T&T should play an integral role in BAICO matter, says Gonsalves

Prime Minister Dr. Ralph Gonsalves is of the view that Trinidad and Tobago should play a more integral role in the resolution of the Colonial Life Insurance Company (CLICO)/British American Insurance Company (BAICO) debacle.{{more}}

Gonsalves said that the failure to address the issue would have a knock-on effect on the CARICOM neighbours in a number of critical areas if not addressed.

“Firstly, the extent of the trade done between us and Trinidad and Tobago and secondly, the extent of the ownership of companies by Trinidad and Tobago companies inside St. Vincent and the Grenadines, including in areas of banking and insurance, but not only in those areas,” said Gonsalves.

He further stated that Trinidad and Tobago, as the most endowed state in the Caribbean with natural resources, has an obligation under the revised Treaty of Chaguaramas to be more involved.

Gonsalves, at a press conference last week, disclosed that he had made a request for the issue of CLICO/ British American be discussed at the next inter-sessional meeting of CARICOM, which is slated for February 25-26, in Grenada. He contended he wanted the issue to be placed on the front burner, because it is a matter that is being ignored by the regional leadership for too long.

“Since the BAICO/CLICO collapse took place in late 2008, we have had meetings of CARICOM and they haven’t come up for any discussion or any focused discussion… and that would have happened again if St. Vincent and the Grenadines did not request that British American and CLICO be put as an agenda item.”

During the press conference, Gonsalves outlined further reasons why he believed that Trinidad and Tobago should be showing leadership on the issue.

“The mind and management of British American was in Trinidad. British American and CLICO are subsidiaries of CL Financial, which is based in Trinidad.

“Right here in St. Vincent and the Grenadines, they gave us a note of US $46 millions in the statutory fund to keep the statutory fund liquid, but there is a problem with that note because of what has happened to CL Financial. So they owe us about US$60 million in the sub-region.”

Gonsalves stressed that the collapse of CL Financial is mainly due to the “colossal failure” of corporate governance, reckless excessiveness, and risk taking by CL financial in Trinidad.

The Prime Minister said that he had raised these points before, and indicated that he was ‘not picking any fights’. He, however, stressed that leadership has got to be exercised.

“That is why I believe that (Finance) Minister (Winston) Dookeran in Trinidad understands that Trinidad and Tobago has to play an important role in this regard,” said Gonsalves.

“The asset shortfall in British American and CLICO, it poses a clear and present danger to the stability of all our financial systems in the Eastern Caribbean; and anywhere you have that manifesting itself fully without it being contained, it will certainly have a knock-on effect of Trinidad and Tobago,” Gonsalves added.