19 cent stamp

As foreign holiday home destinations go, Thailand ticks all the boxes: tropical sunshine, tranquillity, low property prices and bullish estate agents. But on September 19 last year, a coup and declaration of martial law sent the country and its economy into flux. Holiday homes dropped in price due to the volatility of the baht, Thailand's currency, and confidence levels followed suit.


Koh Samui, Dhevatara Cove: A gated community of six homes with five to six bedrooms, infinity pool and outdoor jacuzzi. From ￡975,000, Dhevatara Properties, www.dhevatara.com

Yet the property industry is not easily deflated and a year later a post-coup charm offensive is being launched to resuscitate British interest in Thailand. One estate agent selling in the region has thrown champagne receptions in cities across the UK, offering invitations to Thailand to look at new schemes in Phuket and Koh Samui.

So what is the current state of the market?

"Demand for property definitely cooled off as a result of the coup, almost up to 50 per cent," admits Robert Green of Cluttons Resorts, which has started selling properties on the Banyan Tree Resort in Phuket. "But sales are moving relatively slowly again and although prices have remained static in the past year, they are picking up.

"Ninety per cent of our enquiries are for two- to three-bedroom villas in managed top-end resorts, which offer rental returns," says Robert. "Buyers are still looking for properties as an investment as well as for their own use." Robert Collins, head of Savills's Thailand office, describes sales as "subdued" and warns that "the strengthening of the baht is having a negative impact on the economy". Foreign buyers, he says, are taking a "wait and see attitude".

advertisementHis colleague, Charles Weston Baker, Savills's head of international sales, however is confident that buyers will return. "Thailand is an incredibly beautiful area, few places in the world compare to it, and the coup has not unduly affected interest," he says. "It is a two-tier market, both regional - from Singapore and Hong Kong - and European, so there is good demand. People still see Thailand as a top holiday area and rightly so."

Others have commented that the military government's promise of a general election before the end of the year could bring an end to the political uncertainty. "As coups go, this has not been the worst," says Robert Collins. "The market will hopefully stabilise and if a democratic government comes to power, controls on foreign ownership will be relaxed," he predicts. "The biggest problem is the complicated ownership laws."

Foreigners can buy a freehold or leasehold property in Thailand, but are not allowed to buy a freehold plot of land. If you plan to buy a house or villa, then you must set up a Thai limited liability company jointly with Thai nationals who have to prove they can take over your payments should you default. Start-up costs are ￡1,000, with ongoing fees of about ￡50 a month.

Claire Brown, whose company Claire Brown Realty specialises in Thai middle- to top-end property, believes there is a better way than this "back-door" method of buying.

"You don't need a separate company to buy a house if you buy leasehold," she says. You can usually only buy for a total of 90 years, via three "rolling" 30-year leases. "It's a more legally robust system which doesn't try to circumvent the law," she says. "It is straightforward to sell on, as the developer will renew the 30-year lease and it is cheaper with stamp duty at 1 per cent as opposed to 6・6 per cent for freehold."

But other agents warn of the potential pitfalls associated with leasehold purchases. "The 90-year lease idea simply loses value year by year," warns Julian Cunningham of Knight Frank. "A buyer must be very careful who he buys from, and what and where he buys."

Stephen Owen, of Dhevatara Properties, who sells top-end villas in a gated beachfront community on Phuket, warns against buying a leasehold property. "A foreigner can legitimately set up a company to buy a property. If freehold, there is no problem selling on; if leasehold, the developer can always turn around and not renew the lease. This happened at a top residential resort here which was given notice after only 14 years. There was a legal battle to extend to 30 and nothing longer has been promised."

All of which begs the question, for a country which is so keen on foreign investment, shouldn't the laws be made easier? "The government is under increasing pressure to open up the market and make it less complicated," says Robert Green, "but it will be a good few years before the regulations ease up."

Certainly the political and economic turmoil of the past year and complicated buying procedure hasn't deterred longer-term owners such as Londoner Neil Redcliffe. Shortly before the coup, he bought a villa on Coconut Island at Maphrao, an island just east of Phuket, after visiting Thailand frequently over the past 25 years.

"It's a beautiful country where the quality of everything - furniture, building, service - is five star, just as those qualities are going down in areas like the Caribbean," says Neil, head of a foreign exchange firm.

"Through my job I'm aware of what's been happening. The effects of the coup won't last long. The former government was on a track unpopular with Thai people, so I see the military involvement as a sign of strength," he says. "Thailand is superbly positioned. The culture and the food are fantastic, and I love it."

The target for Thailand, now, is to persuade the rest of us to love it too.

In a recent article which I wrote titled 'Questionable arrangements in the attorney-general's office', it was shown that attorneys employed to that government entity for the specific purpose of providing legal services to other government departments had been billing and collecting fees from those very same departments.

In other words, they were on staff as one of the largest body of lawyers anywhere in Jamaica being paid a salary, yet when they, or some of them, were mandated to provide services to seemingly cash-rich executive agencies such as the Bauxite and Alumina Trading Company (BATCo) and the Urban Development Corporation (UDC), the AG's office allowed them to charge rates as high as $18,000 per hour.

In the controversy which swirled (exposure on Nationwide, letter in the Gleaner) the impression is being given that somehow there is a loose, if not structured and documented, arrangement which allows the AG's office to do this and, in any event, no fees are ever billed to government departments which could be classified as 'central government'. Is that really true?

No other government body can be as 'central government' as the Tax Administration Services Department (TASD), and yet the records of the not so recent past will show that that government entity has been repeatedly billed for work by the AG's office in what appears to me to breach the Staff Orders as laid down by the Ministry of Finance and Planning.

In February 2001, the TASD wrote a letter to the AG's Department seeking guidance on a certain matter. The letter is signed by Mrs Heather-Dawn Brown, then director, legislation and treaty. "As discussed today, I wish to ascertain if any costs will be charged to the Tax Administration Services Department (TASD) in respect of matters in which they have sought the assistance of the attorney-general.

"Since you have stated that the attorney-general is currently developing a policy in regard to charges to departments requesting their assistance, I ask that you inform me of the attorney-general's decision and policy as soon as it is made."

Now, I would imagine that it would not fall under the responsibility of the AG's department to bring about even minor policy change on a matter leading obviously to the finance ministry. One would have thought that if such a policy change was made, it would be clearly documented by the finance ministry and sent to the TASD. And, in any event, 'currently developing a policy' would mean that the policy is not yet developed. If it is not yet developed, there can be no charge.

On February 22, 2001, an interesting letter from the AG's department signed by Michael Hylton, solicitor-general is written to the TASD. " ... a policy is being developed in relation to the basis on which matters like these will be handled by the Department. That policy is being developed at Cabinet level and will not only apply to this Department, but to all cases where public officers are required to provide services to non-central government agencies or departments. Pending the finalisation of that policy, the department will proceed on the same basis that it has in the past and a charge will be made for its services. We will be pleased to meet with you to discuss the matter."

It is important to make note of items in that letter. The first matter which jumps out at me is the obvious one as stated before; no policy has yet been developed. Second is, the policy will affect the offering of services to non-central government agencies, that is, places like the TASD. Third is, either by a previous, unstated, unknown policy or, by fiat courtesy of the AG's department, "...the department will proceed on the same basis that it has in the past and a charge will be made for its services".

The TASD follows up on February 26 in its letter to the AG's department. The letter is signed by the director, legislation and treaty "In regard to your policy to charge non-central government agencies/departments, please note that as I had indicated in our discussion on the 23rd February, 2001, the TASD is a revenue department of the government under the Revenue Administration Act. I have also been informed that it is a department of Central Government under the Ministry of Finance.

"When determined, kindly inform the department of Cabinet's policy in regard to the basis on which the attorney-general will provide service to government agencies and departments."
A month later, a meeting is held between senior representatives of the TASD and the AG's department. As a follow-up, a March 9, 2001 letter from the TASD is written to the AG's department setting out an understanding of the matter.

It is summed up in one main paragraph of the letter. "As agreed, in light of the fact that the TASD is a department of the central government under the Ministry of Finance, the attorney-general's office will represent the TASD in legal matters without any charge to the TASD."

At this stage, reader, I will forgive you if you are confused. First, the TASD seeks clarification from the AG's office because it was informed by the AG's office that a fee policy is being developed. Second, the AG's office confirms that policy is being developed at Cabinet level but until that time it will continue to charge (on which ruling?). Third, a meeting is held and it is agreed that no charges will be made.

By April the matter is further complicated by the AG's office 'insisting' that it will be charging the TASD for its services and it sets out the basis on which fees will be applied. An April 19, 2001 letter from the AG's department to the TASD encapsulates the general direction of the AG's office. The letter is signed by Michael Hylton, solicitor-general.

"Previous correspondence ended in your letter of February 26, and I refer to our meeting on March 9. At that meeting, it was agreed that members of the Department would handle the four (4) matters which we discussed, but would do so on the basis of an 'honorarium' and not on a 'fee basis' as had been proposed in my earlier letter. We promised to do a calculation on the same basis that similar matters have been handled in the past, and we will let you have that shortly. In the meantime, we will of course, continue to work on the matters."

A reasonable question to ask would be, which person was driving policy then? Was it someone in the AG's office or the Ministry of Finance? Until an answer can be found for that, I would like to introduce 'into evidence' a letter from the Ministry of Finance by which Michael Hylton of the AG's department was guided in arriving at his 'honorarium'.

It is copy of a letter dated April 6, 1998. It is signed by Mrs P Richardson on behalf of the financial secretary and it is addressed to the permanent secretary, Ministry of Works and Transport. "I am directed to inform you that for work done outside of normal working hours, this ministry supports the payment of honorarium to the officers concerned, calculated at 90% of time-and-one-half of the maximum of their respective salary scales."
The copy of that letter was included in correspondence apparently to justify not only the rates but the basis of qualification for charging fees. The obvious? 'Work done outside of normal working hours.'

In other words, not one single person in the Attorney-General's Department had been empowered by Ministry of Finance legislation to collect one cent for work done unless it was done outside of company time.
The most shallow attorney at the AG's department could not see any ambiguity in the '...for work done outside of normal working hours...'

And yet, dear reader, the AG's department on February 18, 2002, continued to charge fees to the TASD, a central government body, not just for work done in normal working hours but also for, get this, representing the government in court.
Fees based on 90% of one-and-a-half times maximum salary included $1,850 per hour for the solicitor-general, $1,570 for his deputy all the way down to $750 per hour for assistant crown counsel.

In one time sheet re: Carreras Group v the Stamp Commissioner, April 10, 2002, charges are made in preparing for an appeal. Michael Hylton logs 41 hours. One item states 'Attending court on hearing of summons for stay; securing, perfecting and serving order ...' - 2.1 hours.

His colleague in that matter, one Garfield Haisley, logs a solid 85 1/2 hours. One interesting item is 'photocopying authorities' - 1 1/2 hours.

On May 8, 2002 Mrs K Damdar, the acting commissioner of the TASD, sent a memo to Mr Clive Nicholas, director-general, setting out her observations and strong concerns over the AG's department charging fees. Somehow I wish you the reader could get an opportunity to read the entire three-page memo. The salient points are given:

"On receiving a telephone call and letter dated February 18, 2002 (tagged A) from the solicitor-general stating a fee structure, I was unsure why Central Government is charging another Government Department within Central Government a fee.

"I am unsure as to how the question of an honorarium will arise, since appearing in Court on behalf of the State (TASD) is a normal part of the duties of members of staff from the Attorney-General's Chambers who are civil servants. These are not private matters, and TASD does not have an option to choose any other attorney outside the legal representative provided by the State to bring a matter to Court.

"By letter dated May 17, 2001 the former commissioner agreed to pay fees to:
Deputy solicitor-general $1,571 per hour
Divisional director $1,308 per hour

Crown counsel $908 per hour referring to a letter from Ministry of Finance dated April 16, 1998 specifically addressed to permanent secretary, Ministry of Works & Transport (not commissioner, TASD) as her authority. Even if this circular is granting the authority, it was providing for work done outside of normal working hours.

"(a) Appearing in Court on behalf of TASD is not done outside of normal working hours
(b) If this is challenged, the commissioner was acting outside the scope of her authority.

"The Attorney-General's Department continues to submit claims for individual members of staff showing hours spent on various cases they have worked on for TASD. These include hours spent at Court. I fail to see any Government Department, which is part of their normal day-to-day activity, will be reserved to be worked on outside of normal hours so that fees can be charged; and based on what is submitted it would seem as though the total hours spent on the cases were claimed.

"I noticed that on 20/12/2001 Mr Hylton claimed hours for attending Court and hearing of summons and reviewing record of appeal. Are these not a part of his normal duties done between 8:30 am and 5:00 pm while Court is in session?"
Mrs Damdar needs to be congratulated for what appears to be her professionalism in this matter.

What can we expect from the new Attorney-General?

Even as the previous PNP administration was building the impressive highway network, erecting a stadium in Trelawny and a bus park in Half-Way-Tree, it was not a government which appreciated cutting waste, especially in its last term.

Indeed, one would have expected it to tighten up on its efficiency, having had the benefit of experience in the periods 1989 to 1993, 1993 to 1997 and 1997 to 2002.
Indications are, and the evidence will eventually support it, that the 2002 to 2007 PNP administration will turn out to be the most wasteful in the country's history. The genetically connected did not do too badly in the PNP's run.

The new administration began preaching about waste and corruption long before it was elected. That both matters were considered unimportant by the electorate means two things. First, the typical Jamaican knows little about corruption in government.

Persons like myself can only write about 10% of what we know. The rest is tied up in fancy footwork in hiding or 'shredding' documents and, of course, if an official is found to be a scamp, I may know it and he definitely knows it, but if I have no hard evidence, that is, some document in hand, it suits me to keep my mouth shut.

I can appreciate that the Attorney-General's Department will always want to attract the best and the brightest coming out of the law school. The salaries offered are 'livable' if one is young, but by no means are they astronomical.

If these lawyers accept the jobs on the basis of the salaries offered, should there be any other problems? If the AG's Department considers that it is important to develop policy to provide honorarium to the more capable members of staff, then by all means make the submissions and, hopefully, based on the merits of the proposals, they could be adopted.

Until such time, however, it is not just wrong for attorneys to be collecting fees above their salaries, it is illegal and corrupt. The regulations are clear, as I have read them, and certainly one would have expected that an entity such as the AG's Department would appreciate the finer points of laws and regulations much more than I would.

Policy regarding medical specialists working in government hospitals is very clear. A doctor cannot be seeing a patient in a ward at KPH or the University Hospital and submit a bill to the hospital for private charges while using the hospitals' facilities and being paid for working there.

These doctors have specific hours, even special days when they act on their own account at their own offices.
If the Golding administration is really concerned about waste, as I know it ought to be, Senator Dorothy Lightbourne will have to begin playing her part by making clear a policy regarding fees charged by the Attorney-General's Department.

No luck for County Council model in local government

There are two junior ministers from whom I will be expecting nothing more than above-par performances. These are Bobby Montague and Daryl Vaz. I am quite close to these politicians, and in other circles outside of raw politics I consider them friends.

Indeed, I became friends with them because initially I was attracted to their activism. Social and political activism is in my system, but I yield to those who are prepared to actually walk the walk.

I have followed Vaz in the time before he formed Citizens For Civil Society (CCS) and as it was then with him outside of the JLP, I witnessed Andre Franklyn of the JLP leading an unruly group of JLP demonstrators in an effort to disrupt a CCS gathering in Half-Way-Tree. Never say never in politics. Today, Franklyn and Vaz are on the same team.

Indeed, as I left that meeting (sometime in 1999 I believe) I was accosted by a group of JLP men and women who blocked my car and hurled 'words' at me, such as, "Is why you hate Mr Seaga so? Is whey im do you?" Before I entered the car, one very rotund and robust woman with more than her fair share of mid-section stepped up to me and gave me a 'buck' with her belly. Just belly to belly with a slapping sound. It was only funny to me when I recounted it later.

Vaz is the ideal man to deal with ensuring that government projects are completed on time, and especially with support, within proposed costs. I have watched him on many occasions organise large and especially small and crucial meetings with powerhouses or with the small man. In a word, and possibly unknown to many outside of politics, he is a manager par excellence.

In the many meetings, formal and very informal, that I have had with Bobby Montague, the item which has impressed me the most is his ability to articulate the most complex matters to persons who would not normally comprehend, were it not for Montague's down-home communication skills. Add to that his extensive knowledge of community empowerment and just an acute handle on the direction where our politics needs to arrive as an ideal destination.

Montague has travelled extensively over the years studying various models of local government structures. In the Golding administration, he is charged with implementing the new model of local government. When I spoke with Montague last Tuesday he was quite aware of my choice of the County Council model of local government.

Very basically, it is a proposal put forward many years ago by a Jamaican urban planner/academic teaching at a California University. It encompasses utilising councils in the counties of Cornwall, Middlesex and Surrey and managing local government using the bottom-up principle, that is moving sharply away from the burdensome centralised Local Government giant in Kingston.

Persons operating at the 'local levels', that is those in the communities, will, through lines to the councils, have a direct say matters concerning them. It is much more complex than that, but those are the basics.

"I am not quite sure which model we are going to adopt, but it is going to be based on the bottom-up principle," said Montague when we spoke. "I have not even been sworn in yet as an MP so I have no real power. My job is to implement. I have said to those concerned, just give me the model which falls with the basic guidelines of what we have proposed. After that, it's all about working to achieve the goal of local government that actually works."

I am looking forward to the inputs but especially the output from Vaz and Montague.

Speedy response from NCB

In last Sunday's Wignall's World I commented on an ATM machine at the Corner of Border Avenue and Mannings Hill Road which had gone on the blink since the passage of Hurricane Dean. My particular complaint was that no signs were on the outside of the machine, and bank customers from the many residential areas close to it had to exit their vehicles, enter the ATM before the CRT told them that the machine was down.
By Monday morning NCB had placed a sign stating that the machine was out of order and improvement work was in process.

An e-mail which followed stated the following:
"Hi Mark,
It was great speaking with you today and I now provide an update in relation to what is now referred to as 'your sign' at the Shell Border Avenue ABM.

"By way of your article of Sunday, September 16, 2007, we wish to thank you for bringing to our attention the customer irritant that the Shell Border Avenue ABM has presented. As you are aware, NCB's mission is to consistently upgrade our services and facilities to enhance our customers' experience and we appreciate being advised of any instance where same has been overlooked.

"The maintenance of some of our ABMs is outsourced. The contracted company was supplied with 'Out of Service' signs but unfortunately they failed to advise us of a need for additional signs, resulting in the lack of company-to-customer communication to which you referred in your article.

This unfortunate incident has, however, demonstrated that we must be more vigilant of this and other contracted services as any shortcomings reflect poorly on the bank.
"As you are aware, the sign has since been put in place and work is still in train to expeditiously resolve the issues at the Border Avenue location.

"I invite you to contact me regarding any NCB-related concerns or queries you may have in the future. Our customers do serve as additional eyes and ears on the 'road' and as a result we welcome all observations and feedback as these are dealt with for the benefit of all customers as well as the organisation, as the aim is to do everything in our power to ensure that our customers' experience is a pleasant one."

By Thursday afternoon last, the very time I ought to have sent in my column to the Observer, NCB had the machine restored to full working order.
Very good show, and thank you, NCB.
Volatility in the stock market prompted Canadian investors to bail out of their mutual funds last month, leaving the industry swamped in redemptions for the first time this year.

Net redemptions of mutual funds are estimated at between $1.3 billion and $1.8 billion for the month of August, according to figures released yesterday by the Investment Funds Institute of Canada, or IFIC.

The value of net assets under management by the fund industry also took a hit, falling an estimated 1.05 per cent from July's $703.4 billion total.

The S&P/TSX composite index, took a wild ride in August, sliding nearly 1,800 points from its July 19 peak of 14,625.76 points, as investors worried that turmoil in the U.S. housing market would spread to the wider economy and put a dent in the growth rate.

Asset-backed commercial paper, a little-understood short-term debt security used by companies to park their cash and finance their operations, became the focus of concern.

Investors were surprised to learn that investment banks packaged risky mortgages to use as collateral in the commercial paper. Credit-rating agencies had given the securities a stamp of approval, but there were mounting concerns that a wide variety of banks, mutual funds and pension funds may be sitting on bad debt.

"The issues surrounding asset-backed commercial paper rippled through different sectors of the economy," IFIC spokesperson Pat Dunwoody said in a release yesterday.

"As such, it was not unexpected that some investors would leave money market funds."

IFIC estimates that investors pulled about $1.4 billion out of money market funds last month, and another $200 million out of long-term mutual funds.

TD Asset Management, the mutual fund arm of the Toronto Dominion Bank, saw $543 million in net redemptions last month, while National Bank Group suffered $446 million in negative sales.

The Canadian Imperial Bank of Commerce's CIBC Asset Management had net redemptions of $354 million.

One exception was Scotia Securities Inc., which had net fund sales of $113 million.

On the performance side, only 17 out of 42 mutual fund indices had positive returns in August, according to Morningstar Canada.

Of those with positive performance, all had returns below 2 per cent.

The real estate fund index led the pack with a 1.9 per cent return.

The Canadian equity fund index lost 0.15 per cent, while the Canadian money market index returned 0.1 per cent.