NO WAY, JOSE!

Apr 05, 2009 Features / Columnists, Peeping Tom

There is a young reporter from the Stabroek News who usually has the President dancing during question time at press conferences, and I would love to see another encounter between the two.
The young Stabroek News reporter is not at all intimidated by the President. He asks the tough questions, many of which annoy the President and force him to get worked up.
Ever since the liquidator in The Bahamas revealed this past week that the more than six billion dollars that CLICO (Guyana) sent there appeared more of a money transfer rather than a standard insurance contract, I was waiting to see how the President would have handled the heat when he hosted his usual press conference. I was waiting to see how he would deal with this young reporter. The anticipated showdown did not occur.

A strange thing happened though. Neither the Kaieteur News nor the Stabroek News was present at the last press conference/interview hosted by the President. And, of course, in the absence of these two newspapers, the President had it easy.
The reports in other sections of the media indicated that the President dealt with the latest developments in the CLICO (Guyana) matter. He replied to the leader of the Alliance For Change and he explained that if the need arises, the treasury would have to foot the bill for the guarantee he made to the policyholders and investors in CLICO (Guyana).

The President should restrain himself when it comes to pronouncing on CLICO (Guyana). While the Commissioner of Insurance under the Insurance Act is guided by the directives of the Minister of Finance, as Judicial Manager she is not under any obligation to the government. She is accountable only to the Courts. As Judicial Manager she does not report to the government.
The President of Guyana should therefore not be indicating his preference for liquidation or saying why the Chief Executive Officer of CLICO (Guyana) Ms. Geeta Singh–Knight was retained. He should not be conveying the impression that it is the government that is calling the shots.

The Judicial Manager is required to prepare a report as to what she feels should happen to CLICO (Guyana). I expect the company to be wound up. It would seem as if the government also feels this is the inevitable fate of the company. But it is for the Judicial Manager in her deliberate judgment to put forward the best option to the Courts, and it is for the Courts, not President Jagdeo, after hearing those whom it feels ought to be heard, to decide which option should be pursued.
The President, of course, has indicated that the government will guarantee the investments of all policyholders. And I am sure the Judicial Manager is aware of this and would have taken steps to ascertain by what this guarantee is backed.
We are now being told that the funds for the guarantee will come from the Treasury. Well, it is not going to be that easy.

The government cannot simply bail out CLICO (Guyana). The government did not bail out Globe Trust and since they have said the problems of CLICO (Guyana) pose no systemic risk to the financial sector, they should not be bailing out the company either.
The taxpayers of this country should have none of it. They should not condone the use of their money to compensate for the downright reckless investment that was made of the NIS funds. They should ask why it is the government allowed such a significant exposure to the NIS. Not only were billions of the NIS funds sunk into CLICO (Guyana) which is for all intents and purposes going to be liquidated, but also a few billions more has been sunk into the Berbice River Bridge, which is not likely to show a profit for some years.
The NIS money, as Guyanese would say, “gone down the drain” and the President is now suggesting that we take billions of taxpayers’ monies to bail out CLICO (Guyana). No way Jose! No way, I say!

The fact that the bailout will be phased over ten years is of no comfort because there is a present value to the proceeds which will have to be paid in the future and that sum is likely now to approximate to about ten billion dollars at present day values by the time all the claims of CLICO (Guyana) are paid.
Before a dime is spent, there should be a forensic audit of what took place in CLICO (Guyana). Charges should be laid against CLICO (Guyana) for breach of the insurance laws of Guyana and an investigation should be undertaken as to where the money that was sent to the Bahamas ended up and who benefited from those funds.