Home' Trinidad and Tobago Guardian : May 14th 2015 Contents MAY 2015 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
REGIONAL | BG19
Puerto Rico's governor is reviving his push
for a value-added tax despite previous
opposition from legislators as concerns
grow about the US territory's economic
crisis and the government's ability to
Governor Alejandro Garcia Padilla said in a surprise
announcement late Monday that he will again pursue
a new consumption tax to stabilise and boost the
island's economy. He spoke after meeting with leg-
islators from his party to ensure he has their sup-
Garcia, whose party controls the legislature, said
he will meet with additional lawmakers and govern-
ment officials Thursday to craft a final bill that he
believes will win approval. He did not release any
"We are going to resolve this crisis once and for
all," Garcia said. "Certainly, we'll have to take decisions
that many will consider difficult."
Legislators previously rejected Garcia's call for a
16 percent value-added tax. The island's House of
Representatives also voted against an alternative way
to raise revenue, including a 13 per cent goods-and-
Critics have said the island's economy cannot
handle a new tax despite Garcia warning it is needed
to stave off a possible government shutdown. The
US territory of 3.5 million people is in its eighth year
of recession and struggling with US$73 billion in
public debt, along with an 11.8 per cent unemployment
rate, the highest compared with any US state.
"The government keeps making the same grave
mistake with a fiscal policy that is based more on
taxes than cost reduction," Puerto Rican economist
Gustavo Velez said in a phone interview.
Puerto Rico's government faces a US$1.5 billion
shortfall as Garcia's administration prepares to submit
a proposed budget for the upcoming fiscal year. Senate
President Eduardo Bhatia said the government already
has taken difficult decisions in the past two years to
help boost the economy, including overhauling public
pension systems and seeking protection from a law
that would allow for public agencies to restructure
their debt or declare bankruptcy.
"We now find that is not enough," he said. "We
have become aware of the magnitude of the problem."
You won't hear anything about this nation today
when it comes to petroleum exploration. But it's a
place that might become a key story for oil and gas
That's the tiny Central American nation of Belize.
Last week the country's Ministry of Energy affirmed
that it is considering opening to exploration. Allowing
oil and gas drillers for the first time to test the offshore
and onshore environment here, just south of the Gulf
The plan was originally advanced late in 2014 with
officials saying they plan to open the entire country
to exploration. And last week the government noted
in a press release that it is continuing "dialogue on
the issue of oil petroleum exploration onshore and
offshore." Signaling that things are progressing when
it comes to offering the first-ever licenses here.
Such a move would be significant. Belize is a tiny
nation, slightly smaller than the state of Vermont;
but it lies near some big and proven hydrocarbon
Belize also has proven production closer at hand.
With fields in neighboring Guatemala currently
exporting oil via ports on the Caribbean.
All of which suggests there could be significant
potential here. Making the opening of first drilling
a potentially sizeable opportunity, especially for junior
There are still a lot of hurdles to meet including
final government approval of the plan for offering
petroleum licenses, and setting of dates and criteria
The plan for drilling is also contentious. With envi-
ronmental groups already protesting against potential
damage to offshore ecosystems, and tourism locales.
But if plans for licensing do gain momentum, this
is a spot to keep an eye on for new projects.
Chinese Premier Li Keqiang will visit South America
next week on a four-nation tour, the Foreign Ministry
said on Monday, a part of the world where China
has deep business ties but traditionally only limited
Li will travel to Brazil, Colombia, Peru and Chile
on the May 18-26 trip, the ministry said, without
providing other details.
Visits by top Chinese leaders are typically accom-
panied by impressive deals, especially in resource-
rich nations like Brazil and Chile.
China, the world's second-largest economy, is buy-
ing oil from Venezuela, copper from Peru and Chile,
and soybeans from Argentina and Brazil, for exam-
ple.In return, China has invested billions of dollars.
In January, Chinese President Xi Jinping pledged
US$250 billion in investment in Latin America over
the next 10 years as part of a drive to boost resource-
hungry China's influence in a region long dominated
by the United States. Reuters
The Antiguan Govern-
ment has accused one
of the country's largest
trade unions of trying
to deliberately mislead
bank employees into
taking industrial action
over the recently
passed Banking Act.
In a statement issued after being "reliably
informed" that Antigua & Barbuda Workers'
Union (ABWU) was encouraging staff mem-
bers of eight commercial banks to strike
this morning, the government said the
planned protest action was based on "delib-
erate misreading" of the definition of "offi-
cer" in the legislation.
The Gaston Browne-lead administration
said that "the attempt to mislead bank work-
ers into thinking that they are at risk of
being unfairly targeted is a deliberate political
ploy" and the employees were being used
Condemning any industrial action based
on false premises and insisting the move
would "unfairly and unjustly harm innocent
depositors, businesses and the economy of
the country", as well as bank workers and
their families, the government said: "Staff
members of the eight commercial banks are
encouraged to reject any effort to make them
pawns in a political game and to go to their
jobs on Monday morning, as usual."
The controversial Act has been passed in
several other members of the East Caribbean
Currency Union (ECCU), with all eight expect-
ed to adopt it. According to officials, it is
intended to make bank deposits by customers
However, bank workers in Antigua & Bar-
buda are concerned it could disadvantage
them. Prior to the passing of the legislation;
which gives regulators wide-ranging powers
to appoint and dismiss directors, grant licences
and take action to prevent the collapse of
banks in the Organisation of Eastern Caribbean
States; hundreds of them signed a petition
calling for changes.
In addition to concerns about the definition
of "officer", the workers and their trade union
also expressed worry over issues of sever-
Addressing the definition issue in its state-
ment, the government stressed that within
the new law "officer" was limited to the pres-
ident, the vice president, the chief executive
officer, the chief operating officer, the chief
accountant, the chief auditor, the chief invest-
ment officer, the chief compliance officer, or
the chief risk officer of commercial banks.
"Staff members of commercial banks who
do not hold any of these positions do not fall
within the definition; therefore, those staff
members need not fear any provision in the
law. Clearly, the law seeks to prevent officers'
in banks from using staff members as their
surrogates to undertake actions that usually
fall within the job descriptions of those officers.
A staff member in a commercial bank who
performs daily routines does not fall within
the net of officers, whose actions and decisions
are intended to be captured by the Banking
Act 2015," it said.
The government also accused the ABWU
of "intentionally lending an inaccurate mis-
reading to the adjusted language involving
the severance pay to which workers are enti-
It insisted that Parliament had added the
words "severance pay" to the act, which made
it clear that workers in banks would receive
the full severance to which they are entitled,
should a bank be liquidated.
Puerto Rico governor
Antigua govt deals
with bank strike threats
This tiny nation
could have huge
oil, gas potential
Big deals expected
when Chinese premier
visits South America
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