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HELPING DEM BOYS
Everyone in Kaieteur News feels sorry for Uncles Adam and Freddie. In the case of Adam his life savings are tied up in CLICO (Guyana), and with Freddie, UG’s pension fund is similarly constrained.
Uncle Freddie did not have a choice. There was no way in which he could have got his pension out, even if he had inside information about the move towards the courts for judicial administration.
Uncle Adam on the other hand had decided to take his money out when he read about the problems of CL Financial in Trinidad. He actually went into the company and was assured that there was no need for him to act hastily, but his boss, Glenn Lall, told him to take no chances and to withdraw the money. But the six per cent that was being offered on his CD was too attractive for Uncle Adam and he decided to leave his money in CLICO (Guyana). His hopes of recovering his life savings now hang on the commitment given by President Jagdeo that policyholders will not lose their money.
Uncle Freddie, while not the religious type, is praying also for the Government’s commitment to come through so as to save his pension. Uncle Freddie is due to retire at the same time President Jagdeo is due to demit the Presidency of Guyana.
It just proves the strange twists of fate, that the destiny of two men, whose present politics are worlds apart and who seemingly do not approve of each other, should become so intertwined. Freddie now needs Bharrat to help save his pension.
A lot of other persons are banking on the President’s commitment to guarantee their monies. But can it be done?
If CLICO (Guyana) is to be saved, it will require two things: a boost of confidence, and an injection of new investments to tidy it over until (if ever) it recovers sums invested overseas. It would also seem to me that for that company to be salvaged there will have to be some moratorium on withdrawals because, I believe, that no sooner than CLICO reopens for business, there is likely to be a run on the institution with some persons trying to get their monies out of there.
Such a course of action would of course further imperil that institution because, even for sound companies, there is always a devastating impact when there is a financial run on these institutions.
It would seem, therefore, given the financial trials that are likely to face CLICO (Guyana) in the not too distant future, that there will have to be a moratorium on withdrawals so as to prevent a deepening of the crisis. And for this reason I am concerned by an aspect of the statements attributed to the President of Guyana just before he left for his most recent overseas climate-change conference.
The President was reported to have asked those whose cheques are in limbo to give the Government a few days to address the matter. Now some of those cheques would relate to withdrawals, while others may be related to the payment of benefits.
In the case of the former, CLICO (Guyana) would probably have difficulties in honouring those payments immediately, and therefore may have to defer payment.
I do not know the basis of the President’s confidence that no one will lose their monies. But as was mentioned yesterday there is already serious injury done to the CLICO brand in Guyana, and it will take some doing for public confidence to be restored.
However, since the President is confident that no one will lose their monies, this is reassuring. And the President could perhaps go a step further and do what two of his colleagues have done in the case of the Bank of Antigua. Prime Ministers Baldwin Spencer of Antigua and Ralph Gonsalves of St Vincent and the Grenadines have each deposited EC$20,000 as a show of confidence in the Bank of Antigua.
Now that is the sort of act that would boost public confidence in a bank. And therefore, since our President is convinced that no one will lose monies invested in CLICO (Guyana), I would urge him to take all his money and to invest it in CLICO (Guyana) the moment the Court clears the way for CLICO (Guyana) to resume business.
I would also urge all the other members of the Cabinet to demonstrate similar confidence by withdrawing all their savings wherever these may be and invest them in CLICO (Guyana).
I am sure that with such a demonstration of confidence by the Cabinet both Uncle Freddie and Uncle Adam would rest more comfortably, knowing that the money they set aside to tidy them through their retirement is safe and secure.
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