/raid1/www/Hosts/bankrupt/TCRLA_Public/210114.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, January 14, 2021, Vol. 22, No. 5
Headlines
A R G E N T I N A
CORDOBA PROVINCE: S&P Cuts ICR to 'SD' on Missed Interest Payment
YPF SA: S&P Downgrades Issuer Rating to CC, Off CreditWatch Neg.
B R A Z I L
BANCO DO BRASIL: To Sell 1,404 Repossessed Properties at Discounts
BANCO DO ESTADO: Fitch Withdraws BB- Rating for Commercial Reasons
BRAZIL: Trade Balance at US$50BB Surplus, Below Prior Estimates
COMPANHIA SIDERURGICA: S&P Raises Global Scale Rating to 'B'
C H I L E
WOM SA: S&P Affirms B+ Issuer Credit Rating, Outlook Stable
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Biz Sector on Lookout for Tight Restrictions
DOMINICAN REPUBLIC: With 600k Lost Jobs, Firms Warn of Lay Offs
[*] DOMINICAN REPUBLIC: 1 More Hour of Mobility During Curfew Hours
M E X I C O
MEXICO: GDP Fell by Less Than 8.9% in 2020, Says President
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: To Recalibrate Priorities for 2021
V E N E Z U E L A
VENEZUELA: Closes 2020 with 3,713% Inflation Rate
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A R G E N T I N A
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CORDOBA PROVINCE: S&P Cuts ICR to 'SD' on Missed Interest Payment
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S&P Global Ratings lowered its global scale issuer credit rating on
the province of Cordoba to 'SD' from 'CC'. S&P also took the
following rating actions:
-- S&P lowered the issue-level rating on its 2021 international
bond to 'D' from 'CC'.
-- S&P affirmed the issue-level rating on its 2024 and 2027
international bonds at 'CC'.
Outlook
S&P doesn't assign outlooks to 'SD' or 'D' issuer credit ratings
because they express a condition and not a forward-looking opinion
of default probability.
Downside scenario
S&P said, "We could lower the issue–level rating on the 2024 and
2027 bonds to 'D' from 'CC' when the province formally completes
their restructuring. The specifics of the province's proposal,
along with the extremely stressed economic and financial conditions
in Argentina and the province, are in line with our definition of
distressed exchange and tantamount to default. We could also lower
the rating on the two bonds to 'D' if the province fails to make
timely debt service payments."
Upside scenario
S&P said, "We will raise our ratings on the province following the
completion of its broad debt restructuring and once the new terms
are effective. Our post-default ratings tend to be in the 'CCC' or
'B' categories, depending on the issuer's capacity and willingness
to service that debt, which would be contingent on the new debt
structure, the macroeconomic prospects and potential access to
markets." Nonetheless, the current 'CCC+' transfer and
convertibility (T&C) assessment on Argentina constitutes a rating
cap on domestic subnational governments.
Rationale
S&P lowered its issuer credit rating on the province of Cordoba to
'SD' following the expiration of the 30-day grace period on the $25
million interest payment on the province's 2021 international bond.
The 2021 bond is part of Cordoba's ongoing comprehensive $1.7
billion international debt restructuring. Amid the increasingly
strained financial conditions, the province has been negotiating
with bondholders to restructure its three international bonds due
2021, 2024, and 2027. The province has improved its offer several
times since November 2020 in order to gain support from
bondholders. Cordoba announced today that it had reached an
agreement in principle with bondholders that excluded capital
haircuts, but incorporated a smoother and extended amortization
profile and a reduction in interest payments, resulting in net
present value losses for bondholders. Accrued interest payments,
including for the 2021 bond, are part of the negotiation, given the
province has offered to pay up to 30% of them in cash at settlement
and 70% as aggregated payment in kind to holders who submit their
consent.
The severe recession, exacerbated by the COVID-19 pandemic and
sovereign default, will continue to impair Cordoba's finances,
despite a comparatively stronger starting point than other
Argentine provinces. Cordoba has stemmed the sharp revenue erosion
and maintain balanced fiscal results thanks to its budgetary
flexibility. The province reduced the infrastructure spending to 6%
of total spending from 11% in 2019, delayed the salary increases
for public servants to the last quarter of 2020, and passed the
pension reform in May 2020, which mitigated pension funding
pressures.
The province has been using the previously accumulated cash and
borrowings from the national government to cover its relatively low
financing needs so far. Even though the $25 million interest
payment was manageable due to the province's financial stance,
amortizations in the coming months are more onerous, estimated at
$785 million. Moreover, international credit markets remain
virtually closed to Argentine local and regional governments
(LRGs), and prospects for future access remains uncertain.
Consequently, S&P has adjusted its base-case forecast to reflect
Cordoba's potentially amended debt profile.
The Argentine peso's sharp depreciation and the province's heavy
exposure to the dollar-denominated debt, coupled with the
administration's ambitious infrastructure plan, have raised the
province's once very low debt burden. S&P estimates debt has peaked
at 60% of operating revenues in 2020, far above 30% in 2017.
Moreover, the province's debt will continue to be heavily exposed
to foreign currency and subject to volatility in the exchange
rate.
Cordoba's debt restructuring occurs simultaneously with that of at
least seven other Argentine provinces, most of them already in
default, including the province of Buenos Aires. The provinces of
Mendoza, Rio Negro and Neuquen have already concluded their
international deals.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating action.
Ratings List
Downgraded
To From
Cordoba (Province of)
Issuer Credit Rating SD/-- CC/Negative/--
Senior Unsecured D CC
Notes due 2021
Ratings Affirmed
Cordoba (Province of)
Senior Unsecured CC
Notes due 2024 and 2027
YPF SA: S&P Downgrades Issuer Rating to CC, Off CreditWatch Neg.
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On Jan. 11, 2021, S&P Global Ratings lowered its issuer rating on
Argentina-based integrated oil company YPF S.A. to 'CC' from
'CCC-'. YPF S.A. has just announced a proposed transaction that
aims at refinancing most of its outstanding international bonds
(due 2021, 2024, 2025, 2027, 2029, and 2047) and removing certain
existing covenants. S&P also expects to lower the issuer credit
rating to selective default (SD) once the transaction is completed,
and reassess the company's credit quality 24 hours afterwards. S&P
also removed ratings from CreditWatch with negative implications.
The company offered the transaction following the central bank's
September 2020 measure that limits the access to hard currency to
Argentine issuers with debt maturities of more than $1 million
until the end of March 2021. Such a limitation is unprecedented and
impairs YPF's ability to serve the outstanding portion of its 2021
bonds (about $413 million).
YPF is offering three new bonds (with final maturity in 2026, 2029,
and 2033) in exchange for: the senior unsecured bonds maturing in
March 2021, April 2024, March 2025, July 2025, July 2027, June
2029, and December 2047. Creditors of the 2021 bond can opt to
receive $12.5 in cash, plus accrued interest payments on it at the
settlement and $87.5 in a new export-backed security that amortizes
between 2023 to 2026, for each $100 tendered. The new 2026 secured
bond has an 8.5% interest payable along with the principal from
2023 to 2026 and capitalizes the accrued interests from 2021 to
2022.
Bondholders of the rest of the existing bonds can opt to exchange
them for a pre-defined combination of the new bonds, which would
entail in most of the cases an extension of the tenors of their
holdings while keeping the same interest (8.5%) or getting a lower
one (7%), particularly for the holders of the bonds that mature
beyond July 2025.
S&P typically considers an exchange as tantamount to default due to
the following factors: there's a likelihood of a conventional
default if the exchange is not completed, and it doesn't provide
sufficient compensation for the extension of the tenors. In S&P's
opinion, both conditions are met for the holders of the 2021 bond,
but the first condition doesn't necessarily apply to the rest of
the bonds offered.
YPF's capacity to pay the outstanding 2021 bond ($413 million) is
doubtful. This is because despite the sufficient amount in
Argentine pesos, the company won't be able to convert them to
dollars to make the payment, given that Argentina's central bank
has stated that it will only supply dollars for only 40% of the
principal maturities coming due until March 31, 2021. Therefore,
YPF would fall short about $250 million for that maturity.
In September 2020, the central bank restricted access to foreign
currency for domestic companies and residents given that the
country's international reserves were falling rapidly due to the
very weak economy prior to the pandemic, exacerbated by the
lockdown. S&P estimates that Argentina's GDP contracted 11%-12% in
2020. Given the central bank's measure, companies are forced to
refinance 60% of the principal of debt maturities coming due prior
to March 31, 2021.
S&P said, "Although Argentina could extend capital controls beyond
March 2021 as the country steadies its foreign accounts, we view
the restriction as temporary. Therefore, the company's payments of
bonds and principal amortizations in the medium and long term
shouldn't be affected, in our view.
"We also expect YPF's oil and gas volumes to continue normalizing,
while the company increased pump prices five times in the past five
months, after a price freeze for most of the first half of 2020."
To protect cash, the company squeezed the cash cycle and slashed
capital expenditures (capex) to $2 billion in the past 12 months as
of September 2020 from $3.5 billion in 2019. The peso's sharp
depreciation also contributed to YPF's lower capex and costs. In
2020, YPF's external financing has come mostly from bank debt
refinancing and the domestic market where the company issued over
$500 million (the bonds are paid in pesos, but the nature of the
obligation is in dollars). Due to these factors, YPF's cash
reserves were near $1 billion as of Sept. 30, 2020, though they're
mostly in pesos in Argentina.
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B R A Z I L
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BANCO DO BRASIL: To Sell 1,404 Repossessed Properties at Discounts
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Richard Mann at Rio Times Online reports that Banco do Brasil (BB)
has announced the sale of 1,404 properties with discounts that
could reach 70%. This offer includes houses and apartments at
prices ranging from R$15,000 to R$21.7 million.
The sales campaign is expected to run until January 15th.
Information about the properties may be found through the website
seuimovelbb.com.br, according to Rio Times Online.
The Northeast Region concentrates the largest number of properties
for sale, with 590 units and discounts of up to 65%. Next comes the
Center West with 349 properties and discounts of up to 70%, the
report notes, the report notes.
As reported in the Troubled Company Reporter-Latin American on Oct.
14, 2019, Moody's Investors Service affirmed all of Banco do Brasil
S.A.'s ratings, following the affirmation of the bank's ba2
baseline credit assessment. BB is rated Ba2 and Not Prime for
long-and short-term local currency deposits and Ba3 and Not Prime
for long- and short-term foreign currency deposits. Banco Do Brasil
S.A. (Cayman)'s long-term senior unsecured foreign currency debt
rating is Ba2. All ratings have a stable outlook.
BANCO DO ESTADO: Fitch Withdraws BB- Rating for Commercial Reasons
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Fitch Ratings has affirmed and withdrawn all of Banco do Estado do
Para S.A.'s (Banpara) ratings, including the Long-Term Issuer
Default Rating (IDR) and Viability Rating (VR), which were affirmed
at 'BB-' and 'bb-', respectively. The long-term Rating Outlook at
the time of the Withdrawal was Negative, in line with Fitch's
assessment of the Sovereign Rating.
The rating is being withdrawn for commercial reasons.
KEY RATING DRIVERS
Banpara's IDRs are derived from its Viability Rating (VR). The VR
reflects the bank's company profile, which includes a robust
regional franchise. However, despite regional relevance, the bank
has a limited market share in the national financial system. The
bank's VR is also highly influenced by Brazil's challenging
operating environment.
The ratings also reflect satisfactory key financial profile
metrics, a moderate risk appetite, adequate management quality and
sound strategies. As a state-owned bank, it plays an important role
in promoting the region's financial development through strong
operations in state public entities, providing services and
granting credits to suppliers and public servants mainly through
payroll-deductible loans. The issuer also plays a relevant role by
servicing regions that are underserved by commercial banks due to
regional difficulties.
Fitch points out that, like other public entities, Banpara is
potentially subject to political influence given its control
structure despite its solid corporate governance structure.
However, this has not affected the bank's performance relative to
its current rating.
Banpara relies on low-cost retail funding provided by its agency
network and judicial deposits. Banpara operates as a commercial
bank in different segments focused mainly on individuals; its
activities are concentrated in the State of Pará, where the bank
holds around 21% of credit operation market share through a network
of 161 agencies (127 agencies and 34 points of service),
representing about 90% of the state's population.
Despite the pandemic, given the bank's credit portfolio profile of
low-risk products, its asset quality metrics are comfortable, with
a D-H loans ratio as of September 2020 of 3.64%. Moreover, when
considering NPLs greater than 90 days, the ratio is reduced to
1.37%, which is low compared to peers. The coverage ratio of D-H
loans is 62% and, when factoring coverage for NPLs greater than 90
days, the ratio reaches 166%.
Banpara reports profitability ratios above those of its peers, with
an operational profit/risk-weighted assets (RWA) ratio of 8.6% and
a historical average of 9.7%. As of September 2020, the bank
reported a comfortable ROAE of 24.88%.
Recent profitability was enhanced by credit growth of 27%, namely
in payroll-backed deductible loans and low-cost funding. The
quality of Banpara´s capital base is good, with a common equity
Tier 1 (CET1) ratio of 22.4% as of December 2019 - which was above
those of its peers, provides a sufficient cushion against
unforeseen events and continues to grow its credit.
Support Rating and Support Rating Floor
Banpara's Support Rating (SR) of '4' reflects a limited likelihood
of support from its controlling shareholder, the State of Para.
Fitch believes the state would have a high propensity, but may have
a limited capacity, to support the bank if necessary. In Fitch's
opinion, Banpara is strategically important for Para. The bank
serves as the financial agent for the state and plays an important
role in promoting the region's financial development through strong
operations in state public entities, providing services and
granting credits to suppliers and public servants mainly through
payroll-deductible loans.
RATING SENSITIVITIES
Not applicable, as the ratings are being withdrawn.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ESG CONSIDERATIONS
Banpara's Environmental, Social and Governance (ESG) score has
changed to a '3' from a '4' due to a reassessment of how Fitch
considers governance for state-owned banks. Banpara has a good
track record of following its policies as defined by its statutes,
and there has been no evidence of government interference that
affects the bank's performance relative to its current ratings
despite government control of the board.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Following the withdrawal of ratings for Banpara, Fitch will no
longer be providing the associated ESG Relevance Scores.
BRAZIL: Trade Balance at US$50BB Surplus, Below Prior Estimates
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Rio Times Online reports that with the coronavirus pandemic
affecting imports more than exports, Brazil recorded a positive
balance of US$50.995 billion in foreign trade in 2020. This
represents an increase of 6.2% over the 2019 trade balance,
according to Rio Times Online. However, the 2020 result fell below
the projected median of US$51.2 billion surplus, the report notes.
According to data released by the Ministry of Economy's Foreign
Trade Secretariat on January 4, the figure was buoyed by US$209.921
billion in exports, which exceeded imports by US$158.926 billion,
the report discloses.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
S&P Global Ratings affirmed on December 14, 2020, its 'BB-/B'
long-and short-term foreign and local currency sovereign credit
ratings on Brazil. The outlook on the long-term ratings remains
stable.
Fitch Ratings' credit rating for Brazil stands at 'BB-' with a
negative outlook (November 2020). Moody's credit rating for Brazil
was last set at Ba2 with stable outlook (April 2018). DBRS's
credit rating for Brazil is BB (low) with stable outlook (March
2018).
As reported in the Troubled Company Reporter-Latin America, S&P
Global Ratings' stable outlook assumes that timely implementation
of fiscal adjustment and modest economic recovery will help
preserve market confidence and adequate funding conditions for the
government in local markets in the next two years, despite a
sustained increase in the debt burden.
COMPANHIA SIDERURGICA: S&P Raises Global Scale Rating to 'B'
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On Jan. 12, 2021, S&P Global Ratings raised its global and national
scale ratings to 'B' from 'B-' and to 'brA+' from 'brBBB+',
respectively, on Brazilian iron ore and steel producer Companhia
Siderurgica Nacional (CSN). The outlook on both ratings remains
positive. At the same time, S&P raised its issue-level rating on
CSN Islands XII Corp.'s senior unsecured notes to 'B' from 'B-'.
The issue-level rating is at the same level as the long-term issuer
credit rating, along with the recovery rating of '4', given the
expected average recovery of 40% (rounded estimate).
The positive outlook reflects S&P's expectation of CSN's continuing
deleveraging in the next 12 months, with the maintenance of
adjusted debt to EBITDA well below 4.0x, funds from operations
(FFO) to debt close to 20%, positive free operating cash flow
(FOCF), and debt refinancing strengthening its liquidity.
Skyrocketing iron ore prices, the weak Brazilian real, coupled with
the solid steel and cement demand--allowing for price adjustments
in the domestic market--are boosting CSN's earnings. Even assuming
a more conservative approach to iron ore prices, given S&P's
forecasted average for 2021 of $110 per ton (spot prices of about
$170 per ton), it expects the company's adjusted EBITDA to rise
above R$11 billion by the end of 2021, but to drop in 2022
following its iron ore price curve of $85 per ton.
The company's cash generation will allow it to reduce nominal debt,
but the bulk of deleveraging comes from higher EBITDA. S&P
estimates adjusted debt to EBITDA to drop close to 3.0x in 2021
from 5.6x reported on Sept. 30, 2020. Prospects of asset sales and
an IPO of CSN Mineração could accelerate CSN's deleveraging by
reducing nominal debt to protect the balance sheet against negative
price cycles, although CSN would also use the IPO proceeds to fund
a sizeable capex plan to increase iron ore output to more than 100
million tons (MT) in the next decade from currently 33 MT.
The higher cash generation, loan refinancing, iron ore prepayment
deal, and the add-on to the 2028 notes have bolstered liquidity for
the next 12 months. However, the company still has sizeable
maturities in the next three years, while it will significantly
increase investments from R$2.8 billion in 2021 to more than R$5
billion in 2022 and 2023. S&P assumes at least a 25% dividend
payout, as the holding companies rely on dividends stream to pay
down interest on their debt.
S&P's numbers differ significantly from reported figures, because
it makes several adjustments to the company's reported financials,
such as:
-- S&P's debt metrics include Transnordestina's debt, pension
adjustments, iron ore prepayments, leasing obligations, asset
retirement obligations and tax installments, which add about R$7.6
billion to CSN's debt as of Sept. 30, 2020.
-- S&P's adjusted EBITDA excludes the proportional contribution
from MRS Logistica S.A. and some non-recurrent factors such as
asset sales, the PIS/Cofins recognition, and the fair value
adjustments of Usinas Siderurgicas de Minas Gerais S.A.'s shares.
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C H I L E
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WOM SA: S&P Affirms B+ Issuer Credit Rating, Outlook Stable
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S&P Global Ratings affirmed its 'B+' issuer credit rating on
Chilean mobile operator Wom S.A. and assigned its 'B+' issue-level
rating to the proposed senior unsecured notes.
The stable outlook reflects S&P's expectation that the company will
maintain a sound subscriber base, revenue, and cash flow growth in
2021 and its adjusted debt to EBITDA to peak at about 4.8x in 2021
and fall to 4.0x-4.2x in 2022.
Wom S.A., intends to issue senior unsecured notes for $300 million
to $450 million (through its financial vehicle, Kenbourne Invest
S.A.) to finance spectrum investment and potentially refinance a
syndicated loan.
Although the proposed transaction will delay Wom's deleveraging,
given that S&P Global Ratings now projects adjusted debt to EBITDA
peaking at about 4.8x in 2021, leverage should remain in line with
the rating level.
In November 2020, Wom submitted four proposals for the 5G Spectrum
Contest launched by Subtel, the Chilean telecom regulator. Subtel
hasn't completed the assessment of the proposals yet, but Wom plans
to use part of the issuance proceeds to finance related capex and
tender if it wins the spectrum bid. Subtel is currently reviewing
and scoring the proposal. By the end of January, Subtel could grant
spectrum if the highest score surpasses by more than four points
the second highest one, or call for a direct tender to break the
tie. Although results and related capex needs are currently
uncertain, S&P expects the company to increase gross debt by no
more than $300 million, assuming that if the issuance is up to $450
million, Wom will refinance the outstanding $150 million syndicated
loan for.
S&P said, "Pro forma the issuance, Wom's adjusted leverage would
peak at about 4.8x in 2021, according to our base-case scenario,
compared with about 3.5x in our previous forecast (please refer to
the full analysis on Wom S.A. , published Dec. 2, 2020). In
addition, the higher capex will constrain Wom's free operating cash
flow (FOCF). As a result, we expect a delay in Wom's deleveraging
given that debt to EBITDA will likely start falling to 4.0x-4.2x in
2022. Despite the higher-than-forecasted leverage, we expect it to
remain consistently below our 5.0x downside threshold.
Additionally, we expect the company to maintain financial
discipline in order to keep net leverage below 3.0x in the next two
to three years, adequate liquidity, and a hedging strategy on the
new notes.
"We expect the bidding process for the spectrum license to increase
Wom's capex in 2021 and 2022 by about $50 million and $150 million,
respectively, from our previous forecast." Nevertheless, the
spectrum investments should marginally strengthen the company's
competitive position. These investments should boost growth in the
postpaid customer base by further strengthening the company's
network and improve EBITDA margins, given that Wom should achieve
considerable savings in national roaming costs.
In general, the telecom industry has held up well during the
pandemic because of the sector's low cyclicality and utility-like
demand characteristics. Wom has maintained its customer base and
revenue growth and even slightly expand margins. However, this
doesn't mean that revenues and margins will come out unscathed.
Particularly during the second quarter, reduced commercial activity
given that most stores were closed, lower prepaid recharges, and
offers and discounts to prevent its customer base from shrinking
pressured the company's revenue and margin growth. However Wom's
operations started to recover in the third quarter and further
accelerated during the last couple of months of the year. S&P said,
"Despite pandemic-induced economic crisis, we estimate the
company's postpaid customer base grew 12%-13% during 2020,
resulting in revenue growth of about 10% and EBITDA of CLP160
billion - CLP165 billion, compared with CLP136.6 billion in 2019.
As a result, we expect the company's debt-to-EBITDA ratio to fall
to 4.2x-4.3x in 2020 from 4.8x in 2019."
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Biz Sector on Lookout for Tight Restrictions
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Dominican Today reports that faced with growing concern over the
increase in Covid-19 cases in the country and the government's
warning that it could tighten restrictive measures to stop the
virus, the business sector has expressed that it remains on the
lookout for any decision taken by the authorities while insisting
on the application of sanitary protocols in companies.
The executive vice president of the Association of Industries
(AIRD), Circe Almanzar, said that they would consult with the
companies affiliated to the union to define common actions in the
face of the changes generated by the new schedules and visualize
future scenarios, according to Dominican Today.
Almanzar further said that they had received many concerns from
members on timetables and circulation permits (safe-conduct), the
report notes. She clarified that this increase in Covid-19 cases
is not due to companies' infections but due to people's lack of
caution in their communities, the report relays.
"We had shown that there was no regrowth during the time safe
conducts for the industries were maintained. Instead, it has
occurred in these days as a result of the festive activities," said
Almanzar, adding that they are waiting for the Covid-19 vaccine to
arrive to be able to return to normality, the report discloses.
Strengthen Protocols
The president of the Association of Industrial Companies of Herrera
and Greater Santo Domingo (AEIH), Leonel Castellanos, called on
companies to strengthen the implemented protocols and couple work
schedules to help avoid crowds of people in places of transport,
the report discloses. The businessman said that companies must
improve internal management to guarantee workers' health and the
institution's sustainability, the report notes. "Use of a mask,
distancing, sanitizing gel, and modifying work schedules to ensure
that people do not transit all at the same time," suggested the
AIEH executive, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the
island of Hispaniola with Haiti to the west. Capital city Santo
Domingo has Spanish landmarks like the Gothic Catedral Primada de
America dating back 5 centuries in its Zona Colonial district.
Luis Rodolfo Abinader Corona is the current president of the
nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's, on December 4, 2020, affirmed its 'BB-'
long-term foreign and local currency sovereign credit ratings on
the Dominican Republic. The outlook remains negative. S&P also
affirmed its 'B' short-term sovereign credit ratings.
The negative outlook reflects S&P's view that it could lower the
ratings on the Dominican Republic over the next six to 18 months,
given the severe impact of the COVID-19 pandemic on the
sovereign's already vulnerable fiscal and external profiles, as
well as the potential for a weaker-than-expected economic
recovery.
Moody's credit rating for Dominican Republic was last set at Ba3
with stable outlook (July 2017). Fitch's credit rating for
Dominican Republic was last reported at BB- with negative outlook
(May 8, 2020).
DOMINICAN REPUBLIC: With 600k Lost Jobs, Firms Warn of Lay Offs
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Dominican Today reports that small and medium-sized businesses warn
that they will have to lay off more than 10% of the payroll, after
the elimination of the employer assistance program, last December.
They asked the Government to extend the Phase II aid program until
April, to be able to maintain employment and recover their
operations, according to Dominican Today.
The trade unions have indicated that in the labor market the job
losses for this year reach 300,000 which added to the figure of
last year will reach 600,000 jobs, the report notes.
Pandemic
However, the projections will be conditioned by the effectiveness
of the vaccination campaign against Covid-19 and by the degree of
financial aid applied by the Government, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the
island of Hispaniola with Haiti to the west. Capital city Santo
Domingo has Spanish landmarks like the Gothic Catedral Primada de
America dating back 5 centuries in its Zona Colonial district.
Luis Rodolfo Abinader Corona is the current president of the
nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's, on December 4, 2020, affirmed its 'BB-'
long-term foreign and local currency sovereign credit ratings on
the Dominican Republic. The outlook remains negative. S&P also
affirmed its 'B' short-term sovereign credit ratings.
The negative outlook reflects S&P's view that it could lower the
ratings on the Dominican Republic over the next six to 18 months,
given the severe impact of the COVID-19 pandemic on the
sovereign's already vulnerable fiscal and external profiles, as
well as the potential for a weaker-than-expected economic
recovery.
Moody's credit rating for Dominican Republic was last set at Ba3
with stable outlook (July 2017). Fitch's credit rating for
Dominican Republic was last reported at BB- with negative outlook
(May 8, 2020).
[*] DOMINICAN REPUBLIC: 1 More Hour of Mobility During Curfew Hours
-------------------------------------------------------------------
Dominican Today reports that from Jan. 9 until the 26 of this
month, a curfew will apply throughout the country from 5:00 in the
afternoon to 5:00 in the morning, Monday through Friday (holidays
or not), allowing free transit until 8:00 at night, as part of the
measures designed to reduce the risk of contagion by the
coronavirus.
This is established by Decree 7-21, issued by President Luis
Abinader, which confirms that on Saturdays and Sundays, the curfew
begins at noon, with free movement until 3:00 in the afternoon,
according to Dominican Today.
The presidential provision also establishes that restaurants will
accept customers in their facilities up to 50% of their capacity
and the return to telework in the public sector, the report notes.
Article 3 of the decree establishes that on Saturdays 16 and 23 and
Sundays 17 and 24 of January 2021, the curfew will be from 12:00
noon to 5:00 in the morning, with three hours of free transit,
until 3:00 in the afternoon, the report discloses.
The Executive Branch also instructed the Office for the Reordering
of Transportation (OPRET), which governs the Metro and Cable Car
services, and the Metropolitan Office of Bus Services (OMSA), to
offer their service to citizens within the hours of circulation
defined in the decree, the report says.
Telework is Back
Article 13 of that decree states that the working day in the public
sector will be until 3 pm and that 40% of the staff of public
employees not essential for the activity of the home will be sent
to continue their work, the report notes.
Restaurants at 50%
The report discloses that the new government regulation establishes
that restaurants will be able to receive customers up to 50% of
their installed capacity, in strict compliance with current
distancing protocols, without exceeding six people per table.
Parks and Seawalls
Similarly, the government provision establishes that open public
spaces in the open air, such as parks and seawalls, may only be
used for sports practices that do not involve groups, teams, or
accumulation of people of any nature, the report relays.
In these areas, the sale and consumption of alcoholic beverages are
prohibited, the report notes.
Churches and Gyms
Decree 7-21 establishes that the different churches or religious
denominations' activities will be maintained under the terms
provided in Decree 2-21, dated January 5, 2021. They may offer
services three times per week, as long as they comply with the
protocol against Covid-19, the report notes.
Meanwhile, gyms, in public or private spaces, cinemas, theaters,
and any other facility for public and massive events that are not
essential for the development of citizenship continue to be closed,
the report relays.
During curfew hours, people dedicated to health services, such as
doctors, nurses, bioanalysts, paramedical personnel, and
pharmaceutical personnel, can pass through, the report notes.
Also, people with a medical emergency who need to go to a health
center or pharmacy and those dedicated to private security tasks
duly identified, the report discloses.
Also permitted are members of the press and other duly accredited
media, the report relates.
Figures
These people can transit -- international passengers and operators
of private or commercial vehicles and duly identified employees of
the maritime and air transport sector, in transit to or from ports
and airports; and vehicle operators and technicians from companies
and institutions that provide energy, water, telecommunications,
and solid waste collection services, the report relays.
Follow Emergency.
With Decree 6-21, the state of emergency to combat the Covid-19
coronavirus was extended for 45 days, starting on January 16, the
report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the
island of Hispaniola with Haiti to the west. Capital city Santo
Domingo has Spanish landmarks like the Gothic Catedral Primada de
America dating back 5 centuries in its Zona Colonial district.
Luis Rodolfo Abinader Corona is the current president of the
nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's, on December 4, 2020, affirmed its 'BB-'
long-term foreign and local currency sovereign credit ratings on
the Dominican Republic. The outlook remains negative. S&P also
affirmed its 'B' short-term sovereign credit ratings.
The negative outlook reflects S&P's view that it could lower the
ratings on the Dominican Republic over the next six to 18 months,
given the severe impact of the COVID-19 pandemic on the
sovereign's already vulnerable fiscal and external profiles, as
well as the potential for a weaker-than-expected economic
recovery.
Moody's credit rating for Dominican Republic was last set at Ba3
with stable outlook (July 2017). Fitch's credit rating for
Dominican Republic was last reported at BB- with negative outlook
(May 8, 2020).
===========
M E X I C O
===========
MEXICO: GDP Fell by Less Than 8.9% in 2020, Says President
-----------------------------------------------------------
EFE News reports that Mexico's economy shrank by less than 8.9
percent in 2020 and will recover in the first quarter of 2021,
President Andres Manuel Lopez Obrador said in his first daily press
conference of the year.
"Analysts had estimated that the economy was going to fall between
12 percent and 15 percent in the year, and that wasn't the case. So
far (initial readings indicate a drop of) 8.9 percent and I
estimate it will be less (of a plunge) because in the last quarter
there was already more economic growth," the head of state,
popularly known as AMLO, said, according to EFE News.
Besides the more than 1.44 million coronavirus cases and over
127,000 deaths attributed to Covid-19 in Mexico, the pandemic
caused a 9.6 percent contraction in gross domestic product (GDP) in
the first nine months of 2020 and the loss of nearly 1.1 million
formal jobs, the report notes.
Mexico's GDP plunged by 8 percent in 2020 but will bounce back and
grow at a 4.6 percent clip this year, according to the Finance and
Public Credit Secretariat's projections, the report relays.
"The governor of Banco de Mexico (Mexico's central bank) has just
revealed that there are signs of a recovery of Mexico's economy,
and we agree with that. We have reason to affirm that the economy's
going to grow in these three months, in this first quarter," AMLO
said, the report discloses.
As he did in a New Year's Day message, the president said Mexico
had recovered nearly 600,000 formal jobs between August and
September but then lost nearly 277,000 jobs in December, the report
discloses.
The report relates that he blamed those layoffs on subcontractors'
practice of removing employees from payrolls to avoid paying
year-end bonuses and other benefits.
Lopez Obrador is backing a bill that would sharply reduce the
subcontracting of personnel to third-party companies, the report
notes.
Despite the challenges of the coronavirus and outsourcing, Lopez
Obrador predicted that by the end of March the country would have
20.5 million formal workers registered with the Mexican Social
Security Institute (IMSS), or roughly the same number as before the
pandemic, the report discloses.
"We're already going to start recovering them in January because a
rehiring of those same jobs will begin, and on top of that there
will be economic growth that's happening and will happen this
year," AMLO said, the report relays.
Among other positive factors, he recalled that a 15 percent
increase in the minimum wage was approved for this year and that
the peso has stabilized at an exchange rate of around 20 per
dollar, the report notes.
EFE News relays that the pandemic remains his administration's
primary concern, according to Lopez Obrador, who stressed the need
for the 15 million Mexicans over the age of 60 to get vaccinated by
the end of March.
"If we achieve that, we're going to be quite far along in
controlling the pandemic, which is the most difficult thing," the
president said, the report adds.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: To Recalibrate Priorities for 2021
-----------------------------------------------------
Trinidad Express reports that Express Business reporter Andrea
Perez-Sobers sent some questions to Secretary of Finance and the
Economy in the Tobago House of Assembly, Joel Jack, on the
management of the island's economy in the last four years.
Below are the interview notes:
Q: Going into an election year, do you think you did enough for the
people of Tobago, where finance is concerned?
A: Yes, I think I have done well with regards to advancing the
island's development and the prosperity of Tobagonians amidst the
ongoing challenging economic environment exacerbated by the
Covid-19 pandemic.
At the beginning of this term, in 2017, we were given a mandate "to
do more with less" as we were faced with reduced resources as a
direct result of falling national revenues owing to a dramatic
decline in oil and natural gas prices below budgeted prices.
Our focus at the Division since then was to ensure prudent
management of our economy, facilitate improvements in our financial
infrastructures and operations, fostering an enabling environment
for private sector expansion while giving our entrepreneurs, the
necessary financial and technical support for their overall
success.
The data also supports this. Earlier this year, Tobago's GDP at
constant prices for 2019 was an estimated $1.77 billion, 1.4 per
cent higher than the revised estimate of GDP for 2018 of $1.744
billion.
The data also indicated that the share of Government activity in
Tobago's GDP was about 44 per cent in 2019 while the share of
financial services sector in Tobago's GDP sector accounted for
about 26 per cent in that year.
The figures suggest that the economy was poised for continuous
growth in 2020 prior to the onset of the pandemic. Even as the
pandemic emerged in March 2020, we managed to maintain this
momentum and implemented various policy measures to mitigate the
impact on the people of Tobago.
Although it was estimated that Tobago's GDP at constant prices for
2020 would decline by 14.3 per cent with the largest decline
expected in the tourism sector followed by the manufacturing sector
and the financial sector, the response from the Division was
immediate and targeted, as a suite of measures were recommended to
the Executive Council to facilitate the island's economic recovery
and a return to growth in the shortest time possible.
Apart from this, during the Covid-19 pandemic, we have ensured that
vulnerable persons as well as businesses on the island were offered
the necessary support in these challenging times. Financial support
was made through the provision of:
* $50 million to the Tobago Hotel Industry for financial support
and to facilitate maintenance and upgrade works, with an additional
$4m being allocated to the auxiliary services;
* $10 million Liquidity Support Loan Programme for the Tobago
Credit Unions to allow them to provide loans to their members at
favourable interest rates and flexible repayment periods;
* $50 million to fund the THA Tobago Regional Health Authority
(TRHA) with its Covid-19-related expenses;
* $5 million for the Enterprise Development Programme to assist
small businesses; and,
* Support for the agriculture sector in the sum of $7.6 million.
Beyond this, as Secretary, I have given focused efforts on
mobilising financial resources to accelerate the pace of the
island's development, so that for the first time ever in the
history of the Tobago House of Assembly, we have gained approval
for the issuance of a Bond totalling $300 million. This Bond is
expected to benefit the people of Tobago by providing the necessary
funding to complete a number of development projects.
Additionally, I have championed the creation of an Investment and
Public Private Partnership (IP3) Unit within the Division, as a
means for providing alternative financing to the island. Public
Private Partnerships (PPPs) provide an opportunity to leverage
private capital, expertise and innovation to deliver public goods
and services.
Currently, this Unit in collaboration with the Division of
Settlement towards developing the Shirvan Integrated Housing
Development (SIHD) project utilising the (PPP) modality to provide
approximately 250 affordable housing units with ancillary community
and commercial facilities, and requisite green spaces on
approximately 45 acres of land located at the Shirvan Estate. For
this integrated development a design-build-finance-operate-maintain
model is being pursued. The project, which is currently being
structured for the Transaction Phase, is included as a priority
item for execution in this fiscal year. Apart from the
aforementioned, I have also taken steps to improve the Assembly's
financial structures in an effort to streamline and improve the
payment process to our employees and suppliers.
Rest assured, that despite the prevailing circumstances, I remain
committed to continuing the island's developmental momentum and
improving the standard of living and quality of life of the people
of Tobago. This we will achieve by a combination of prudent
management of the Assembly's budgetary resources, utilising
innovative strategies to fund developmental activities in Tobago
and providing the necessary support to sectors impacted by the
pandemic in order to accelerate the pace of economic recovery and
to engender greater resilience in the Tobago economy.
Q: What are some initiatives you have introduced as Secretary of
Finance and the Economy that have positively impacted the overall
operations of the Division and that will benefit the people of
Tobago?
A: a) Modernising the Assembly's accounting Framework
I have a very strong passion for ICTs and for leveraging technology
to increase productivity and efficiency throughout the Division and
by extension the Assembly. I therefore sought to modernise the
Assembly's financial framework and accounting architecture. This
started with the adoption of the International Public Sector
Accounting Standards (IPSAS) and included the transformation of the
Assembly's Public Financial Management Framework (PFM) through the
implementation of digital solutions aimed at re-engineering and the
accounting structure. Several initiatives were undertaken including
the implementation of an Integrated Financial Management
Information System (IFMIS) for the preparation, presentation and
reporting of the Assembly's finances. Additionally, an
Assembly-wide implementation of the Automated Clearing House (ACH)
System was deployed, facilitating timely payments to internal and
external stakeholders.
The modernisation of the Assembly's financial and accounting
architecture will not only facilitate the timely payments to
suppliers and creditors within a targeted ten-day period, but will
also accelerate the transformation of the Assembly's accounts to a
comprehensive financial framework and enhance information
management.
b) Investment and Alternative Financing Mechanisms (IAFMs)
Another project that I am passionate about is the Assembly's
Investment and Alternative Financing Mechanisms (IAFMs). The
Division of Finance has direct responsibility for the management
and mobilisation of the Assembly's financial resources. To treat
with the perennial shortfall in funding for the island's
Development Programme I introduced the Alternative Financing
Modality comprising three (3) major initiatives Public Private
Partnership (PPP), the Tobago Infrastructure Investment Strategy
(TIIS) and Bond Financing.
PPPs leverage private capital, expenditure and innovation to
execute infrastructure and other projects. We have developed a
robust framework to advance this modality. The Division is
currently utilizing the Public Private Partnership modality to
execute the Shirvan Integrated Housing Development (SIHD) which is
expected to provide approximately 250 affordable housing units with
ancillary community and commercial facilities, and requisite green
spaces on approximately 45 acres of land located at the Shirvan
Estate. The Division is therefore solving the housing needs on the
island via this novel financing option.
The Tobago Infrastructure Investment Strategy (TIIS) is expected to
provide a transparent and coordinated framework for future capital
investment over the next twenty (20) years and will be a single
reference point for potential private sector partners domestically,
regionally, or internationally.
The next major activity under the IAFM is Bond Financing. The
Division of Finance will achieve a major milestone for Tobago with
the completion of the first ever Tobago House of Assembly (THA)
Bond. The Division has completed the necessary preparation and due
diligence for the issuance of the Assembly's first Bond on the
local market in the sum of $300M. Funding from the Bond will be
used to ensure that the island's capital development continues
unabated.
3. Is there any particular project you are excited to execute in
this fiscal year?
Answer:
In recent budget statements I introduced the concept of making
Tobago an Intelligent Island, leveraging ICT as an enabler of
socio-economic development. This initiative encompasses government
systems that are agile coupled with the necessary secure technology
backbone for island wide adoption and implementation. Ultimately,
collaboration and connectivity will improve operations across the
Assembly and between the Assembly and Central Government, as well
as ensure true ownership and accountability across all Divisions,
Departments and Agencies. In keeping with the vision to make Tobago
an Intelligent Island, the Division, through the Eco-Industrial
Development Company of Tobago (E-IDCOT) executed a Joint Venture
Agreement with the Telecommunications Services of Trinidad and
Tobago (TSTT) to establish a Tier 3 Data Centre at the Cove
Eco-Industrial Business Park. Additionally, a comprehensive study
was undertaken to guide the rollout of this mandate over the next
(4) years. I am also proud to announce that the construction of the
Data Centre is scheduled for fiscal 2021.
4. You mentioned the Tobago Bond as an undertaking by the
Division, can you provide an update and in light of the COVID-19
pandemic has Tobago reached its borrowing capacity?
Answer:
Subsequent to the formal approval from the Minister of Finance, the
Executive Council has approved the issuance of a TT$ 300M Bond to
finance a suite of capital projects that aims to advance the
Development Agenda of the Tobago House of Assembly.
Over the past months, the Assembly has been diligently working with
the Ministry of Finance and our Arranger, First Citizens to
complete this transaction. Currently, the THA is awaiting an
opinion from the Attorney General which is required by the Central
Bank before the formal placement of the Bond.
With the recent passage and proclamation of The Miscellaneous
Amendments (Powers of Statutory Authorities and Matters related to
certain Boards) Bill, 2020, the transaction is very near to
completion. Finalization should be within weeks of receiving the
Attorney General's opinion.
Additionally, in treating with the socio-economic impact and other
expenditure regarding the COVID-19 pandemic, the THA has not
borrowed to finance COVID-19 expenditure and as such, the borrowing
capacity of the Assembly has not been exceeded.
5. What are the plans for 2021 financially for the island?
Answer:
If I may borrow form the theme of my recent budget presentation in
June and my recent budgetary revision exercise, "Recalibrating Our
Priorities Towards a More Resilient Future" I outlined several
broad areas of focus for the budget including:
* Stimulating our Economy;
* Enhancing our Governance Framework;
* Revitalising the Tourism Sector;
* Revitalising Agriculture and Improving Food Security;
* Strengthening Small and Medium Enterprises;
* Building Strategic Digital Infrastructure;
* Enriching Educational Opportunities and Human Capital
Development;
* Preserving Health and Well-being;
* Expanding Housing Opportunities;
* Augmenting our Social Safety Net support;
* Strategic Investment in Physical Infrastructure; and,
* Environmental sustainability
Therefore, in light of the COVID-19 pandemic, for 2021 we will be
focused on recalibrating our resources to advance Tobago's
development momentum, in order to preserve the standard of living
and the quality of life of all Tobagonians and residents on the
island. Some initiatives as it relates to the Division of Finance
include:
* Intensify steps towards developing Tobago into an Intelligent
Island. The COVID-19 pandemic has significantly altered social
norms, and has bought to the fore the significance role ICT and
technology can play in enhancing our financing operations and
infrastructure. This is significant as we seek to truly leverage
ICT as an enabler of socio-economic development on the island.
* Upgrade the Assembly's Public Investment Management by improving
the Policy Cycle Framework. This initiative is to be done in
collaboration with the Inter-American Development Bank (IDB) and is
expected to align planning and expenditure priorities through the
introduction of a robust multiyear strategic planning and budgeting
framework;
* Continue to develop our procurement systems within the Assembly.
Strides have been made in rolling out the Public Procurement and
Disposal of Public Property Act as amended. In the upcoming fiscal
year, the Division of Finance intends to work closely with the
relevant authorities to address viable solutions for Public Private
Partnership transactions and for Electronic Procurement with the
assistance of our multilateral, regional and international partners
towards mitigating information asymmetry, increasing ease of access
and competitiveness and generating cost savings;
* Continue to provide technical support through the Strategic
Business Support and Development Unit (SBSDU) in the Division of
Finance and Economy as well as to continue to foster an enabling
environment that prepares SMEs to access and successfully compete
in external markets and facilitate access to e-commerce
opportunities that allows for improved market access and
e-payments;
* Continue to provide the necessary financial support to
entrepreneurs and additional financial support to Tobago's private
sector through the Venture Capital Equity Fund Limited which
supports non-traditional businesses;
* Continue to provide subsided factory space through E-IDICOT, for
our entrepreneurs and businesses to facilitate production and
expand their manufacturing capacity;
* Improve the ease of doing business on the island by the
introduction of a suite of measures; and,
* Increase foreign direct investment (FDI) to Tobago through
revisions and improvement to the Land License Regime.
6. Can you explain the budget process for Tobago?
Answer:
In accordance with Section 41(1) of the Tobago House of Assembly
(THA) Act 40 of 1996, in the month of June each year, the Division
of Finance and the Economy prepares the Draft Estimates of Revenue
and Expenditure of the THA for the upcoming Fiscal period, which is
presented in the Assembly Legislature by the Secretary of Finance
and the Economy. The Budget is crafted against the backdrop of the
international, regional and national economic climate and is
anchored on the Medium-Term Policy and Planning Framework (MTPPF).
The contributions from Civil Society Organizations (CSOs), as well
as responses from participants in the THA's Pre-Budget Survey, and
the submissions from all Divisions of the Assembly inform the
Budget Statement and assist in shaping some of the budgetary
priorities and Assembly policy in each Fiscal year.
In addition to data provided by the Central Statistical Office
(CSO) and the Central Bank of Trinidad and Tobago (CBTT),
Tobago-specific data is provided by the Economic Management and
Research Unit (EMRU) in the Division of Finance and the Economy.
The EMRU was established to provide data-driven support for the
establishment of policies and initiatives critical to the
sustainable development of the economy of Tobago. The Division has
produced annual Gross Domestic Product (GDP) data for Tobago since
2016. This data is important as it is used to support
evidenced-based policy decision-making across the Assembly.
7. How was the funding to the THA impacted by the reduction in the
budgetary allocation?
Answer:
The allocation to the THA for Fiscal 2021 was reduced by $148.6M.
Funding for Recurrent Expenditure was reduced by $117M and funding
for Development Programme was reduced by $31.6M. Following the
presentation of the National Budget by the Minister of Finance in
October, the focal areas for the Assembly were reprioritized in
accordance with the Assembly's budgetary allocation for the
particular Fiscal year.
Notwithstanding the budgetary funding gaps faced by the Assembly,
as an Administration, we remain steadfast in our commitment towards
ensuring that Tobago's developmental momentum is sustained as the
necessary socio-economic measures were implemented to return the
Tobago economy to a path of sustained economic growth.
This Administration therefore reviewed Tobago's allocation and the
implications of the budgetary reprioritization measures on the
island's economy in order to devise strategies and initiatives to
improve efficiency throughout the Assembly by optimizing existing
resources.
8. What are some things that the Division of Finance and the
Economy has done to assist Tobagonians in making better financial
decisions?
Answer:
The Division of Finance and the Economy encourages responsible
financial decision-making and promotes opportunities for wealth
creation, as we seek to enhance the quality of living of all
Tobagonians. The primary Unit facilitating this is the Financial
Literacy Secretariat. In order to fulfil its mandate to increase
the level of financial education of Tobagonians and increase the
savings rate on the island, the Division hosted a number of
initiatives including a Financial and Business Development
Programme where close to 80 SMEs from the manufacturing,
agro-processing, food production and service industries were
exposed to workshops on Financial Assessment and Business
Development; Strategic Business Planning and Development; Sales and
Bookkeeping; Marketing, Promotion; and Customer Retention. The
objective was to build the business acumen of entrepreneurs in
Tobago, thereby giving them a greater chance of building successful
businesses.
Additionally, in order to facilitate wealth creation in Tobago, the
Division partnered with a number of stakeholders including First
Citizens Asset Management Limited to host a series of Seminars
including the National Investment Fund Initial Public Offering
(IPO) Information Meeting, in order to inform Tobagonians of the
opportunities, risks and rewards associated with various investment
instruments as well as pertinent information on the IPO. Close to
120 persons attended the session, and a total of 230 Tobagonians
invested in the IPO, 170 of whom were new subscribers. The Division
also recently hosted the Tobago Money Matters Series which focused
on managing finances during COVID-19. Other initiatives include
Financial Education Outreach and Workshops; Financial and Business
Camps; and Financial and Business Tours for Primary and Secondary
School Students.
9. What was your biggest challenge in managing the Division?
Answer:
One of the biggest challenges would definitely be the
implementation of ICT throughout the Division. Early in 2017, I
sought to review and enhance our business processes across the
Division and we introduced and adopted new software to achieve
this. We have made incremental steps, however, COVID-19 has brought
to the fore the burning issue of digitization and as the champion
for making Tobago an Intelligent Island, it is my hope that this
objective will be fully realized in the shortest time possible. In
the meantime, however, we continue to work with my team at the
Division to facilitate the roll out of this initiative in order to
generate the most productive and efficient outcome for us all. I am
heartened by the advances that we have made and the investment in
new technology is beginning to bear fruit and has adequately
prepared us for the impact of the pandemic on the Division's
operations.
10. How long have you been in politics and how would you rate
yourself on a scale of 1-10 in terms of your performance.
Answer:
I was elected as Assemblyman in January 2013 and appointed
Secretary of Finance. Coming into the Assembly in 2013 as Secretary
of Finance and Enterprise Development, I was the youngest person to
have been trusted with such a responsibility. It was also a
significant moment for me, as preceding the decision to offer
myself for representational politics I worked as a technocrat in
the Division under the guidance of Dr. Anselm London. Following
success at the poles and being appointed as Secretary for Finance,
the transition was not difficult as the Division was familiar
territory since 2006; and I had the support of the senior managers
at that time.
Over the past seven (7) years, I have remained resolute in ensuring
that under my tenure, I advanced the island's economic expansion
and diversification thrust, provided support for private sector
expansion and ensured that the people of Tobago continue to receive
the best opportunities for wealth creation through financial
education and entrepreneurial opportunities through the provision
of financial and assistance.
As Secretary of Finance, I am pleased to spearhead the Assembly's
mandate to support private sector expansion on the island. The
Division has facilitated the training of over 200 Tobago
entrepreneurs in order to advance and increase their penetration of
national, regional and international markets. Also, for over ten
(10) years, the Division has supported the participation of Tobago
entrepreneurs at the Trade and Investment Convention (TIC) which is
the largest in the region and has afforded Tobago entrepreneurs the
opportunity to interface with national, regional and international
investors thereby enabling them to secure direct investment and
supply contracts with local and international companies.
Another major initiative under the Division is the Venture Capital
Equity Fund Limited (VCEFL). The VCEFL was established to support
private sector investments and strengthen qualified fledging
enterprises through public/private sector equity arrangements. To
date, the VCEFL has approved projects in the light manufacturing,
agriculture and tourism sectors with equity and capital investment
totaling approximately $13.5M.
Additionally, The Eco-Industrial Development Company of Tobago
(E-IDCOT) Limited was established to advance economic development
and transformation in Tobago, through the environmentally
sustainable production of goods and services on the island.
Cumulatively, the Cove Eco- Industrial and Development Business
Park is responsible for creating approximately 200 jobs in the
light manufacturing and processing sectors and advancing the
Assembly's economic diversification mandate. Additionally, E-IDCOT
was also responsible for completing a feasibility study for a
Commercial Cargo Port in Tobago that is earmarked for construction
in close proximity to COVE.
I was also responsible for preparing the Medium Term Policy
Planning Framework (MTPPF) 2019-2024, which is the Assembly's
socio-economic planning document, which will guide the island's
development in conjunction with the Tobago Infrastructure
Investment Strategy (TIIS). Additionally, a review of the past
economic data will suggest that the Tobago economy has done fairly
well over the past seven (7) years. Pre-COVID employment averaged
well below five percent (5%); inflation was contained; and
according to Moody's the Assembly maintained a positive operating
margin of approximately 10.8 percent of operating revenues and
managed the overall economic activity on the island to avoid any
severe recessionary activities.
In addition to spearheading these programmes and projects, as
Secretary of Finance I also have the opportunity to forge
meaningful partnerships with Governmental and Multi-lateral
Agencies.
It is within this context that I rate my performance over the past
term as 8.5. As Secretary of Finance and the Economy, I have
adopted a Kaizen approach and management style. As such, I will
continue to challenge my team to implement programmes and projects
to advance the island's development and enhance the quality of life
of all Tobagonians.
=================
V E N E Z U E L A
=================
VENEZUELA: Closes 2020 with 3,713% Inflation Rate
-------------------------------------------------
The Latin American Herald reports that Venezuela officially became
the country with the highest hyperinflation on the planet as it
wrapped up 2020 with a whopping accumulated inflation rate of
3,713% and 21.2% in December, Venezuelan Finance Observatory (OVF),
an entity overseen by the Finance Commission of the formerly
opposition-led Parliament or National Assembly (AN), data
revealed.
The OVF consumer price index (CPI) data kicked off 2020 with an
increase of 65% and experienced a deceleration over the next two
months through April when it reached the highest rate of the year
so far (80%), according to The Latin American Herald.
Even though this inflation rate is far below the ones registered in
2018 (1,698,844.2%) and 2019 (7,374%), it still reflects that the
country has not broken out of the hyperinflationary cycle it is in
since November 2017, the report notes.
To top it all off, the OVF is forecasting a new monetary
reconversion to take place any time soon, the report relays.
"We see a new monetary reconversion looming on the horizon. What
is under discussion is whether three, five, or six zeroes are going
to be slashed from the national currency to make the bolivar equal
to the US dollar. The truth is, under these circumstances, doing
the math has become a very complicated issue once again. Payment
systems have collapsed and our machines have not been conceived to
deal with figures this high. It's inevitable. I don't know when,
but it's going to take place this year," Jose Guerra, an opposition
lawmaker and head of the OVF, told reporters, the report relays.
Guerra pointed out that the depreciation rate of the bolivar was 5%
during December of last year, which implied a disconnection between
the devaluation and inflation rate, translating into a general rise
in the cost of living expressed in US dollars as a result, the
report discloses.
Lastly, Guerra said that monetary liquidity increased by 33% in
December, in line with the inflation rate. Notwithstanding, he
argued that the monetary base went up 1,134% or far below the
increase in consumer prices (3,713%) during that same month, the
report adds.
Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and
islets in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after
the death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
S&P Global Ratings, in May 2019, removed its long- and short-term
local currency sovereign credit ratings on Venezuela from
CreditWatch with negative implications and affirmed them at
'CCC-/C'. The outlook on the long-term local currency rating is
negative. At the same time, S&P affirmed its 'SD/D' long- and
short-term foreign currency sovereign credit ratings on Venezuela.
Moody's credit rating (long term foreign and domestic issuer
ratings) for Venezuela was last set at C with stable outlook in
March 2018. Meanwhile, Fitch's long term issuer default rating
for Venezuela was last in 2017 at RD and country ceiling was CC.
Fitch, on June 27, 2019, affirmed then withdrew the ratings due
to the imposition of U.S. sanctions on Venezuela.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2021. All rights reserved. ISSN 1529-2746.
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