by ERIC SMITH

MONDAY, May 14, has quietly become a significant date for the people of both Barbados and Trinidad and Tobago. It marked a new chapter in the CSME – CARICOM Single Market and Economy.

One announcement made simultaneously in Bridgetown and Port-of-Spain brought to life the real meaning of the CSME – the movement of capital.

This island's largest conglomerate, Barbados Shipping & Trading (BS&T) and Trinidad giant Neal & Massy have indicated they will merge to form the largest company in the English-speaking Caribbean.

By weekend the realities of globalisation and, more specifically, the need for regional businesses to have critical mass in order to grow and stay relevant in a changing world were made absolutely clear. Things were happening and happening fast. The Trinidad snack food specialist, Bermudez, was seeking control of WIBISCO, a Barbadian household name in a similar line of business.

Takeover fears

Immediately the public sought to offer an opinion with some of the view that the deal involving BS&T and Neal & Massy was not a merger, as officially stated, but a takeover.

Others expressed strong national sentiment, denouncing what they saw as a Trinidad and Tobago takeover of this island's most significant businesses. What was clear was the need for more information on the developments in order to understand the benefits for both the shareholders and the country.

The fears of some Barbadians were echoed throughout the week on the various call-in programmes on Starcom Network radio. The general fear was that Trinidadians "will be calling the shots".

The Trinidad Guardian noted that chief executive officer of Neal & Massy, Bernard Dulal-Whiteway, while speaking about the proposed merger in the twin-island republic last Monday, made it clear that "the proposed merger will lead to a company that should have a preponderance of Trinidad and Tobago directors and shareholders, and its headquarters in Port-of-Spain".

It was the location of the headquarters which has not met the approval of some people in Barbados.

BS&T and Neal & Massy will only be following Republic Bank, RBTT, Ansa McAl, CLICO, and One Caribbean Media among others, all of which have their corporate headquarters in Port-of-Spain.

This situation will hardly change as Trinidad and Tobago is awash with petro dollars and investors looking for a secure location will look to a stable Barbados economy.

Indeed, two years ago Professor Frank Alleyne, an economist and former dean of the Faculty of Social Sciences at the Cave Hill campus of the UWI, warned us to expect more mergers in the face of CSME and more importantly expect Barbados to play a key role in this kind of activity.

"I am convinced that several of our listed companies are grossly undervalued and once that is the case at any time somebody is going to make the move," he said.

His point was echoed by Robert Sifon Arevado, a Standard & Poor's analyst.

"Barbados and Trinidad have a love-hate relationship. They need each other. It always helps to have a neighbour that is growing. You are always going to get some spillover. Then there is the stability of the Barbados financial sector, which is a place for the private sector of Trinidad and Tobago to look for diversification."

It was this issue of diversification that Anthony King, chief executive officer of BS&T, indicated in early 2005 as being critical to the company. King noted that further growth for BS&T was going to be difficult given the small size of the local market.

"I'm not saying there are not more things that we can do here but we may have to do it by acquisition," King said then, adding that "the kind of investments we make have got to be able to provide us with sustainable income and growth opportunity."

This issue of spreading investments has generally been a challenge for many successful Barbados companies, notable exceptions being Goddard Enterprises Ltd, Sagicor, BS&T, Automotive Art, C. O. Williams and the Nation Corporation.

Indeed, King has been strong about cross-border activity for many years. In 1998 while president of the Barbados Chamber of Commerce and Industry and chairman of the Neal & Massy Eastern Caribbean Group of Companies, he said cross-border activity was good for the region.

"It aids in economic activity, increasing opportunities and bringing the region together, because you'll have people in different territories hopefully all paddling in the same canoe and direction," he added.

His views, while realistic, might be viewed sceptically by some Barbadians, given the vocal minority on the call-in programmes. It is noteworthy that these developments occur as Barbados prepares for its Crop-Over season.

Eight years ago, calypsonian Mac Fingall sang a song, Barbados Belong To Trinidad, which struck a high note with some Barbadians even though it did not get applause from folks in Port-of-Spain, including former Trade and Industry Minister Mervyn Assam.

"I would not like to hear in the future that one country owns another. I would prefer to hear that both countries (Trinidad and Tobago, and Barbados) and indeed all CARICOM countries, can freely invest in each other's economies," he said.

As the reality hits home, Barbadians need to learn the new names in the business hierarchy: Robert Bermudez, Trevor Boopsingh, Bernard Dulal-Whiteway and Arthur Lok Jack among others.