VZCZCXRO3755
RR RUEHGR
DE RUEHSP #0398/01 2461725
ZNR UUUUU ZZH
R 021725Z SEP 08
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC 9379
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHDG/AMEMBASSY SANTO DOMINGO 2629
RUCNCOM/EC CARICOM COLLECTIVE

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000398 
 
SIPDIS 
 
SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EFIN EINV EAIR SOCI TD
 
SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS FOR MID-JULY THROUGH 
MID-AUGUST 2008 
 
The following were notable economic issues in Trinidad & Tobago during 
the second half of July and first half of August. 
 
¶1. Inflation reaches 11.7 % - a 14-year high 
¶2. S&P raises T&T's long-term currency credit rating to 'A' 
¶3. Hindu Credit Union's Assets frozen; investigation ensues 
¶4. 1,000 Dengue Cases, GOTT Insists "No Major Crisis" 
¶5. Security breached at Trinidad's Airport 
¶6. USTDA awards US$390,572 grant to the Airport Authority 
¶7. GOTT proposes US$2.5 billion highway project 
¶8. Denham Capital invests $8 million in CariSal facility 
 
 
¶1. Inflation reaches 11.7 % - a 14-year high 
-------------------------------------------- 
Headline inflation climbed to 11.7 percent (year-on-year) in July, up 
from 11.3 percent the previous month.  Food prices continue to drive 
inflation, with food sub-indices ranging as high as 60 percent for 
bread and cereals, while core (non-food) inflation remains historically 
high at 6.2 percent.  Although external factors explain much of the 
food inflation, the loss of local crops from severe seasonal flooding 
in recent days will add upward pressure on produce prices in the months 
ahead. The Central Bank opted not to increase interest rates in 
response to the July numbers, having raised rates and cash reserve 
requirements in late July and citing evidence that private sector 
credit growth is slowing.  In recent months, GOTT ministers have 
dismissed Central Bank calls to slow the pace of project spending in 
response to rising inflation, arguing that this would only slow T&T's 
progress toward achieving developed country status by 2020. 
 
¶2. S&P raises T&T's long-term currency credit rating to 'A' 
--------------------------------------------- -------------- 
Standard and Poor's (S&P) raised T&T's long-term foreign currency 
sovereign credit rating from 'A-' to 'A', citing continuous and strong 
fiscal and external balances supplemented by a booming energy sector as 
the primary reasons for the upgrade.  More specifically, S&P noted 
T&T's improving debt profile and the performance of several 
public-sector enterprises, including Petrotrin, National Gas Company, 
and Caribbean Airlines.  T&T's ratings are constrained, however, by the 
slow pace of economic diversification, a high non-energy deficit (15% 
of GDP in 2008), underperforming public-sector enterprises, such as the 
Water and Sewage Authority (WASA), and a lack of transparency and 
governance, particularly within public-sector enterprises. 
 
¶3. Hindu Credit Union's assets frozen; investigation ensues 
--------------------------------------------- -------------- 
On July 23, Justice Nolan Bereaux froze the assets of the Hindu Credit 
Union and appointed a provisional liquidator for the organization's 
assets.  Ernst and Young was appointed to assess the value of the 
firm's assets. According to GOTT officials, the judge's ruling was 
supported by HCU's board members.  The government's action comes three 
years after credit union members started demanding that HCU return 
their deposits.  An investigation by the Commissioner of Co-operative 
Development revealed a number of irregularities in HCU's operations. 
In addition, HCU has been involved in legal proceedings over an 
outstanding debt to the Export-Import Bank of the United States for 
US$4.2 million. 
 
 
¶4. 1,000 Dengue Cases, GOTT Insists "No Major Crisis" 
--------------------------------------------- -------- 
Despite a number of recent cases and two confirmed dengue-related 
deaths, the Chief Medical Officer (CMO) at the Ministry of Health 
insists "there is no major crisis" in Trinidad and Tobago.  Sensational 
media reports insist, however, that T&T is experiencing an outbreak and 
question the Ministry of Health's ability to address it.  The CMO 
confirmed that there have been close to 1,000 reported cases of dengue 
this year, primarily type-3, but explained that dengue fever is 
cyclical, with upsurges occurring every 6 years.  The last upsurge was 
in 2002 when at a comparable point in the year, there were 2,000 
reported cases.  Knowing that T&T would experience an upsurge in dengue 
cases this year, the GOTT intensified its vector control programs and 
launched a public awareness campaign.  It has called for a nationwide 
clean-up aimed at eradicating the mosquito threat.  Lack of funding, 
however, has hindered participation.  At least one member of the 
Embassy community has contracted dengue. 
 
¶5. Security breached at Trinidad's Airport 
------------------------------------------ 
The Airports Authority of Trinidad and Tobago reported that security at 
Piarco International Airport was momentarily breached on July 27th.  An 
unauthorized man jumped a fence and proceeded to board a parked 
American Airlines aircraft via a flight ramp.  The aircraft was bound 
for Miami International Airport.  Ramp attendants spotted the man as he 
boarded the plane and notified security.  Airport security removed the 
shoeless man, a psychiatric outpatient, from the plane and placed him 
 
PORT OF SP 00000398  002 OF 002 
 
 
under arrest. 
 
¶6. USTDA awards US$390,572 grant to the Airport Authority 
--------------------------------------------- ------------ 
On Monday July 28th, USTDA awarded a US$390,572 grant to the Airport 
Authority of Trinidad and Tobago (AATT) to formulate a strategic 
development plan for the creation of aircraft maintenance and air cargo 
facilities at the Piarco International Airport (PIA).  The development 
of an aviation service center at PIA will enable the AATT to 
accommodate the anticipated continued growth in air cargo volume and 
diversify economic activity at the airport.  It also will assist the 
AATT in achieving its goal of making Piarco a regional 
maintenance/cargo hub. 
 
¶7. GOTT proposes US$2.5 billion highway project 
--------------------------------------------- -- 
Minister of State in the Ministry of Works and Transport, Roger Joseph, 
announced that the GOTT plans to undertake a 5-year, TT$15.4 billion 
(US$2.5 billion) National Highways Program.  Scheduled to begin this 
year, the highway project includes plans for six major highways and 
will represent the largest capital development project in T&T's 
history.  The Ministry anticipates opening the project up to 
international bidders during the procurement stage.  The project is 
expected to introduce a toll system to Trinidad to support road 
maintenance.  Earlier this year, 3M America expressed interest in the 
highway project, hoping to supply GOTT with the technology to support 
the toll system as well as a road surveillance system. 
 
¶8. Denham Capital invests $8 million in CariSal facility 
--------------------------------------------- ----------- 
U.S. venture capital firm Denham Capital announced that it willinvest 
up to TT$50 million (US$8 million) in T&T-based CariSal Investment 
Holdings Limited, a leadng manufacturer of ice-melt products. Denham 
Captal's financingwill enable CariSal to complete th construction of 
its calcium chloride/caustic soa complex in Point Lisas, Trinidad. 
The facility,which will be the largest dry calcium plant in the 
Western Hemisphere, is epected to be operational by 2010.  CariSal has 
already signed an agreement to provide caustic soda to Alcoa.  With 
this investment, Denham Capital becomes the majority owner of CariSal. 
Earlier this year, Denham Capital provided financing to EthylChem to 
build a one billion gallon-per-year fuel grade ethanol dehydration plan 
in Point-a-Pierre. 
 
AUSTIN