Trinidad & Tobago: The Bailouts Begin

The global financial crisis hit home in the Caribbean last Friday when it was announced that regional giant CL Financial, a conglomerate that was reputedly responsible for generating as much as 25% of Trinidad and Tobago‘s annual GDP with interests ranging from life insurance to methanol production, was in crisis. As the government scrambled to save the day with a bailout, bloggers were already commenting on the potential impact of the massive financial faux pas…

Trinidad and Tobago News Blog republished the statement made by the Governor of the Central Bank and provided a number of mainstream media links to the story. Meanwhile, The Liming House was all over the story as it broke, as was Keith in Trinidad, who attended the official press conference and posted the latest on Twitter. The Liming House also made sure to republish the official CMMB press release, which attempted to assure clients that their investments were safe.

Triniadian diaspora blogger Jumbie's Watch thought the bailout made sense, but still had a concern – one that was apparently shared by former Governor of the Central Bank, Winston Dookeran, now head of the political party Congress of the People:

Clico has so many assets, so many fingers extending to so many pies that the effect of its collapse will be felt throughout the economy. It makes a certain sense to support Clico and try to hold on to assets, jobs etc.

However, I can’t help feel that there [are] certain things going on behind the scene[s] that we will never know about. Especially considering the relationship [that] PNM treasurer Andre Monteil has with Clico.

Barbadian bloggers were also quite interested in the story. Trinidadian journalist-turned-blogger B.C. Pires, who now resides in Barbados, was among the first to comment:

THE INTERNET is turning out this morning to be the equivalent of the telephone during the 1990 coup attempt.

But the rumours about Clico Investment Bank – some of them circulating for a decade now – this morning turned out to be true. The government and/or Central Bank have moved swiftly to guarantee depositors’ funds – but I want to believe that someone is going to move just as quickly to demand ‘equal treatment’ for the Hindu Credit Union, don’t mind it is in receivership.

Barbados Free Press also weighed in:

The government of Trinidad & Tobago is refusing to say how much money it is giving to bail out the CL Financial Group and CLICO, but the estimated liabilities amount to US$16 Billion dollars.

Yes, BILLION with a ‘B’.

The blog stated its suspicions that very soon, “CLICO and associated companies will be asking the [Barbadian] Prime Minister to give your tax money to a company that has an estimated 100 billion dollars in assets, but has run out of cash.”

BFP also questioned the timing of a public “gift” from the company:

“A few days before the CLICO crisis was announced, newspaper accounts say that CLICO ‘gave’ land for a daycare centre and a school to Barbados. Pardon us for being a bit cynical if we point out that this ‘gift to the people’ came only two days before Parrish and company announced that they were the recipients of taxpayer bailouts and guarantees that probably total hundreds of millions if not more.

Barbados Underground was of the opinion that the CL Financial bailout could have implications for Barbados:

Back in July 2007 we hinted our concerns that Trinidad and Tobago had become the hegemonist of the Caribbean. At the time former Prime Minister Owen Arthur with lead for CSME matters seemed prepared to expose Barbadian companies to the highest bidder. The Arthur approach fitted well with the Port of Spain expansionist strategy given their cash rich position derived from a petro-based economy operating in a bullish global petro-market. The end result is that our largest conglomerate BS&T, our Barbados National Bank and other home-spun entities were gobbled-up by Trinidad investors. While the advantages of the Arthur strategy made a good economic argument BU has always been concerned about our ability to cope with the downside of such a strategy i.e. the mitigation of risk associated with the heavy concentration of Trinidadian ownership in a small Barbados market.

Despite the concern of the rest of the region, however, the drama is primarily being played out against Trinidad and Tobago's economic backdrop, a fact that has not eluded This Beach Called Life:

Could the failure of the Trinidad and Tobago conglomerate CL Financial, the largest financial group in the Caribbean, be the tip of the financial crisis in Trinidad and Tobago and the Caribbean? Is the financial Titanic about to hit? If citizens are asking what they are going to get for the multibillion dollar Government bailout of CL the answer would be a financial system which has not collapsed. If people are asking why no beefed-up laws were passed to regulate CL Financial when the Central Bank became concerned about their high risk ventures since 2004, the answer would be who knows.

Despite the economic uncertainty, the blogger seemed to have his head on his shoulders:

As ludicrous as it seems right now, the best thing the public could do is be concerned but party. People should leave the financial institutions alone and let the regulators do what has to be done. This is one time where don’t worry be happy might work. The other banks in Trinidad and Tobago are stable and we were told the others never went into those high-risk ventures that CL Financial was prone to undertake. The problem with high-risk financial institutions is that most of the people who invested in them were ignorant to how high risk the ventures were and made the decision to invest based on a glossy brochure an/or an insurance agent – the two least credible sources of the truth.

As the truth continues to unfold, one thing is certain: bloggers across the region will be talking about it.


Join the conversation

Authors, please log in »


  • All comments are reviewed by a moderator. Do not submit your comment more than once or it may be identified as spam.
  • Please treat others with respect. Comments containing hate speech, obscenity, and personal attacks will not be approved.

Receive great stories from around the world directly in your inbox.

Stay up to date about Global Voices and our mission. See our Privacy Policy for details. Newsletter powered by Mailchimp (Privacy Policy and Terms).

* = required field
Email Frequency

No thanks, show me the site