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                                       17 Cipero Street, San Fernando
                                                Tel/Fax:  657 – 0123
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Dr. Enrique V. Iglesias
Inter-American Development Bank.

Dear Sir,

I have read of your intention to be in Trinidad during this week to sign the loan to initiate the “Second Settlements Program.”  Much of the negotiations for this loan took place during my brief tenure as Minister of Housing.  In fact, the loan agreement was due to go to the Board of your institution, the Inter-American Development Bank (IDB), for final approval when the General Elections of 2001 were called.  I was informed that the IDB would not proceed with the loan approval process until after the elections because of the state of uncertainty that would exist until the elections were over.

However, the conditions that caused the IDB to postpone approval still exist and may, in fact, be even worse.  The brief hiatus that preceded the elections have now lengthened into a six month period where there is no Parliament and where an election is inevitable. The state of uncertainty has been heightened and all the civic, religious and commercial leaders have called for elections now.  A major regional conglomerate, Neal and Massy, has blamed the state of political uncertainty that now grips the country for their company’s shortfall in profits. The Government in power does not control or represent the majority.  My party, the United National Congress, has the same number of seats in the Parliament as the Government which has been selected by the President rather than elected by the people.  In fact, the majority of the electorate voted for the UNC.

If your decision to postpone approval of the loan in late 2001 was based on the political state of the country preceding the elections, there is no justification for re-initiating the process and deciding on granting the loan as you have done.  I understand that the rationale being used is that both contending parties, the UNC and the party placed in power by the President, the People’s National Movement (PNM), desire the loan.  However, to approve and grant the loan at this time , is a political act designed to bolster the chances of the PNM in the elections.

Your coming to Trinidad and Tobago at this time to sign the loan agreement must be seen as interference by the IDB in the political process.  You are clearly supporting the PNM in its attempt to win the favour of the electorate for the elections.

There were already incidents prior to the elections that support my position that the IDB has been unfaithful to its Charter and has interfered in the politics of my country.  In one case, one of the people engaged in the project design, Mr. Wayne Maughan, now Advisor to the present Minister of Housing, drew to my attention that a personal and highly confidential letter that I had written to the Minister of Finance was in the possession of an IDB officer in the Trinidad office.  Mr. Maughan advised me that he was offered alternative consultancies with the IDB to leave the project. My attention was drawn to the fact that immediately prior to the election, Dr. Euric Bobb, a senior IDB official, previously Governor of the National Central Bank under the PNM, was in Trinidad.  It was alleged that he was working closely with the PNM on their fiscal and housing policy.  Another senior member of your organisation is the daughter of the founder of the PNM, Dr Eric Williams.

In an address to the staff of the Ministry on January 2, 2002, the present Minister alluded to his and the Prime Minister’s relationship to your country representative Mr. Robinson and gave the impression that Mr. Robinson was involved in drafting the PNM housing policy contained in that party’s manifesto.  In fact, Mr. Danny Montano, the new Minister, said that he thought the only reason that he was made Minister was because of his closeness, through sailing, with Mr. Robinson and the head of a mortgage institution in Trinidad and Tobago, the Home Mortgage Bank (HMB) Mr. Calder Hart.  Mr. Mauricio Silva of your staff will confirm that Mr. Hart was unwilling to commit his institution to the Second Settlements Program (Project HOME as we named it) without a national mortgage insurance plan.  Yet, immediately upon the PNM taking office, Mr. Montano announced that Mr. Hart, who he claimed was an architect of the PNM housing policy, would make $350 million available to the Government for Project HOME.

We strongly urge you not to come to Trinidad to sign this document until the extent to which your office has been directly involved in the politics of my country has been investigated.  We strongly urge you to avoid any further interference in the internal affairs of our country.  We strongly urge you not to grant the loan or to sign the agreement at this time on the spurious pretext that both parties agree.  We strongly urge you to stick to the same rationale that you gave when you terminated the loan agreement process with my government when elections were called in 2001.  We strongly urge you not to come to Trinidad to sign the loan agreement until the situation of uncertainty in the country has changed and a new elected, rather than selected, Government is in power.  We strongly urge you to be consistent in your dealings with Trinidad and Tobago as any other course of action would be interpreted as political and partisan.

Please note that if you persist in your actions we would see this as proof that as President of the IDB you and your staff have interfered in the political affairs of my country and would take our case to individual member states to have you investigated and impeached.

We would also take our case to the United States Government or work through friends in Congress and the House of Representatives to make sure the matter comes up for discussion.

I hope that you realise the gravity of the situation, its seriousness, and its consequence for the credibility of the IDB.  You, your officials and your entire organisation have deliberately chosen to ignore transparency and impartiality in this matter.  If you continue along this reckless path, we would have no choice but to go public in our allegations and to take our case to the American and other governments, as well as the international media, specifically the Washington-based media and wire services.

I am, as usual, always available to your organisation and am fully prepared to provide whatever evidence I have of impropriety on the part of your officials, or views on how your actions are being construed by my party and many of my countrymen.  Remember, that my party, the UNC, had the majority of the popular vote in the last elections.

We trust that you will reconsider your actions in light of this letter and immediately begin an investigation into the circumstances and timing of this loan.


Sadiq M. Baksh
Former Minister of Housing and Settlements
Republic of Trinidad and Tobago
Home: 1-868-652-9912
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