TIME FOR CLARIFICATIONS

Jul 16, 2010 Features / Columnists, Peeping Tom

Developments in Trinidad and Tobago should be of interest to the Guyanese people, and especially as it relates to those who have policies and investments in CLICO (Guyana).
During the Heads of Government Conference of Caricom, held in Jamaica, last week, the new Prime Minister of Trinidad & Tobago, Kamla Persad-Bissessar, made it clear that the twin island republic was not going to be the ATM (Automated Teller Machine) of the Caribbean. Her comments were in relation to the use of her country’s Petroleum Fund.
There have been some demands made on her country to bear some of the costs of a regional security programme, but if one were to draw inferences from her comments at the summit, it would seem as if she was suggesting that Trinidad & Tobago has its own fiscal problems and is not going to be there to bail out any and every case.
She is indicating as much that her country has to have the first rights on its own financial resources. This is a fairly reasonable position. Trinidad and Tobago is facing its own problems and therefore has to give priority to its own needs.
So what does this mean for Guyana? Under the Patrick Manning administration, Trinidad and Tobago committed to helping out those countries of the region who had suffered as a result of the financial crisis caused by the collapse of CLICO. T&T was expected to provide a healthy sum which, as is understood, was expected to help Guyana cover all the liabilities that would accrue to CLICO.
The government of Guyana had indicated to all the policyholders and investors in CLICO that they were not going to lose their monies. No one has asked what monies the government was referring to. In the case of policyholders and those with pension plans, will they enjoy benefits as if their policies were never interrupted?
That is, will they be paid the full sums insured upon maturity of their policies and will the pension funds continue as normal? Or is it that the government only intends to guarantee the sums which have been paid as premiums?
Then there are those who have deposit certificates with high rates of interest. Just what is the government guaranteeing? Are they guaranteeing just what was put in, or are they guaranteeing the matured value of the certificates of deposit?
It is important that the government addresses this matter of just what is being guaranteed, because there are signs from Trinidad and Tobago – whose government had to take over that country’s CLICO operations – that the investors may end up only with what they put in and not with what they may have been anticipating prior to the collapse.
In the case of the Ponzi scheme run by Bernie Madoff, it has been made very clear that no one will get back more than what they put in. Thus if someone invested 100 million dollars hoping that over time this will yield 200 million, that person will not get a cent more than what they put in. In fact, they may end up only receiving a portion of their 100 million, depending on how much money the investigators recover. For this reason, the government of Guyana needs to clarify through a statement just what its guarantee covers.
The government is at present constrained from acting on any payouts since the liquidation order is still before the courts and the government has to await the decision.
What should also be clarified is whether the government has received any of the promised funds from Trinidad and Tobago. Some US$15 million was promised. Has this money been received? And was it from the Petroleum Fund? If it has not yet been received, then those funds may be in jeopardy considering the statements about Trinidad & Tobago not being the ATM of the Caribbean. And just in case the money is not there, what are the options for the government. It is time for the government to speak on these issues.