Caribbean & Central America - 17 February 2004

Basdeo Panday of the opposition United National Congress (UNC) has been using the issue of the Caribbean Court of Justice (CJJ), which is to replace appeal to the UK-based Privy Council as part of reforms associated with setting up a Caribbean Single Market and Economy (CSME) by 2005, to demand fundamental constitutional reform in Trinidad & Tobago.

Panday says that the existing constitution is inadequate and that piecemeal reform is not enough, and he has made support for the government's legislative agenda dependent on agreement to constitutional reform. With this as the background, Panday met with Prime Minister Patrick Manning on 10 February for exploratory talks on the constitution. Manning described the talks as 'very cordial' and said there would be follow up talks soon. In a separate development, Panday announced on 8 February that he would be going back on his earlier pledge to stand down as party leader when he reached 70 (which he did last May). He told party workers: 'I have heard your request that I stay on as political leader of the party. I bow to your wishes.'

• Barbados has reacted to the arrest of two Barbadian fishermen in Tobago waters on 6 February by imposing immediate sanctions on Trinidad manufactures. Following an emergency meeting on 9 February, Barbadian Prime Minister Owen Arthur announced: 'With immediate effect [Barbados] will accord to Trinidad and Tobago goods imported into our economic space the same terms and conditions that the Trinidadian authorities are extending to our fishermen in Trinidad and Tobago's economic space.'
• On 5 February Standard & Poor's downgraded Jamaica's long-term local currency sovereign credit rating from B+ to B, with the outlook on its long-term ratings also being downgraded form 'stable' to 'negative'. The credit-rating agency cited Jamaica's growing debt burden for the downgrade, saying that the target for the general government deficit this year of 7.6% of GDP could only be achieved if there were major cuts in capital expenditure. The agency said a further downgrade was possible if the fiscal deficit was not reduced this year. [See the January issue of Caribbean & Central America report for a full analysis of Jamaica's economic prospects.]
• Trinidad's Prime Minister Patrick Manning said on 2 February that plans for an intra-Caribbean gas pipeline (ICGP) could not be implemented without the participation of Martinique and Guadeloupe as they would take over 70% of the gas output. Discussions are being held with Electricitie de France about the possibility of converting the two French-speaking islands to natural gas. According to Manning: 'The proposed ICGP could potentially see a reduction of 30% in energy costs, including electricity, and would guarantee these countries price stability and predictability over the medium to long term.'
• Moody's Investors Service has assigned a B1 foreign currency country ceiling and a B2 foreign currency bank deposit ceiling to Suriname. Moody's says its ratings reflect the debt positions of both the government and the banking system and the potential political and financial volatility of the country. While investment in both gold and bauxite production is improving export prospects, imports necessary to support the increase in mineral production capacity have caused large current account deficits. Spending is also likely to increase significantly in the run up to elections next year.