July 07, 2002
By Raffique Shah
TO state that I firmly believe that Trinidad Cement Limited should remain in the hands of nationals of this country is to harp on the obvious. Every national who knows the history of the first cement plant in the Eastern Caribbean, from the days when it was owned by Britain's Portland Cement, through its transition to a fully-owned state enterprise, then its divestment to mostly local shareholders, shares a sense of pride in TCL. For not only has it been a financially successful company, but it has maintained quality control that puts this critical construction component on par with cement produced anywhere in the world.
So when minority shareholder Cemex, a giant in the global scheme of cement, tries to buy out a slice of our patrimony, more so a valuable and profitable one, the patriotic among us must feel offended. Really, it's not as if some big-time baker from the USA or Canada were coming here to take over the friendly neighbourhood bakery. Cement is vital to all construction, and since construction is crucial both as an engine of growth of the economy and an indicator as to how well the economy is faring, these are sufficient reasons for the nationalistic among us to wage war to ensure it stays in local hands.
Indeed, the private and institutional investors who are eager to part with their shares "for a few dollars more" signal to us that should some wealthy foreign interest offer to purchase Trinidad and Tobago by giving each citizen $1 million or more, we'd readily tear down the red, white and black flag to make way for whatever rag is the tycoon's symbol. There are some things that remain sacrosanct, even in the era of globalisation, which, really, is a euphemism for dominance of the global economy by a handful of rich nations.
But patriotism cannot be a part-time affair. One must not be seen to rush and raise and wave the national flag in times of crisis, then retreat into the cloistered world of the executive suite when the going is good, oblivious to the hurt you wreak on ordinary citizens when you don your corporate cap. And this, I fear, is why many people are ambivalent in their stance towards the Cemex bid to buy out TCL.
Few people, especially those who were involved in some kind of construction over the past three years, will forget how TCL, when faced with low-priced cement imported by a few entrepreneurs from Thailand, cried foul, and proceeded to cut its price in order to compete with, even undercut, the imported cement. Pressure was applied to government to act to protect local cement, and there were loud cries of "dumping", the very term the USA used when it imposed increased tariffs on steel being imported into that country. Then, even in the face of the WTO rules on free trade, the government gave way and applied a 60 per cent tariff on imported cement, effectively blocking any foreign cement from entering the local market.
And how did TCL repay the kindness extended to it by government and by citizens who stood by its side during that crisis? By immediately increasing its prices! In fact, the bosses in the boardroom did not wait for the ink to dry on government's tax imposition before they jacked up their price to what it was before the Thai stuff hit the local market. And since then, they have increased the price for yet another time, crying out that they had not done so for several years.
If you were to ask board members or senior managers at TCL how they were able to lower prices when their backs were against the Thai wall, one thing they would never say by way of explanation is that they suffered huge losses in the process. Sure, their profit margin will have dropped. But their balance sheet will have remained shiny black, their salaries and perks in no way affected. Their most recent price increase was no doubt a mechanism to extract from nationals of this country some extra profits to help TCL carry the burden of its costly acquisition of Carib Cement in Jamaica. In other words, for the board and management, the bottom line, and not any concern about "strategic industry" or "patrimony", is what matters.
Which is why they find themselves caught in a vice today, why so many otherwise patriotic citizens are not lifting a finger to help them in their battle with Cemex. Indeed, many of those who support the sellout are doing so in the hope that Cemex would lower the price of cement. Because if cement is strategic to the construction sector, which in turn is critical to the state of the national economy, then the "part time patriots" at TCL must see to it that the price to nationals remains at a reasonable level. They must not "dig out consumers' eyes" just so that their bottom line looks healthy, that they live very comfortably-at the expense of those who are trapped by TCL's monopolistic control of cement.
As we watch the Cemex-TCL saga unfold, there is a potent message in it for other monopolies that abuse the trust reposed in them by government and citizens of the country. TSTT, WASA, T&TEC all offer their captive customers shoddy service. Ever tried calling their "hot lines"? Man, you'd call until your telephone-hand tires with no response from them. And even when they respond to your call, to have them take action on your complaint is another months-long story.
Our financial institutions also abuse their absolute control of the nation's dollars and cents. From banks to insurance companies, they inflict whatever rates of interest or conditionalities (a la IMF) suit their fancy, or rather, enhance their bottom lines, regardless of the pain it causes their captive customers. I use the term captive since I imagine less than 25 per cent of salaried workers receive their emoluments in cash. The practice of sending workers' wages directly to banks is almost universal. And rather than treat the masses, who sustain their deposit and investments portfolios, with courtesy and kindness, these latter-day Shylocks extract flesh, blood and life in their quest to keep their bottom lines healthy.
So today it's Cemex moving in on TCL. From the look of things, it seems that globalisation will soon facilitate the gobbling up of other strategic industries and enterprises. Successive governments-the NAR, the PNM and the UNC-have paved the way for this frontal assault on our patrimony. They sowed the wind. We reap the whirlwind.
Copyright © Raffique Shah