Global Insight Perspective

Significance

Patrick Manning's administration is facing a parallel corruption scandal to the one that ended the United National Congress (UNC) government in 2002.

Implications

Elections are constitutionally due in October 2007, giving the government time to claw back support. For example, corruption scandals hit Chile's government mid-point in President Ricardo Lagos's term, but the administration restored its support levels by throwing support behind the judicial protest and refusing to protect the accused.

Outlook

The UNC will try to capitalise on the corruption case, but it is already severely stained by earlier cases, one of which continues to implicate leader Basdeo Panday. A revival of the Manning government is a possibility, but it will also need to make progress in tackling the country's crime problem, a major concern for voters and foreign investors alike.

Resignation Contains Cabinet Crisis

Trinidad's Prime Minister Patrick Manning has accepted the resignation of Eric Williams, who is facing bribery charges in relation to the allocation of government oil contracts some two years ago. The outgoing secretary for the Caribbean country's key industry appeared before Magistrate Lianne Lee Kim yesterday after handing himself in to authorities when his arrest was ordered (see Trinidad and Tobago: 9 January 2005: Police Order Arrest of Trinidad's Energy Minister). Former Public Works and Communications Minister Franklin Khan was previously indicted on suspicion of awarding oil contracts in return for kickbacks (see Trinidad and Tobago: 25 November 2005: Former Minister Charged with Corruption over Trinidadian Oil Contracts). Local Councillor Dansam Dhansook was behind the exposés against both former cabinet members, which have inflicted damage on the Manning administration. Although Khan was no longer a member of government when the scandal broke, he was still serving as Chairman of the twin-island state's ruling People's National Movement (PNM). He stepped down as party chief in early December last year. Separate allegations were launched against Williams in June last year by opposition Senator Carolyn Seepersad-Bachan, who accused him of failing to investigate claims against Venture Production (Trinidad) Ltd (VPTL), from which oil was allegedly being looted. She also claimed that the firm was guilty of exaggerated production numbers and demanded an audit. In late December 2005, the company finalised its withdrawal from the Caribbean country.

In a statement distributed to media, Prime Minister Manning promised to name a replacement to head the Energy and Energy Industries Ministry 'shortly', with the aim of calming investors in the sector. Concerns regarding the fairness of future contract bids will be difficult to allay. Key in that process is ensuring that those accused are thoroughly investigated and do not receive any preferential treatment because of their status. Opposition United National Congress (UNC) leader Basdeo Panday is trying to capitalise on developments. He also appeared in court yesterday charged with corruption. The UNC chief, who has refused to step aside despite his indictment, is accused of failing to declare his assets in 2002, when the Piarco International Airport scandal became public. In late November, eight individuals and two enterprises were charged with fraud in a Miami (United States) court in connection with apparently rigged bids to expand Trinidad and Tobago's international airport in 2002 (see Trinidad and Tobago: 1 December 2005: U.S. Court Issues Charges in Trinidad Airport Corruption Case). Panday, who is charged with violating the Integrity in Public Life Act (2000), asserted to local daily Trinidad Newsday yesterday that the accused energy minister received a 'very different' kind of treatment to that allegedly afforded to the elderly politician and his wife. He claims that heavily armed police came to his home to take him into custody alongside his wife in May last year.

Outlook and Implications

The implication of such senior figures in a corruption scandal harms efforts by the government to build investor confidence and improve perceptions of transparency in the Caribbean country. Global watchdog Transparency International ranked Trinidad and Tobago 59th in terms of perceptions of corruption in 2005, worse than Colombia. In 2001, before the seriousness of the Piarco airport corruption scandal became apparent, Trinidad ranked a far superior 31st place. Trinidadian voters aimed to open a new chapter in 2002 with the election of the PNM, but the ruling party has now been tarnished by parallel revelations to those that stained the UNC.

Elections are constitutionally due by October 2007. In theory, therefore, Prime Minister Manning has time to clean up the reputation of his administration. However, the case will still hang over him, since court proceedings are often protracted, a reality to which the Piarco case can attest. Early elections cannot be ruled out, but calling them at this moment would be a major gamble for President Manning. Parallel strains to his leadership come from Trinidad's spiralling crime problem, outlined as a priority for the administration on announcing its budget for 2006 (see Trinidad and Tobago: 3 October 2005: Budget 2006: Trinidadian Government Uses Oil Abundance to Bolster Finances, Tackle Crime). With his attention focused on regional leadership initiatives, namely promoting the delayed Caribbean Single Market and Economy (CSME) in tardy territories (see Caribbean: 9 January 2006: Caribbean Single Market Celebrates Partial Implementation), a premature vote would be an unlikely course of action. More probable is a cabinet reshuffle to revive the ailing administration. A likely strategy is to give support to the legal process while asserting that the outgoing minister is innocent until proven guilty. Meanwhile, Williams is seeking to rescue his political career by co-operating with investigators in conjunction with attesting his innocence.

Contact: Raul Dary

24 Hartwell Ave.
Lexington, MA 02421, USA
Tel: 781.301.9314
Cel: 857.222.0556
Fax: 781.301.9416
raul.dary@globalinsight.com

www.globalinsight.com and www.wmrc.com