Caribbean Oil Spill – What if? By Eion Maison

The Caribbean economies would be adversely affected by the oil spill in the Gulf of Mexico should the prevailing winds and the uncapped orifice persist. The concern here is what if there should be an oil spill in the Caribbean, since the Caribbean sits far above possible oil bearing strata. What could we do? No, what should we do?
At present there is no active exploration of oil in the Caribbean, outside of Trinidad and Tobago, but the potential, and possibilities are likely. In the past there have been interest and geophysical research in countries such as Cuba, Guyana and Suriname, Barbados and Grenada, to name a few.
The risk of oil exploration in the Caribbean is exacerbated by the depth of the crude oil and the dearth of technology to manage such a project. The deep sea exploration possibilities work out to be over seventy five percent deeper than the 22,000 feet in the Gulf of Mexico presently.
The management of such a risk could be off set with an exploration fund in an escrow account supervised by the Caricom Secretariat and an experienced regulatory body. The conceptual and empirical issues should also be studied now, in preparation for yet another risk to our small Caribbean economies. Caribbean economists now have to examine through models and research, how much money should be kept in such a fund. There is a 1986 study entitled ‘Estimating the cost of Oil Spill from the Amoco Cadiz Incident’. This examines the principles of compensation and equivalent variation by Freeman, 1979 and Just et al.
To date, June 2010, the costs are quoted at $1.25 billion dollars in containment efforts and cleanup with a possibility of this cost tripling in the coming weeks and months. Caribbean states are now informed of the risks and response on yet another disaster that could affect all of us, should we not hedge it.

Bookkeeping Form

This is a form that can be adopted to churches or any SME to account
for revenues only. What is important here is the promotion of transparency
and best practices for accounting in general.

Name of Organization Date_____________
Bills and Coins

DOLLARS
US Bills Qty Amount Total

100.00
50.00
20.00
10.00
5.00
1.00

Total Bills ______


GUILDERS
Fls Bills Qty Amount Total
100.00
50.00
25.00
10.00
Total Bills ______


US COINS Qty Amount Total
0.25
0.10
0.05
0.01
0.01 ______


Fls COINS Qty Amount Total
1.00
0.50
0.25
0.10
Total Coins ______

CHECKS
Check No. Bank Amount






TOTAL CHECKS ______


TOTAL COLLECTIONS____________________

Cash Counted By: Witnessed by:

__________________ _____________________

A CRISIS OF ETHICS and MANAGEMENT BY Eion Maison

Managing risk is the renewed task of management in the financial industry. The austere regulation of the financial industry seem to be the norm for small and medium financial corporations, while for big investors and with financial businesses there seems to be a laxity in supervision – perhaps because these large firms can afford to hire specialist of all sorts and experiences, they are expected to police themselves.
It is true that a systematic approach to enterprise risk management can produce business benefits which extend far beyond compliance, but the lack of ethics on the part of management only serves to expose the institutions and the investors to more than risk. Therefore, crisis of ethics in management is bad for the financial firm and worst for the industry.

Matrix of Global Financial Crises by Eion Maison

The Global Financial Crisis is all that we hear about lately. It is the concern of all of society, especially for academics. Business schools will now have to use dynamic financial analyses and real world variables in some new equations.

Before we consider all of the dynamic approaches and very best practices, let us look at what is happening around the globe. Please find below a summary of the results of the Global fallout by country.
My intention is to develop a matrix to show what we can learn from this phenomenon. But here is a summary in selected countries of the FALLOUT, EFFECT AND GOVERNMENT OR COPORATE ACTION.

Anguilla: Treasury Bill and Development Bonds Bill passed in the House of Assembly on February 18. Bills will be sold via Eastern Caribbean Stock Exchange. The hopeful result being more liquidity.

Antigua / Caribbean: (Including Antilles)Stanford Bank fraudulently selling $8 billion in high yield certificate of deposits. Many wealthy individuals, companies and investors deposited upward of US $100,000 each. ECCB tries to prevent a run on the local bank and reveals tight monitoring by itself and the Government of Antiguan and Barbuda. ECCB has taken control of the bank.

Russia: Global slowdown fuelling social unrest.Dented faith in the Kremlin’s economic stewardship. Resulted form sharp fall in oil prices. The problem led to liquidity crunch resulting in heavily indebted companies. Under performing officials fired.

St. Maarten: Diamond Resort closes sales office. Sisteen (16) workers severed. Company offered severance package. Government's Social Economic Initiatives (SEI) provide money of emergency marketing: Seven million guilders can be diverted or reallocated to give the first thrust to a comprehensive emergency marketing stimulus package. An estimated US $4.1 million is needed to intensify efforts to bring more tourists here.
Also, local insurance company NAGICO launches A-Team, based on sports model, to strive for excellence in performance.

Trinidad and Tobago: CL Financial Crisis - TT $10 billion statuary reserve deficit. Melt down of its financial services and subsidiaries. 51 staff altogether terminated. CL Investment Bank deposits and liability has been taken over by State Bank First Citizens and a new Board of Directors installed.

The world will be looking with interest at the various (positive) outcomes of the crises that face all economies and the resulting strategiesemployed by corporations, government, trade unions, commerce and tourism associations and all other stakeholders.

I plan to keep my students, subscribers, readers and all of blogosphere aware of how we are affected and what we can do in the situation. Much later in the series fucuss will be directed to the policy level of analysis.

Caribbean Stimulus Package by Eion Maison

There are many articles written by esteemed economists and columnist appearing frequently about the current financial crisis that hit the United States with rippling and perhaps crippling effects around the world, and in particuar the Caribbean.

As I read these articles I am thinking that it is about time that Caribbean Governments viz-a-viz Caricom come up with a regional solution that somewhat resembles a stimulus package.
Individually, Antigua and Barbuda has decided to establish an Unemployment Benefit Fund (UBF) to help those who have been laid off as a result of the global financial crisis.

I know that the rebuttal could be that governments are not financially able to make such a commitment, for all the right reasons; but bear me out on this. On the micro side of my own budget constraints, my mantra is that if it is budgeted it will most likely get done. The same, I think, citeris paribus, applies to the macro side.
This may sound as if I am recommending Welfare Capitalism. Well, maybe it is worth looking into. After all, Gustav Schmoller and other early economist may have seen this far into the future

Crime and Economics: Solution? by Eion Maison

Crime in the Caribbean is always a hot topic, with some islands receiving out right thumbs down for criminal activities of all types. However, the Caribbean, North and South seems to be doing much better, comparatively to some mainland countries. For example, I read in a blog called Cruisers Forum that the yachting industries are having more safety problems in other regions than in the Caribbean.

However, ceteris paribus, let us look briefly at the Caribbean. Francis Maertens, United Nations Office on Drugs and Crime (UNODC) Director, Division for Policy Analysis and Public Affairs said: “Although there is no one “ideal” approach for crime and violence prevention, interventions such as slum-upgrading projects, youth development initiatives and criminal justice system reform can contribute to reducing crime and violence”. This was the content of a WASHINGTON 2007 Report published today by the World Bank and the (UNODC). It further states that high rates of crime and violence in the Caribbean are undermining growth, threatening human welfare, and impeding social development.

In the Caribbean, like every where else we may not be able to prevent all crimes in the short run, but we can work on the present situation. And we are taking some action! The Jamaican Prime Minister Bruce Golding, reported that in 2008, “There has been a noticeable slowdown in the rate of murders…”
What was good about the report was that ended by listing the measures that they have taken. Vis-à-vis Additional vehicles, equipment, stepping up recruitment, increasing training, improving intelligence and, I think that this one is most important, improving the court system. The Prime Minister ended by saying that, “We must keep up the pressure for 2009”.

Every Caribbean island territory would have to apply pressure and keep the pressure up forever starting now, or for many islands, continuing in 2009. Antigua and other islands have adopted the Crime Stoppers Program. Over the last Christmas season St. Maarten initiated a crime prevention program in collaboration with a local security firm simply called Bicycle Patrol. While the list is diminutive, the colossal task is reducing crime, even if only for our tourism based economies sake. One small steady step is better than all the debate and headlines in the world.

What else can we in the Caribbean do? I have a suggestion myself. I am no expert in crime, but as an economist we are concerned with the high cost of crime on the micro and macro aspect of our societies. Antigua and other territories with high percentages of migrants from specific countries should send their cops on attachment to the respective countries, for example, if Guyanese is the largest group then work with police in Guyana, and the same for Jamaica and others as the case may be. According to the motto of the Association of Caribbean Commissioners of Police (ACCP), let us be “United Against Crime”.

CARIBBEAN OUTLOOK 2009

Happy New Year to all.

I took a long pause from this blog to finish up some work on my MBA.

However, I have returned with a new focus: The economic outlook for 2009 and what are some practical things we can do to reduce the impact on our personal budget. The first series of post will deal with the reasons, as I see them, for the bursting of the bubbles in the USA. Then we exam the practical solutions that we can use in the short run.

Look out for the next post entitled 'A Crisis of Ethics'.

Regards,
Eion Maison