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CONTENTS
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Puerto Rico to close 184 public schools amid crisis

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Opposition wins Bahamas general elections

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Alabama congressman seeks to tax remittances to the Caribbean

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Debts from Caribbean govts. sinking UWI

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IDB condemns Jamaica’s GSAT

bulletT&T bond rating downgraded by Moody’s
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Jamaica flood damage estimated at nearly J$ half-billion

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IMF says Jamaica bauxite under-taxed

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Jamaica superhighway racks up unpayable debt

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T&T’s JackWarner countersues CONCACAF for US$40m

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Jamaica police cars to run on LNG

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GraceKennedy aims for US patty market

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Calypso Rose wins World Music Award in France

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UNDILUTED pays tribute to John Maxwell by featuring two previous columns by him from the Hot Calaloo UNDILUTED archives:

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Hot Calaloo's Undiluted Vol. 15, "The Audacity of Hopelessness"

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Hot Calaloo's Undiluted Vol. 14, "Cuba's Benevolence versus US Belligerence"

 
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May 2017 

  Puerto Rico to close 184 public schools amid crisis

Puerto Rico is closing 179 public schools in a move expected to save more than $7 million amid a deep economic crisis that has sparked an exodus to the U.S. mainland in the past decade, officials said Friday.

More than 27,000 students will be moved elsewhere when their schools close at the end of May, said newly appointed Education Secretary Julia Keleher.

"We have a fiscal crisis and few resources and we've spent 10 years handing out nearly $3 billion in a system that hardly has any books," she said. "We cannot keep doing what we're doing because we don't have the resources."

The news about the school closures raised concerns it could speed up the ongoing exodus from Puerto Rico. Nearly 450,000 people over the last decade have already left for Florida and other parts of the U.S. mainland to flee the worsening economic crisis.

It is expected in part lead to millions of dollars in savings a year for an education department that represent nearly 30 percent of Puerto Rico's $9 billion budget. Officials shuttered 150 schools over the span of five years from 2010 to 2015.

Puerto Rico currently has a total of 1,292 public schools that serve 365,000 students. The island has seen its school enrollment drop 42 percent in the past three decades, and an additional 22 percent drop is expected in upcoming years, according to a report that the Boston Consulting Group submitted to the previous administration to help restructure Puerto Rico's education system.

Much of the drop was the result of parents moving to the mainland U.S. in search of jobs and a more affordable life, as well as thousands of teachers being recruited from the island for their bilingual skills. The island's low birth rate also is expected to keep driving down enrollment.

Overall, Puerto Rico has $73 billion in public debt accumulated in part by previous administrations borrowing money to cover budget deficits. By comparison, the U.S. city of Detroit had less than $20 billion in debts when it filed for bankruptcy in 2013, which was the biggest U.S. municipal bankruptcy ever.

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Opposition wins Bahamas general elections

The opposition Free National Movement (FNM) led by Dr. Hubert Minnis are the unofficial winners of the 2017 Bahamas election.

The FNM crushed the ruling Progressive Liberal Party (PLP) and Prime Minister Perry Christie in an election that saw the Bahamas following the trend that’s occurred at polls in the English-speaking Caribbean recently where voters have ousted the incumbents in Trinidad & Tobago, Jamaica, St. Kitts & Nevis, St. Lucia, Guyana, Montserrat and nearby Turks and Caicos. The FNM won 34 seats Tribune reports indicated, including the seat of Christie, compared to 5 for the PLP despite issues with ballots during the election Wednesday that caused voting to be temporarily suspended and hours extended at some polling stations. The other parties won no seats. 

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Alabama congressman seeks to tax remitances to the Caribbean

Obviously under Trump’s anti-immigrant influence, Alabama Congressman Mike Rogers on April 21st, introduced a bill in the US Congress that would impose a 2 percent fee on all remittances headed  to Latin America and the Caribbean. HR 1813, or the Border Wall Funding Act of 2017, is geared to jumpstart the funding of the much touted Donald Trump Border Wall. The bill has been referred to the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations even as money transfer companies worry about the implications.

Remittance or money transfers to the Caribbean and Latin America continued to see the most rapid growth rate according to latest figures from 2015 data analyzed by the World Bank. Officially-recorded remittance flows to the Latin America and the Caribbean region increased by 4.8 percent to $66.6 billion in 2015.

 

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Debts from Caribbean govts. sinking UWI

Caribbean governments owe the University of the West Indies (UWI) more than US$100 million and, as a result, the regional tertiary institution says it is “very concerned” about the situation.
UWI Vice-Chancellor Sir Hilary Beckles, presenting his report to the University Council, said last year a company was contracted to look at the financial strength of the university, which has campuses in Barbados, Jamaica and Trinidad and Tobago.
He said the company reported that the university was facing financial challenges and there must be restructuring of its internal operations to generate more revenue.
“They are saying that we are going to be in significant financial difficulty unless we are able to get an annual injection of US$75 million,” he said.
The debt owing to this university by the governments of the Caribbean is US$105 million,” Sir Hilary said, adding, “they are saying to us if we don't collect these receivables, we are going to be in trouble as a university”.
Sir Hilary described the financial situation as a damaging situation “because without a budget there is no campus”.
The Barbadian-born academic said that during a recent meeting of the University Grants Committee with Caribbean governments “unfortunately all of our budgets were not discussed because not all governments were able to make commitments, an unfortunate development, that has never happened before”.
He said the university will have to engage new instruments to raise the required capital for the next five-year developmental plan.
Sir Hilary said that regional governments were contributing less than 50 per cent to the overall operations of the UWI.

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IDB condemns Jamaica’s GSAT

THE Inter-American Development Bank (IDB) has made a formal recommendation to Government to abandon the much-criticised Grade Six Achievement Test (GSAT), which it said is failing to adequately prepare students to function in a technologically driven world. Grade Six Achievement Test (GSAT) is Jamaica 's national high school entrance examination. It is usually taken in March. with the results are usually released in June. The GSAT replaced the UK 's Common Entrance Examination i

n 1999.IDB Country Representative Therese Turner-Jones said what is being taught about the work world in Jamaica is not where it is headed. She said Jamaica and the Caribbean are behind in an era where artificial intelligence, and manufacturing, which does not involve human beings and agriculture that can be done in buildings, are taking place.

“There's a huge gap in our knowledge, so it has to start really early. Get rid of GSAT. Teach science, language skills and math,” she urged, while recommending that Government adapt the Programme for International Student Assessment (PISA).

PISA is an IDB programme which evaluates, every three years, what 15-year-old students know and can do in science, reading, and mathematics.

“Introduce that exam and test our kids at age 15, not at 11 when most kids are barely out of [diapers]. Test them at that point so that they can basically do an international comparison across the rest of the world. It's not okay to say we are better than Trinidad and Tobago. So what? We want to be better than Finland which gets the best results in STEM (science, technology, engineering, and mathematics). So that's where we want to be and that's where we have to take the mindset in education,” Turner-Jones said.

Turner-Jones added, too, that teaching methods and how teachers are trained will also have to evolve, noting that students are being taught in a “very archaic way”.

“…We shouldn't be teaching kids multiple timetables. We have calculators to do that; we have algorithms to solve problems. There are other things we ought to be doing to make sure that the brains of our kids are developed to the maximum potential.”

Director of the National College for Educational Leadership Rosemary Campbell-Stephens agreed, saying that GSAT has outlived its usefulness.

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T&T bond rating downgraded by Moody’s

 Trinidad and Tobago has been slapped with consecutive downgrades by Moody’s Investors Service. It  revised its previous Baa3 rating to Ba1, a rating deemed by investors as “junk” status. The New-York based rating agency has however revised the country’s outlook from negative to stable.

The downgrade was driven by three main factors, including ineffective economic policies; increased borrowing, which has resulted in sustainable debt levels; and a significant decline in oil production.

According to Moody’s, with the fall in oil and gas prices, energy-related government revenues fell to only one per cent of GDP in the 2016 fiscal year, from eight of GDP in the previous fiscal year. Noting that current revenues declined 28% over 2015-16, the agency highlighted some of the economic measures introduced by the Keith Rowley administration, but stressed that they were insufficient to ease the economy’s dependence on the energy sector.

“In response to the fall in revenues, the government reduced gasoline subsidies and current transfers. Still, these measures have not changed a rigid expenditure structure, in which wages, subsidies and transfers account for 70% of total government spending. Furthermore, total expenditures will continue to increase this year amid higher debt servicing costs and larger capital expenditures. The rating agency also raised concern about Trinidad and Tobago’s declining oil production and limited investment prospects, saying that it had caused deterioration in the country’s medium-term growth prospects.

Noting that oil production levels had declined even before a recent drop in energy prices, the rating agency projected minimal growth, stressing that urgent investment was needed to revive the critical sector.

 

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Jamaica flood damage estimated at nearly J$ half-billion

DAMAGE to the island's road network and other infrastructure from recent heavy rains has been put at close to half-a-billion dollars, according to a preliminary report presented by Local Government Minister Desmond McKenzie in the House of Representatives, yesterday.According to McKenzie, the National Works Agency assessed damage to the main road network across 10 parishes at J$352 million, with Clarendon, St Catherine and St Elizabeth having the most damage.

McKenzie said technical teams from his ministry and local authorities have also determined that an additional $139.8 million will be needed to fix other infrastructural damage in St Thomas, Clarendon, and St Elizabeth.

Once again poor drainage was blamed on the flooding from the heavy rains which forced 49 people to abandon their homes and seek shelter with friends and relatives. However, McKenzie said the flooding was not necessarily a result of blocked drains.

 

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IMF says Jamaica bauxite under-taxed

An estimated US$18 million ($ 2.3 billion) in revenues annually has been lost with the government's decision to put in place new taxation arrangements for bauxite, the International Monetary Fund (IMF) indicates. In its First Review under the Standby Arrangement for Jamaica, the IMF says the decision to abandon the levy for profit-sharing arrangements is regressive.

“The recent decision to provide discretionary waivers by further widening leftover exemptions on the bauxite levy created a revenue loss of over 0.1 per cent of GDP per year, leaving the bauxite sector undertaxed, and potentially undermining the hard-earned gains from the elimination of a range of tax incentives in 2014,” the Fund states in its review.

It noted that local authorities explained that the recent changes are part of a tax regime overhaul for extractive industries where the sector will shift towards profit taxation in the medium term.

The IMF stressed that Jamaica should continue “striving for a broad-based tax system with transparent and equal rules, while avoiding discretionary waivers for particular sectors or industries”.

Previously, in 1974, the levy was set at seven per cent of the selling price of aluminum ingot, instead of the previous method of computing the tax based on profit negotiated between the government and the bauxite companies.

As a result, the tax rate increased 480 per cent between 1973 and 1975, from $2.50 to $14.51 per ton. Consequently, taxes on the sector increased to 37 per cent of government revenue.

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Jamaica superhighway racks up unpayable debt

IT could take at least another 20 years before developers of the north-south link of Highway 2000 starts making a profit as they are spending an estimated US$30 million annually on debt servicing, almost twice its revenues of US$18 million, a House committee was told yesterday.Managing director of the National Road Operating and Constructing Company (NROCC) Ivan Anderson outlined the losses the developer, Jamaica North South Highway Company (JNSHC), was making at yesterday's meeting of the Public Administration and Appropriations Committee (PAAC) at Gordon House.

“The debt service alone is significantly more than the revenues being generated, and that's why the project sought to provide some additional land development incentive for the developer. We don't estimate that in the next 20 years the developer will make any profit at all. If you take the US$18 million and US$30 million of debt servicing, and US$15 million operating cost, you're in a no-win situation for a very long time,” Anderson stated. China Harbour Engineering (CHEC), JNSHC's parent company, constructed the highway — which significantly cut the travel time to the north coast — at a cost of US$730 million.

At the same time, Anderson revealed that NROCC has racked up US$439 million in debt since the start of Highway 2000 project in October 2003. He said that since 2010 the Government has been paying US$40 million per annum from the Consolidated Fund to reduce that liability.

In the meantime, construction is to start by the end of this fiscal year on the remaining 28 kilometres linking May Pen, Clarendon, to Williamsfield, Manchester, for the east-west section of the highway. That project is being financed by a US$188-million loan from the China Exim Bank. Public consultations on this segment are to begin next week, Anderson informed the House committee.

 

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T&T’s JackWarner countersues CONCACAF for US$40m

Disgraced former football supremo, Jack Warner, has launched a US$40 million countersuit against continental governing body, CONCACAF, and FIFA Council member Sunil Gulati, for “persistent defamation of character.”In response to a US$20 million lawsuit filed against him last week by CONCACAF in a US Federal Court, the 74-year-old said he had no choice but to instruct his lawyers to initiate legal proceedings.

He argued in a statement that the most recent corruption allegations made against him were “repetitive and ancient”, and said he would fight to protect his name and that of his family “to the very end.”

“I have been slaughtered for the past six years and have remained silent, ignoring my legal options to respond to the atrocities that have been perpetrated against me by men of the lower ilk,” Warner said. “And so the time has come for me to respond and hence the lawsuit against CONCACAF and Gulati in his personal capacity.”

Only last week, CONCACAF moved to recover millions of dollars the organization claimed had been obtained by Warner and former general secretary, American Chuck Blazer through corruption.

The lawsuit comes against the backdrop of ongoing efforts by the United States Department of Justice to have Warner extradited from his native Trinidad and Tobago to also face charges of racketeering, wire fraud and money laundering conspiracies.

However, Warner said the most recent lawsuit was simply more trumped up charges stemming from old grouses, and was nothing but a means of distracting from the under-achievements of the organisation in recent times.

Warner led CONCACAF and the Caribbean Football Union for 21 years and became also became a powerful FIFA vice-president before resigning both posts amidst the torrid cash-for-votes scandal in 2011.

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 Jamaica police cars to run on LNG

The process to retrofit Jamaica's police vehicles to allow for the use of liquefied natural gas (LNG) will begin shortly. National Security Minister, Robert Montague, says the procurement of the conversion kits to facilitate the process has been completed.

“Ten cars are to be converted, starting within the next 30 days,” he said in his contribution to the 2017/18 Sectoral Debate in the House of Representatives on April 26.

Minister Montague had announced the initiative last year.

LNG is said to be the cleanest fossil fuel, and its use offers a significant contribution to improved air quality and public health through the reduction of emissions in the environment.

Meanwhile, the National Security Minister indicated that 114 motor cars have been repaired and more cars and bikes will be procured for the force. He noted that 17 police stations were rehabilitated in the last financial year and another 30 will be renovated.

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GraceKennedy aims for US patty market

 Lookout world. Here comes Jamaican patties!

GraceKennedy is now manufacturing and distributing frozen patties to the United States as part of its latest thrust in securing a place in the global market. Chief Executive Officer Don Wehby reported that the conglomerate has partnered with a co-packer of Jamaican heritage in the US to manufacture the patties. The company, which currently distributes to over 60 countries, says it is seeking to carry its newest product across the globe and has already begun distribution in the US.

Wehby said the patties can now be found in South Florida, including Miami-Dade, Broward and Palm Beach counties; Central Florida in the Orlando/Orange county area; and in most independent chains supermarketsGrace patties, also branded turnovers to better reflect the wider American market, are also listed in Winn-Dixie supermarkets.

“We have also begun exploratory sales in the Washington DC, Maryland and Virginia areas with a listing in 16 Shoppers supermarket stores,” he said.

GraceKennedy's 2016 annual report says the patties, which are currently produced in three flavours – spicy beef, mild beef and curry chicken – were introduced in the south-east USA on a test basis in March 2016. The company said that after extensive research and testing, the patties have received positive reviews on innovative package design and product taste.

GraceKennedy, which styles itself as the ambassador of Caribbean food globally, in its report said the pastry is rapidly being discovered and enjoyed over the world. It estimates the packaged frozen patty retail market size to be well above US$50 million and is aiming for 20 per cent of that amount or US$10 million from patty distribution outside of Jamaica.

Currently Grace patties are priced between US$2.99 and US$3.69 for two patties in each retail box.

There are no plans to introduce Grace Patties in Jamaica. The focus is on growing the product in our international markets, starting with the USA. We believe there is a significant market of core Jamaican consumers as well as potential mainstream consumers in developed markets.

 

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Calypso Rose wins World Music Award in France

Veteran calypsonian Calypso Rose has won the World Album of the Year award at the Victoire de la Musique award ceremony in France. The award is considered the French equivalent of a Grammy award.

Rose’s album, Far from Home, competed against rock group Acid Arab with their album “Music of France” and Rokia Traore with her album “Born So”. Far From home, the platinum-selling album was released on the Because Music label on June 3 last year.

Rose, 75, began singing at the age of 15. She was born in Bethel, a small, relatively in-land village in Tobago. As of 2011, she is the most decorated calypsonian in Trinidad and Tobago’s history, and was awarded the Trinidad and Tobago Gold Humming Bird Medal, an award given to Trinidadians “for loyal and devoted service beneficial to the state in any field, or acts of gallantry”.

 
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