Vincent Cabrera, President of the Banking Insurance and General Workers Union issued the following statement on the government’s proposal to divest shares of First Citizens Bank.
The deputy chief executive officer of First Citizens Bank has been featured as welcoming the Finance Minister’s budgetary proposal to divest State owned shares at that financial institution.
She professed her anxiety for “ordinary” citizens to own shares. Media enquiries to the representative Banking, Insurance and General Workers Union have focused on what objections the Union could have to its members becoming shareholders at that institution.
The Union has made it clear that it is not in favour of any divestment of State owned shares at the Bank. We were not in favour of divestment when the former regime indicated such intentions and we are certainly not in favour now of the divestment proposal coming from a government that seems to have adopted the economic policy of the former government rather than carrying out any real and meaningful change.
Divestment to us is a method of beginning the wholesale privatisation of First Citizens Bank. Divestment may appear to be quite rational and well-intentioned. The truth is that this is opening the way to foreign ownership of shares in an institution which is of great strategic value to the government and people of Trinidad and Tobago.
We reject any argument that the Government has no business being in the banking business for two reasons.
Firstly, too many financial institutions locally and internationally have gone belly up under private ownership. The government locally and internationally has utilized taxpayers’ funds to bail out these institutions some of which has been described as being too big to fail.
Secondly, the present government is about to embark on the creation of yet another State owned bank vaguely described as a national infrastructure bank, despite the existence of the Central Bank. It is quite clear that when a Government wants to rely on a State financial enterprise it will do so regardless of its view on privatisation being desirable.
The notion that the effort to make First Citizens shares available to the public is not as laudable as it first seems when we refer to the White Paper of 1973, the White paper of 1975, The Bobb Report of 1985 and the Rampersad Report. It would seem that after individuals like these and Frank Barsotti, there are no real thinkers remaining on the national landscape.
So many intellectuals or those who claim to occupy such a position have simply adopted the Reagan and Thatcher mantra of privatisation for all. They do not understand that Trinidad and Tobago possesses a skewed, imperfectly competitive economy, a concentrated labour market with no real active labour market policies and a real unavailability of market and economic information. Solutions which may work well elsewhere will not necessarily result in the same level of success here.
The deputy chief executive officer of the First Citizens Bank has appealed to the basic value of individualism which resides in members of the public as well as the employees of that institution, when she dangles before them the option of increasing their shareholder value.
To her, innocently, nothing is wrong with that. If the truth be spoken there is an option of the State owning these shares collectively on behalf of all citizens. The truth is regardless of how much education and awareness is imparted to employees or to the public, we will not all own shares.
Those who have will always have a more than fair shake than those who do not have; and those who have a lot will have an unfair advantage over those who have much smaller quanta of funds in the form of disposable income or available cash for the purchase of shares.
The level of equity in our society will not be increased but rather there will be more inequity in the society if we proceed on this basis with divestment of State shares in the various sectors; this social dimension has so far been absent from the dialogue of the Finance Minister and this erstwhile CEO.
Her conclusion that it is time to return the bank’s shares to the private sector is shaky to say the least. When Dr. Eric Williams bought the shares of BOLAM, the Bank of London and Montreal, it was in order to give the ordinary man some measure of ownership in one of the Apex industries.
Certainly, the Trinidad Co-operative Bank did not follow the same model as the ordinary private sector owned financial institution. In the case of the Workers Bank and the Worker’s Bank 1989, that was a unique co-operation between State funds and workers money.
A conversation with the Seamen and Waterfront Workers Trade Union (SWWTU) and the National Union of Government and Federated Workers (NUGFW) as well as other trade unions which were involved in that effort will reveal enlightening information.
The people of Trinidad and Tobago have contributed literally many millions of dollars to have the First Citizens Bank succeed, through the process of successful financial engineering, which was orchestrated by the Central Bank.
The citizens have also supported the Bank by doing business with it at a time when the Bank had to extol the virtues of being guaranteed by government funds. Today, there are many new faces with new values opposed to collectivism and State ownership of shares.
But those who do not understand from whence they have come will not care much for where they are going when greed and selfishness seem to be the accepted modern values. We accept that transformation is necessary, but must transformation be defined in terms of selling off our national patrimony for short term gains?
Or, do we define transformation in much more meaningful terms, understanding that there are valid strategic reasons for the government to hold on to these prized shares even though there may be some changes to agreed objectives?