


In an issue of Newsweek Magazine, Stefan Theil explored the implication of these demographic shifts in developed countries. In USA and Europe, they are beginning to look at making serious adjustments to their pension plans and prescribed retirement age. Not too long ago, Belgium, Italy and France experienced massive protests against pension reforms that would have, among other things, raised the retirement age. Many firms are already preparing for the demographic shift. In Japan, the world’s most rapidly aging society, the number of people between 15 and 64 is expected to decline by an average of 740,000 a year for the next decade. Corporations like Canon and Mitsubishi have already started rehiring their own retirees, as the pool of young job applicants shrinks. The trends are the same all over the developed world.

Contrary to still widespread stereotypes, there is very little hard evidence to suggest that companies cannot stay competitive with a rising share of older workers. When Danish retailer Netto set up three “oldie” supermarkets, where at least half the staff is over 50, absenteeism went down and customer satisfaction up. The same thing happened at British hardware chain B&Q, whose “elder worker” stores in Manchester and Exmouth were 18 percent more profitable than its regular outlets—due in part, the company says, to six times less employee turnover and 60 percent less pilfering and breakage. These are meaningful numbers.

To get around one of the main drawbacks of pay systems that often award workers based on seniority more than performance, some companies are introducing “peak wage” contracts that gradually reduce pay past the age of 55 or 60, often combined with fewer working hours. That kind of flexibility is becoming increasingly popular in Japan, where Nomura Securities in December became the latest company to announce such a programme. Since April 2006, all employees who wish to work past retirement can be rehired after 60 at more-flexible hours and pay, and often in a different job.

The surprising news for many younger workers who are dreaming of a life beyond the “rat race” is that most seniors are happy to be

The End of Retirement As We Know It (Part 2)The Leading Edge of the Crisis

Dr. Leahcim Semaj

Leadership

working. In America, two thirds of the ’working retired’ say they return to the job because they want to, not because they have to. When Finland raised the retirement age in the 1990s, polls showed that most Finns saw working longer as an opportunity to stay integrated in a social life often centered on the workplace.

The Crisis For Jamaica

My prediction is that Jamaica and other developing countries will also be impacted in other ways. The developed world will soon begin to adjust their immigration policies to attract more young skilled persons from high birthrate countries. So while we prepare ourselves for the longer work life and more flexible hours, we will need to also considerably increase the number of people who leave secondary schools who are able to meet matriculation criteria. This will allow us to increase the number of our skilled and professional classes to not just replace those who choose to migrate but to meet our own local needs. We will also be able to enter into bilateral arrangements with organizations and companies in low birth rate countries to train people specifically for their needs. This will ensure that they pay for the training provided and that Jamaica is compensated. As the price for sugar and bananas go down, we would get a premium for educated and skilled Jamaicans. Capital in its human form is indeed the most valuable and as I have said before our only competitive advantage in the world to come resides in our minds.

The Jamaica Employers’ Federation has recognized Dr. Semaj for “Leadership in Innovative Workplace Practices”. He is included in Peter Ferguson’s publication CHANGE MAKERS as one of the 101 men who have helped to define modern day Jamaica. This Psychologist combines ancient wisdom with contemporary ‘livity’ to bring fresh insight to old human problems. As a Transformation Specialist he offers two options – ABOVE or BEYOND. Above where you presently are or Beyond your wildest dreams.

By Dr. Leahcim Semaj

…there is very little hard evidence to suggest that companies cannot stay competitive with a rising share of

older workers.



Cover Story

Digicel Ready for the Challenge:


Unbothered by Liberty Global/

Cable and Wireless buy out talks

Digicel Ready for the Challenge:

“unbothered. We can see from the chatter that something is bound to happen, but whatever it is, we’re ready for them.”

Denis O’Brien

Chairan of Digicel


unbothered. We can see from the chatter that something is bound to happen, but whatever it is, we’re ready for them.” Those are the words of Digicel Chairman Denis O’Brien when questioned about the recent reports of buyout talks

between Cable and Wireless and Liberty Global. Speaking to our reporters following a “Reasoning with CEO’s” Series, orchestrated by the Mona School of Business Management last week, the Digicel Chairman said Digicel has already invested too much in Jamaica to not put up a fight if the talks are successful.

Buyout talks The Digicel Chairman’s comments follow last week’s reports that Cable tycoon John Malone’s Liberty Global PLC is in talks to acquire Cable & Wireless Communications PLC. The takeover deal is reportedly aimed at widening Liberty Global’s presence in the Caribbean and elsewhere.

Both companies have confirmed the discussions and Liberty Global has until November 19 to either make an offer or to announce that it does not intend to buy the company. Both companies are also due to report results this week, with CWC’s figures due on Thursday, and Liberty Global’s on Friday

The deal comes less than a year after Cable & Wireless paid about $1.9 billion in cash and stock for Columbus International Inc., in which Malone owned a stake. That deal handed him a 13% voting stake in Cable & Wireless. Following the announcement, Cable & Wireless shares rose 21% to 70 pence in London.

It is believed that the move is fueled by Liberty Global’s past focus on the need to offer a “quad play” eventually in all its territories. Cable & Wireless, which has more than six million subscribers, offers pay-television, Internet, landline phone and wireless service.

“Digicel has already invested too much in Jamaica to not put up a fight if the talks are successful.”

Denis O’Brien

Chairan of Digicel

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Ready for the Challenge

Since the talks have been reported, concerns have been raised that the Liberty Global-CWC deal could be a nightmare scenario for Digicel. According to a report in the Irish Times, with Digicel’s mobile revenues being eaten up by internet applications such as Snapchat and Facebook, the company needs to move into broadband and cable television. However, it says the problem for Digicel is that Liberty Global is a major participant in the cable television industry. However, O’Brien says Digicel is ready for whatever challenge is put against it. The Digicel Chairman says Digicel is “number 1 in 21 markets around the world. We’re the strong player here in 14 or 15 markets. We have more market share than Cable and Wireless so we can compete with Cable and Wireless, with Flow, everybody. If you take Calos Slim we can compete with him, we can compete with Telefónica, we can compete with Millicom. We can compete with anybody and are well up for the competition”. O’Brien says Digicel is fueled by the competition, “that’s what it’s all about. It keeps us strong”.

No Affiliation plans

O’Brien has also shot down the possibility of any form of consideration between himself and past competitors such as Carlos Slim (with whom he had competed with during the times of Claro in Jamaica) should the Liberty Global-Cable and Wireless talks be successful. According to the Digicel Chairman, Digicel is a brand of its own. He says he does not forsee any alliances with any other entity as Digicel is successful enough to stand on its own against any challenger.

O’Brien says “it is up to the Shareholders of Cable and Wireless to say whether it is a good deal, Digicel is an independent company. We will not be entering any partnership or talks with anybody. We have our own strategy with a big investment plan for Jamaica and the wider Caribbean. We keep going on our own. We prefer to go on our own and we don’t see the need for any kind of partnership whatsoever”. BM

“We (Digicel) will not be entering any partnership or talks with anybody. We have our own strategy with a big investment plan for Jamaica and the wider Caribbean..”

Denis O’Brien

Chairan of Digicel


Politics and the Economy

The government of Jamaica is being urged to call the General Elections as soon as possible following a lull in consumer and Business Confidence.

Speaking at last week’s release of the 3rd Quarter of the 2015 Business and Consumer Indices, noted pollster, Don Anderson highlighted that while there is no statistical proof, it is believed that the current lull in economic growth and confidence of consumers and business are due to the current election preparations. He says this is further affected by what he characterizes as an increase in the discussions surrounding the upcoming elections. He says this is overshadowing necessary economy discussions and thus impacting thinking.

Supporting the recent call of President of the Jamaica Chamber of Commerce ( JCC), Warren McDonald for a fixed Election date, Anderson said the concept has proved successful in many jurisdictions. He says if the government considers this option, businesses will be better able to plan their operations with this in mind.

Consumer Confidence Retreats According to the latest indices, Consumers are losing patience with the rate of growth the country is experiencing. Anderson says consumer confidence eased off the higher levels recorded in the first half of the year as ‘consumers became more concerned about the meager number of jobs produced by the stubbornly slow pace of economic growth’. The pollster says consumers have also become more pessimistic about recent changes in the economy and are likely to expect the economy to worsen in the year ahead.

Meanwhile, Anderson says less than 1% of consumers reported that jobs were currently plentiful while 86% reported that jobs were in short supply. He says the consumers are disappointed in this ‘job growth’ and are concerned that income gains are slow. BM

Government urged to call elections

as firms and consumers express impatience over rate of growth

Don Anderson speaking with members of the JCC



Business Environment

No serious business leader would admit to targeting mediocrity as a goal in the running of his business. The fact however is that, unless deliberate steps are taken to pursue excellence, mediocre results will be

inevitable. In other words, excellence is not likely to result by default or by accident. It follows therefore that if there is no determined effort with the specific intention to achieve excellence, you could be inadvertently setting mediocre expectations through your actions or focus. Given the challenges of the Jamaican business environment, it is easy to see business executives being preoccupied with the arduous task of merely surviving. Over many years of being under the same pressure, survival becomes the game. Employees are set near-term targets that are just enough to deliver minimally acceptable outputs. These near-term targets generally reflect management’s pessimistic outlook of the so-called difficult business environment and eventually get worked into the company’s budget. The practice of setting and chasing low targets can easily cause the entrenchment of mediocre performance. Some managers are even known to forego opportunities that could result in significantly higher performances so as not to raise the future expectations of their superiors. This kind of performance pacing facilitates under-performance since targets are set at the level where average performers can thrive. It however eventually leads to a breakdown in respect for management, as staff comes to realize and despise the slackness of the leadership. Holding a business in a protracted cycle of low target, low performance outcome is ill advised. It is critical that it be moved from that state of affairs to one of expectation

Excellence by Design

By Ronnie Sutherland

Strategy Consultant and Media Executive

of excellence. This is essentially transforming from an outmoded arrangement to a culture of excellence. It is expected that in a culture of excellence, organizational capacity will be created in a structure that empowers, focuses and engages the employees. Employees will no longer be compared to each other in assessing output, rather each employee’s output will be assessed against his or her own potential. The idea behind this approach is to push the employees to their full capacity, which in turn increases the capacity of the organization. Building a corporate culture of excellence is easier said than done particularly as it relates to the Jamaican context. It is widely believe that attitude towards excellence in the country generally varies from a high of indifference to a low of hostility. It is Jamaicans with that attitude that predominantly makes up the pool from which local businesses must select their workforce. Given their negative attitude towards excellence as an approach to doing things, the task of transforming them through training is made that much harder. This highlights the need for the society as whole to be fully oriented to the pursuit of excellence as a worthwhile ideal. Our educational institutions must play a pivotal role in the process of orienting the society to accepting the pursuit of excellence as a way of life. As it stands now however, the hostility towards excellence is rampant in the nation’s high schools. There is an abundance of evidence of potentially high performing students selecting to under achieve with the hope that they will fit in with average achievers. They do this with the explicit purpose of avoiding the harassment and alienation from the dominant mediocre class of students. It is no mystery therefore why mediocrity is so rampant in the Jamaican workforce. People in the workforce who select to work hard and commits to

Holding a business in a protracted cycle of low target, low performance outcome is ill advised.


excellence are oftentimes This highlights the daunting task associated with building a culture of excellence in Jamaican organizations. The process is not for the faint of heart. It starts with the bold and fearless rejection of mediocrity as an option. New standards of performance are set at levels that challenge employees. Some leaders in classifying the different tiers of performance specifically identify a level they call mediocre. Employees are made to understand that performance at that level will not be acceptable. This raises the question of how management and staff relate in the building of a culture of excellence. Most companies unconsciously concentrate on problem solving and end up rewarding mediocrity. In fact, many managers actually empower their low performers by focusing their time and energy on trying to solve their problems—while ignoring their high performers. Those high performers eventually leave because they aren’t being rewarded for their hard work. Companies with a Culture of Excellence set an expectation of high performance organization-wide. Every employee is supported and encouraged to become a master in their role and area of expertise. High performers are nurtured, rewarded, mentored and recognized, and average performers are coached to

Most companies unconsciously concentrate on problem solving and end up rewarding mediocrity.

move into the high performance category. In these cultures, there is no place for low performers, and they either move up or leave the organization. It’s not enough to simply have a stated organizational vision. To achieve a Culture of Excellence, every employee must understand not only the company’s vision, but also know their own roles, responsibilities and the specific actions they need to take in order to help achieve this vision. In a Culture of Excellence, employees feel that what they are working on is meaningful, significant, and purpose-based. Everyone concerned is highly inspired by the common purpose, which becomes the driving force behind everything that they do. The outcome of employees in a company being driven by the common purpose is one of the extraordinary benefits of operating in a culture of excellence. It provides the foundation for active collaboration and teamwork. Employees harbor no fear of the outstanding performances of others. In fact they welcome and support them. Because everyone knows what is required him, the benefit is one of employee empowerment. A significant challenge to leaders in a culture of excellence is how to sustain it and not allow employees to slip back to their old habits.


Arab Emirates, India, Dominican Republic, Singapore and China. Meanwhile, General Manager of CNAICO, Liu Xiadoa says he believes it was fate that allowed discussions to get underway between CNAICO and Masada during the Feria Internacional de la Habana (FIHAV) show in Havana in 2013. He says “it could not have been by chance that they made their case so well that we reconsidered opening operations at the Mariel Economic Zone in Cuba and instead chose the Spanish Town Freezone”.

What makes this investment so different? According to the head of the Logistics Hub Initiative, this time around, Jamaicans can be more hopeful regarding the future of the Spanish Town Freezone. According to Deans, unlike many other initiatives, the Freezone is not just an announcement; he says work is already underway with the area already seeing an 85% commitment rate. Deans says it is expected that after completion of the first stage next June, the Spanish Town Freezone will see a 100% commitment from investors.

Spinoff for MSMEs Meanwhile , Micro Small and Medium sized enterprises are being urged to take advantage of the opportunity to grow their own businesses. The JAMPRO President says too many times, MSMEs are too passive when trying to push their businesses. She says now is the time that action needs to be taken. Edwards says MSMEs need to ensure that they take the opportunity to make themselves a necessity to the companies occupying the Spanish Town Freezone. BM

Investment

2,500 high level jobs to be made available to Jamaicans following US$350m investment

in Spanish Town Freezone

At least 2,500 Jamaicans are to benefit from the availability of high level jobs in the Spanish Town Freezone following the Jamaica Promotions Corporation’s ( JAMPRO) facilitated investment totalling over US$350 million.

Speaking at a press briefing last week, to announce the Spanish Town Free Zone, President of JAMPRO, Diane Edwards, said the facility is being set up under the Jamaica Logistics Hub Initiative, to leverage Jamaica’s connectivity to manufacture products for regional markets. She says “the Logistics Centre being built in Spanish Town is expected to make a significant contribution to the community, and Jamaica as a whole”. According to Chairman of the Logistics Hub Task Force, Dr Eric Deans, the operation, which will be delivering scores of high paying jobs, is a joint venture involving Gulfray Americas and China National Automotive Industry International Corporation (CNAICO). He says it is also expected that during the development of the location, an additional 7,500 jobs will be available for qualified workers. Activities at the Freezone operation which will be administered by Masada Jamaica Limited include refining and regeneration of petroleum products; manufacturing of composites and insulation material; vehicle assembly; auto parts remanufacturing and distribution; manufacturing of pharmaceuticals and nutraceutical products, as well as research and manufacturing of tobacco products. Executive Director for Masada Jamaica, Dr. Robert Melamede says the companies are “able to maximize on Brand Jamaica, the logistics thrust of the island, its workforce and its strategic location in the heart of the Americas”. He said so far, agreements have been reached with companies located in the United States (US), United

MOU Signing for Spanish Town Freezone


Within the next three weeks, a total of 115,000 public service workers will be beneficiaries of the Team Jamaica Valucards, offering cash back rewards.

According to Minister without Portfolio in the Ministry of Finance, Planning & the Public Sector, Horace Dalley, already 45,000 public sector workers have been issued with the Valucard and an additional 70,000 swipe cards are to be distributed over the next three weeks. He says the cards, which forms part of the Government’s effort to help ease the financial challenges being faced by the public sector workers in the wake of the latest wage negotiations , are to be used primarily for the purchase of groceries and other consumer items, as well as to pay health care and utility bills.

Minister Dalley says ten companies have already agreed to participate in the programme, including Progressive Grocers stores & Shopper’s Fair Supermarket chain; Tastee; IGL; VMBS; Bert’s Auto; Fontana Pharmacy; Medical Associates; Wisynco; Lasco and Mailpac. ePayment Group (EPAY) – the technology company behind the initiative – says it is expecting to recruit and equip over 1,500 merchant locations to participate in the programme.

According to Director of ePayment Group Limited, Peter Chin, this is the first programme of its kind in Jamaica and has been two years in the making. He says the cash back reward being provided by retailers to the public sector workers is aimed at increasing the purchasing power of this group of employees, without impacting the public wage bill and, thereby, contributing to the economic stability of Jamaica.

All public sector workers are to be provided with a free Valucard by EPAY. The cards are issued to the Human Resource Managers at the various Ministries and Statutory Organisations, who are in charge of distribution to each public sector worker. Registration is done on line using a smart android telephone and activation is immediate on completion of the registration process.

Once the cards have been activated, they can be used at any of EPAY’s participating merchants by swiping the card when making a purchase. A cash back amount would then be added to the card in keeping with the arrangement between EPAY and the merchant. The cash back is loaded directly onto the card by EPAY on receipt of payment by the individual merchant. That cash can then be tendered at any of the participating stores. BM

Finance

115,000 PUBLIC SERVICE WORKERS TO BENEFIT FROM CASH BACK REWARD TO EASE FINANCIAL PRESSURE


K

Company Reports

Eppley Limited Eppley Limited (EPLY) has advised that its Board of Directors will meet on Thursday, November 12, 2015, to consider the payment of an interim dividend to stockholders.

Desnoes & Geddes (DG) Desnoes & Geddes (DG) has announced that Cedric Blair has been appointed General Manager for the Caribbean and Central America effective November 19, 2015.

GraceKennedy Limited (GK) GraceKennedy Limited (GK) has advised that the Board of Directors at a meeting to be held on Thursday, November 5, 2015 will consider a resolution for the declaration of a dividend payment in December 2015.

Access Financial Services Limited (AFS) Access Financial Services Limited (AFS) has advised that the Board of Directors declared the payment of an interim dividend of $0.12 per share, to shareholders on record as at November 12, 2015 payable on November 26, 2015. The ex-dividend date is November 10, 2015.

Pulse Investments Limited Pulse Investments Ltd has filed its audited financial statements with the Jamaica Stock Exchange. The company says it has increased its profits for year ended June 30, 2015 by 25,7%, up to $219.5m from $174.6m in prior year. Revenues increased by 21.6% to $433.2m, up from $356.0m in 2014. Meanwhile, earnings per share was 74c, compared to 59c in year ended June 30, 2014.

The company also completed 9,000 sq ft of function space at Villa Ronai, inclusive of furnishings, with works and fittings valued in excess of $108m. The space, completed over the past two and a half years, consists of two lounges, meeting rooms and other function areas.


November 04

JAMCOPY #theOnlineMind: Caribbean Digital Publishing Conference Venue: The Jamaica Pegasus Hotel, 81 Knutsford Boulevard, Kingston 5

JAAP Kingston Chapter Meeting Venue: Ridgemount Church Hall, Mandeville, Manchester Kiwanis Club of New Kingston Venue: Institute of Chartered Accountants, 8 Ruthven Avenue, Kingston 10

November 05 International Project Management Day 2015 Venue: : Knutsford Court Hotel JAMCOPY #theOnlineMind: Caribbean Digital Publishing Conference Venue: The Jamaica Pegasus Hotel, 81 Knutsford Boulevard, Kingston 5

The Week Ahead

November 02

JAMCOPY #theOnlineMind: Caribbean Digital Publishing Conference Venue: The Jamaica Pegasus Hotel, 81 Knutsford Boulevard, Kingston 5 Rotary Club St. Andrew North Venue: Wyndham Hotel New Kingston

November 03 JAMCOPY #theOnlineMind: Caribbean Digital Publishing Conference Venue: The Jamaica Pegasus Hotel, 81 Knutsford Boulevard, Kingston 5 International Hydrogen Conference Venue: University of Technology Papine Campus

Rotary Club of Mandeville Venue: Golf View Hotel, 5 1/2 Caledonia Road, Conference Room, Mandeville, Manchester

Businessuite Event Calendar5


Trinidad and Tobago:

Central Bank releases US$500m into the financial system

The Trinidad and Tobago Central bank has been lauded for its latest injection of US$500 million into the country’s financial system with the aim too ease the shortage of United States dollars at local commercial banks.

According to the American Chamber of Commerce of Trinidad and Tobago (AMCHAM T&T), it has been articulating this position as “a first step towards ameliorating the persistent foreign exchange shortage.” However, it says it will wait and see what effect reverting to the old system of foreign exchange distribution will have.

AMCAHAM also welcomed the announcement that Finance Minister Colm Imbert had directed the bank to re-esta¬blish the previous distribution system of foreign exchange that was in place up to March 2014. The Central Bank said in its statement that Imbert issued the directive to go back to the previous system on Monday “after consultations” with Central Bank Governor Jwala Rambarran.

AMCHAM T&T says it looks forward to further dialogue with Imbert as well as all other key stakeholders to chart the way forward on the matter, which it describes as a “very critical issue as we consider its deleterious effect on trade and investment in Trinidad and Tobago.”

According to the Central bank, “…pursuant to the powers granted under Section 3 (2) of the Exchange Control Act and Section 50 of the Central Bank Act, and after consultations with the Governor, the Minister of Finance on October 26, 2015, issued special directives to the Central Bank on the domestic foreign exchange market,”. It said it had re-established the foreign exchange distribution system that was in operation as at March 31, 2014. According to the bank, this change is effective October 29, 2015. It says the minister had also consulted with the commercial banks to ascertain the foreign exchange queues for trade-related purposes on their books (after eliminating double counting), and will make a special injection of US$500 million on October 30, 2015 to immediately clear these queues.

This latest move comes one year and four months after former Minister of Finance Larry Howai announced the Central Bank had “agreed” to an injection of US$200 million into the system which has been subject to widespread complaints. BM

Regional


The deal between the government of Antigua and Barbuda and the International Monetary Fund is now under review following last Friday’s end of the IMF Staff’s 2015 Article IV Consultation and Fourth Post-Program Monitoring Mission.

Speaking following the mission, Mission Chief, Meredith Arnold McIntyre, said growth is expected to decelerate this year despite a surprised upside last year. She said the economy grew at 4.2 percent in 2014 on the back of strong public sector, construction, wholesale and retail trade activities. She says at the same time, credit to the private sector, which contracted by 5.6 percent for the year ending June 2015, continues to be a drag on growth. However, McIntyre says she expects that economic activity is expected to decelerate in 2015 to a growth rate of 2.2 percent in light of the 3.6 percent decline in tourist arrivals in the first half of the year and the weaker construction activity.

The IMF Mission Chief says despite an improvement in fiscal performance in 2015, financing pressures remain acute. She says the underlying primary balance, excluding the citizenship-by-investment program revenues and bank resolution costs, is projected to register a small deficit of 0.2 percent of GDP in 2015, compared with a deficit of 2.0 percent in 2014. She says this mainly comes on the back of higher corporate income tax collections, higher consumption taxes on fuel (owing to the limited pass through of the decline in international oil prices), and under execution of the capital budget. However, McIntyre says the limited sources of available financing on account of Antigua and Barbuda’s elevated debt levels, the central government continues to cover financing shortfalls through the accumulation of arrears, which are projected to rise by 2 percent of GDP in 2015.

McIntyre says she believes strong inflows from the Citizenship by Investment Program (CIP) have helped ease financing pressures. However, she says CIP revenues are inherently volatile, and carry risks of a sudden stop. Consequently, she says the prospect of CIP inflows should not weaken the government’s resolve to undertake strong fiscal adjustment measures to durably improve the public finances. McIntyre says CIP revenues should not be used to fund recurrent government expenditure but rather to clear arrears, pay down debt, build buffers, and fund key strategic infrastructure projects.

According to the Mission Chief, the suggestion is being made that regarding an accountability framework for CIP-related resources to ensure their prudent use and management. BM

Antigua and Barbuda:

IMF Staff Completes 2015 Article IV Consultation and Fourth Post-Program Monitoring Mission


Documents

Businessuite Digital Weekly 2nd November 2015