T&T with­stood the ru­inous ef­fects of the glob­al fi­nan­cial cri­sis from which many world economies, not as for­tu­nate, are on­ly now show­ing signs of re­cov­ery. Ian Nar­ine, gen­er­al man­ag­er of Guardian As­set Man­age­ment, has ques­tions about the new strate­gies be­ing draft­ed and, ul­ti­mate­ly, im­ple­ment­ed to safe­guard T&T's sta­bil­i­ty as well as the rest of the Caribbean, should the glob­al econ­o­my again tum­ble.

He was not con­vinced that T&T, be­ing one of two of the largest economies with­in Cari­com, had learnt all the lessons need­ed to cush­ion the lo­cal econ­o­my from such a re­cur­rence.

"The glob­al econ­o­my is on­ly now emerg­ing from a fi­nan­cial cri­sis on a scale nev­er be­fore seen. With the is­sues in Eu­rope still un­re­solved, many are now sug­gest­ing that we may be on course for an­oth­er cri­sis. Here in the Caribbean, we must en­sure that we learn the lessons from the last cri­sis such that we do not re­peat those mis­takes, be­cause un­like the glob­al pow­ers, we sim­ply do not have the re­sources to with­stand an­oth­er round," he said. He was speak­ing at the launch of the Fourth An­nu­al In­ter­na­tion­al Con­fer­ence on Busi­ness, Bank­ing and Fi­nance held at the St Au­gus­tine cam­pus of the Uni­ver­si­ty of the West In­dies, on June 22, with the theme Restor­ing Busi­ness Con­fi­dence and In­vest­ments in the Caribbean.

Buoy­an­cy fac­tor

Nar­ine said the goal of the meet­ing would ben­e­fit the fi­nan­cial ser­vices in­dus­try be­yond mea­sure, but ques­tioned if the buoy­an­cy fac­tor was be­ing too eas­i­ly mag­ni­fied. "The first ob­jec­tive to­wards restor­ing con­fi­dence is to de­fine con­fi­dence it­self. It is of­ten tak­en for grant­ed, but sim­ply put in our con­text, con­fi­dence is the con­vic­tion that to­mor­row will be bet­ter than to­day." He ex­pressed hope that the pa­pers pre­sent­ed and dis­cus­sions held would fu­el the de­bate nec­es­sary to lay the path that would lead to a fu­ture that was bet­ter than the present. He said such a fu­ture re­quired the co­op­er­a­tion and con­struc­tive in­ter­ac­tion of all stake­hold­ers: gov­ern­ments of the re­gion, reg­u­la­tors, mar­ket ac­tors and the pub­lic.

"We are one of the largest in­vest­ment man­age­ment and ad­vi­so­ry firms in the coun­try. We boast funds un­der man­age­ment of over $8 bil­lion and man­age the in­vest­ment port­fo­lio of Guardian Life of the Caribbean which is the largest in­dige­nous in­sur­ance com­pa­ny in the Eng­lish speak­ing Caribbean.

"The role of Guardian As­set Man­age­ment is, there­fore, in­stru­men­tal in the lives of every in­sur­ance pol­i­cy­hold­er with­in the Guardian Hold­ings Group, and this list in­cludes thou­sands of per­sons and com­pa­nies in T&T, Ja­maica, the East­ern Caribbean and the Dutch An­tilles." While the in­vest­ment cli­mate across much of the Caribbean was vi­tal, Nar­ine said it was time for re­gion­al lead­ers to fol­low through in a time­ly man­ner on the poli­cies they had promised to adopt.

Proac­tive reg­u­la­tion

"Our in­abil­i­ty to proac­tive­ly ad­dress reg­u­la­to­ry is­sues and the lack of ur­gency re­gard­ing leg­is­la­tion deal­ing with the fi­nan­cial ser­vices in­dus­try will not serve to in­spire con­fi­dence. In T&T, the up­dat­ing of the leg­is­la­tion re­gard­ing the Se­cu­ri­ties In­dus­tries Act and the In­sur­ance Act is long over­due. The lengthy time­line to­wards the up­dat­ing of the Fi­nan­cial In­sti­tu­tion Act has cost us dear­ly. Let us not re­peat that sce­nario with these two oth­er crit­i­cal pieces of leg­is­la­tion. "Even though pas­sage of these in­di­vid­ual pieces of leg­is­la­tion was in­te­gral to restor­ing con­fi­dence, it was just the first step, since the on­ly way to max­imise our po­ten­tial was to quick­ly har­monise in­dus­try leg­is­la­tion across the re­gion. We can't af­ford to have a pop­u­la­tion of six mil­lion peo­ple op­er­at­ing un­der mul­ti­ple frame­works. This in­creas­es the cost of do­ing busi­ness not just in­tra re­gion­al­ly, but ex­tra re­gion­al­ly as well and once again the sta­tus quo does not in­spire con­fi­dence."

He ques­tioned why sev­er­al ini­tia­tives geared to­ward strength­en­ing re­gion­al economies were still in sta­sis. They in­clud­ed: the Caribbean Sin­gle Mar­ket Econ­o­my (CSME); the Caribbean Stock Ex­change; and the Caribbean Court of Jus­tice. He praised UWI in con­junc­tion with the Sir Arthur Lewis In­sti­tute of So­cial and Eco­nom­ic Stud­ies and the Caribbean Cen­tre for Mon­ey and Fi­nance for tak­ing the man­tle of en­gi­neer­ing these dis­cus­sions. He said that with­out pub­lic dis­course, the com­mu­ni­ty re­mains root­ed in fear, which is the an­tithe­sis of con­fi­dence.In Nar­ine's opin­ion, con­fi­dence thrived when there were rea­son­able and known pa­ra­me­ters in as­sess­ing an out­come. He not­ed that one's in­abil­i­ty to im­ple­ment clear­ly ar­tic­u­lat­ed goals and ob­jec­tives will not in­spire busi­ness and in­vestor con­fi­dence.

"If busi­ness de­ci­sions are trun­cat­ed by in­tend­ed gov­ern­men­tal and reg­u­la­to­ry ac­tions, which are al­ways late in com­ing to pass, then busi­ness will sim­ply go else­where be­cause time is mon­ey. We op­er­ate in a glob­al econ­o­my where cap­i­tal over the past decade is more mo­bile than at any time in his­to­ry. "Such mo­bil­i­ty cre­ates in­tense com­pe­ti­tion and growth of many emerg­ing mar­ket economies have re­sult­ed in a larg­er pool of at­trac­tive in­vest­ment projects for in­vestors to con­sid­er. This cre­ates a pro­found chal­lenge for the Caribbean re­gion, be­cause we are not con­sid­ered emerg­ing mar­ket, but rather we stand fur­ther out on the in­vest­ment spec­trum list­ed as fron­tier mar­kets. Our hur­dles are, there­fore, far greater and our op­por­tu­ni­ties more fleet­ing."

The as­set man­age­ment of­fi­cial point­ed to the fick­le na­ture of the glob­al cap­i­tal mar­ket and re­called how the oil and gas prices plum­met­ed from US$147 per bar­rel and US$13 per mmb­tu re­spec­tive­ly to US$30 (for oil) and US$4 (for gas). He won­dered if these prices were pure­ly on the com­mis­er­ate fall off in glob­al de­mand. He said, the de­cline was not the re­sult of a fall in phys­i­cal de­mand, but rather, it was due to the im­pact of glob­al fi­nance. "Such fick­le­ness makes for a very frag­ile de­f­i­n­i­tion of fi­nan­cial suc­cess and pros­per­i­ty and so, we must al­ways be on guard, nev­er take our po­si­tion for grant­ed and al­ways be on the look out for tail risk or the prover­bial black swan event."