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Finance

Gold & Oil to back new Digital Currency, BRICS

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By Shanieka Smith

Staff Writer

 

 

Discussions surrounding a collaboration involving Brazil, Russia, India, China, and South Africa to create a new currency have been on the lips of people right around the world. The currency, to be named BRICS, is a proposed alternative to the US Dollar.

The digital currency was first brought up in 2010 but recently resurfaced in 2022 as leaders from the five nations started to discuss the prospect.  The plan would be to back the currency with commodities like gold and oil.

As an alternative, BRICS would be designed to provide greater stability and independence from the US dollar.  Some financial experts believe the currency would eventually challenge the power of the US dollar as the world’s reserve currency.

There is some hesitation as financial experts and economists argue the feasibility of BRICS.  Also of concern is whether an agreement on policy can be made between these five different nations.

To date, no final decision has been made but as the global economy changes, the possibility becomes more actualized.

During a Business Forum between India and Russia in New Delhi last week, Deputy Chairman of Russia’s State Duma Alexander Babakov said the BRICS nations will reveal more at a summit in August.

These claims have not yet been confirmed by the BRICS leaders.

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Finance

Largest ever Nat’l Budget to end on $436 million

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Dana Malcolm 

Staff Writer 

After two increases the Turks and Caicos budget is expected to end the financial year with expenditure below $440 million according to Washington Misick, TCI Premier and Finance Minister. 

Misick tabled the fourth and final Supplementary Appropriations Bill in the House of Assembly on March 21 and the debate began on March 24. With that Bill the premier sought to reduce the budget from $442 million to $436.29 million. 

The budget had increased rapidly in the earlier quarters of the fiscal period, then it sunk. 

The initial budget earmarked $424.3 million for the year with the expectation that the year would end in a deficit. But during the first supplementary appropriations bill in September 2023 that was raised by $13.4 million bringing it to a grand total of $437.6 million.

That extra money was to be used for the following:

  • $4.2 million for community development, including road improvement and more.  
  • $1.4 million for a Community Centre in Bottle Creek 
  • $450,000 on the long-awaited refurbishment of the sports field in South Caicos. 
  • $1.4million for  consultancies  
  • $1 million on repatriation 
  • $1 million to Social Programs  
  • $1.8 million to InterHealth Canada 
  • A $500,000 injection to the country’s Climate Resilience Coastal Protection Study
  • $851,000 for software and consultancy to get the Turks and Caicos off the EU blacklist 
  • $2 million for the cleaning of government agencies  

Then during the second appropriations bill  total expenditure was pushed further to $443.4 million  increasing the planned deficit to $25.6 million, which would have been funded from cash reserves. That money was to be used for:

  • An $800,000 investment in a reverse osmosis plant in Grand Turk;
  • An $800,000 allocation for the renovation of the Bambarra Beach Vendors Market;
  • A $600,000 check for the Boundary Commission and claims against the government; 
  • An allocation of $800,000 for community enhancement and environmental sustainability;
  • $410,000 for Educational investment (furniture and equipment for schools);
  • $276,000 for Law enforcement resources (additional police vehicles);
  • $250,000 for National Security improvements (the hiring of a strategic lead) and;
  • $180,000 for Maritime security enhancement (the purchase of a 3rd sea patrol vessel

By the third supplementary in February, $1.07 million was shaved off the budget and money reallocated from some projects to fund others. Here’s what those reallocations should have looked like:

  • $9.5 million to acquire land and settle an ongoing claim against the government.
  •  $7 million as seed funding for a Mortgage Corporation.
  • $300,000 to rollout e-Government projects for the Ministry of Finance and the Ministry of Home Affairs.
  • $800,000 for Miscellaneous adjustments for other Supplies, Materials and Equipment – Governor’s Office, Civil Servant Week and allocation to support the ongoing pay and regrading exercise and productivity audit. 

That brought the country to its final and most recent (4th) supplementary tabled by Misick on the 21st of March. Despite an expected deficit of about $18.4 million from projected income of $417.8 million, the country could end the year in a surplus as the economy has outperformed income estimates and the government continues to underspend. 

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Crime

Avoid Credit Card Fraud, CIBC makes security changes

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Rashsed Esson

Staff Writer 

To foster greater security, CIBC First Caribbean is making changes to credit and debit card Point of Sale terminal transactions to reduce the risk of fraud associated with “key-entered” transactions.

In a statement issued on March 19, the organization informs that after April 30th, 2024, vendors will no longer be able accept payments by manually entering card numbers. If they attempt to do so the transaction will be declined. 

After March 30th, only Chip and Pin or contactless are approved. 

The bank expressed that this is being done as it is their priority given the ongoing issue of fraud.

The BAI Mission, a financial services entity, reports that in 2023, fraud trends increase compared to previous years, as technologies evolve, as pointed out by a financial services leader.

It reports that according to recent NICE Actimize Fraud Insights, the first half of 2023 saw a 22 percent increase in fraud globally, as the move to cashless payments increase. 

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Finance

E. Jay Saunders and Team spearhead landmark change in Public Financial Management; Budget ROLL-OVERS now approved 

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Dana Malcolm 

Staff Writer

 

#TurksandCaicos, April 7, 2024 – For the first time since 2012, significant changes have been made to the Public Financial Management (PFM) framework of the Turks and Caicos, giving the Government more say over how it spends the people’s money, erasing the need for any back and forth with the British.  It is a change E Jay Saunders, former deputy premier, credits to him and his team when he served as the Minister of Finance.

“I picked that up, marked it up and said it was too restrictive. We negotiated that at the Cabinet level and the PS negotiated it with the technocrats in the UK,” he told Magnetic Media in an exclusive interview on March 28.

The new PFM allows for three main things:

  •  It raises the debt limits that the country can borrow without needing approval from the UK
  • It mandates strict timelines to ensure a timely budget each year.
  • It makes provisions for more money to rollover from any surplus that is gained into the next budget giving TCIG more ‘spending money’

“It increased the borrowing guidelines, it allows us more money, allows us to finance debts, and the goal is to increase what we can use for financing on a yearly basis; we can borrow more, we can spend more money for finance during the year,” Saunders said.

The former finance minister also  told us that every time a budget was late it gave the government less time to complete their objectives. Specific clauses were included in the new PFM in order to put an end to that.

Before the budget can be approved a Fiscal and Strategic Policy Statement (FSPS) must be sent to the United Kingdom outlining the budget objectives for the respective financial year; only after that is assessed by the UK and returned to local politicians can they table and debate the budget for approval.

Under the new PFM that must be handed into the UK in January giving them several weeks to pour over it and return it in time for a March budget.

”What it does is give all the departments 12 months to execute. By changing the PFM, I put our government and all future governments in the position where they can deliver the budget before the financial year starts.”

Saunders says the observance of Holy Week was the only reason why the 2024/2025 budget was not debated prior to April 1.  Easter fell earlier this year.

Hon Saunders explained that whenever a surplus was recorded, the money didn’t go back into the budget.

“A significant portion of it had to go to the National Wealth Fund, and you would never see it again, unless under special circumstances.”

That fund powers a few select projects and once money is in it, the process to get it out is extremely complicated, Saunders explained.  With changes to the PFM more money from any surplus will remain in government hands, allowing them to reuse it for capital projects and more.

The document mandates that if the actual revenue exceeds the estimated revenue by: 5% but is less than 20%, then only 50% of the excess of the revenue for that financial year has to be withdrawn from the Consolidated Fund and deposited to the National Wealth Fund.

If the actual revenue is 20% or more, 70% of the excess of the revenue for that financial year will go to the Wealth Fund.

Saunders says he wanted those percentages to be higher, but is pleased nonetheless.

”While it still has a feel of us losing, we’re not going to be losing as much as we would in a normal financial year, because a higher portion gets rolled over to the new financial year.”

He explained why the 2012 version of the framework could have been so restrictive.

”It saw the TCI at a time when the constitution had gotten suspended, the government had gotten put out of office, the SIPT investigations were starting, and the country had just gotten a $200 million loan that was guaranteed by the UK government,” he explained.

With over ten years passed since then, in 2023 Saunders said he revisited the document of his own accord and began the process of updating it. When it was all over he says he got the seal of approval from the UK personally, providing for the media, a letter addressed to him by David Rutley, FCDO Head, which congratulated Saunders and TCIG on their prudent management of the country’s finances.

For Saunders it is an indication of what can be achieved with more work.

”This might have been the first time one of these frameworks was sent back to be re-negotiated. It clearly shows now they have an appetite to say there is enough distance between the constitution being suspended. Now we’ve seen enough evidence that TCI can run a good government, now we’re willing to ease up.”

He expressed disappointment that he was unable to tackle other similar frameworks left behind by the British after the interim administration, like the pesky Procurement Ordinance and says, had he been allowed, those would’ve been next on his list.

The finance portfolio was shifted back to the premier in a messy squabble over their party’s leadership.  Saunders now occupies the backbench.

Washington Misick, TCI Premier and Dileeni Daniel-Selvaratnam, TCI Governor signed the PFM into law since January.

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