Jagdeo’s benefits likely cost Guyanese $4.2 million per month

Jul 25, 2014 Letters

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Dear Editor,
The government released figures on Jagdeo’s electricity, transportation and security expenses from December 2011 to February 2014, a period of 27 months. Total electricity bill for the period was $9,875,680 at a monthly average of $365,766. Total transportation was $15,220,748 at a monthly average of $563,371. Total security bill was $20,321,520 at a monthly average of $752,649. The Minister apparently did not submit all the requested information and the opposition, as usual, was negligent in asking for an itemized list of all covered benefits under the Former Presidents (Benefits and Facilities) Act. Therefore, we are left with an incomplete picture of the totality of the largesse Jagdeo is enjoying under this law. However, the limited snapshot of expenditure offered on just three items – transportation, electricity and security – is already frighteningly mind-blowing. On only these three items, Jagdeo racked up a stunning $45,417,948 in expenses. That is $1,682,146 per month for just electricity, transportation and security.
To understand the shameless and unconscionable atrocity here, the Bank of Guyana’s reported Guyana’s GDP per capita for 2013 as US $3496.30 or GY $699,260. Yes, you saw it absolutely correctly; Jagdeo’s MONTHLY expenses on only electricity, transportation and security is 2.4 times what every citizen of Guyana was valued at for the entire 2013. Guyana is producing an average of GY $699,260 per YEAR and Jagdeo is consuming $1,682,146 per MONTH only for electricity, transportation and security. This is not to mention Jagdeo’s pension, which is roughly $1.2 million per month. But there is even more. The Former Presidents (Benefits and Facilities) Act makes taxpayers liable for the following (1) water (2) telephone (3) personal and household staff including an attendant and a gardener (4) clerical and technical staff, if requested (5) medical expenses for the president and dependants (6) motor vehicles owned and maintained by the State (7) toll free road transportation in Guyana (8) an annual vacation allowance equivalent to the cost of two first class return airfares provided on the same basis as that granted to serving members of the Judiciary.
Water and telephone use for a mansion with a pool and a former president with significant overseas contacts to call abroad is probably in the range of $50,000 per month. Using the assumption that the total household staff (cooks, attendants, gardeners, cleaners) for Jagdeo is generally equivalent in cost to Jagdeo’s monthly security expense, we are looking at approximately $750,000 monthly for these staff. Assuming clerical and technical staff has been retained, we are looking at another $300,000 to $500,000 per month for clerical and technical staff (we will use $300,000 in our calculation).
Medical expenses, excluding medical transportation, for Jagdeo is difficult to estimate and is certainly going to be less now than in the future as he gets older. Jagdeo has already demonstrated by that trip the willingness to seek medical treatment abroad as opposed to utilizing treatment at home. It is highly likely given this precedent that Jagdeo will utilize medical treatment abroad as a first option. This is a very expensive route. I will use an estimate of $100,000 per month (US $500 per month) to cover future medical expenses (not medical transportation), which will increase with aging.
Motor vehicles provided by the state are probably included in the figures provided for transportation, but that would obviously not include the purchase price of vehicles by the state solely for Jagdeo and their maintenance and depreciation costs. It is unclear if fuel expenses for transportation are included in the figures released by Ashni Singh, so clarification is required by the opposition on this item.
Using two new high-end vehicles such as Prados purchased for Jagdeo or make exclusive for Jagdeo’s use at any given time at a purchase price of $5 million each or $10 million total and used for five years before being replaced with new similar vehicles, we are looking at a depreciation loss to taxpayers of approximately $5 million covering 5 years for both vehicles or $83,000 per month. This is based on North American average depreciation values. Maintenance of these vehicles is yet another cost. Estimating maintenance at 10% of purchase price or $1 million over five years, which is equivalent to monthly maintenance cost of $17,000, we have a total depreciation and maintenance cost of $100,000 per month.
Again, this estimate is based on only two high-end vehicles and does not include operational costs such as fuel purchases and the cost of hiring drivers. Toll free road transportation is likely a nominal item.
The toll on the Berbice Bridge is the significant expense for road tolls in Guyana. The question is whether Jagdeo himself has to be on the trip or whether the relief is available to his staff doing work on his behalf. A reasonable estimate for tolls is $2000 per month. A first class return airfare on Caribbean Airlines to a major city like New York is approximately US $1500. Two such tickets would cost approximately US $3000 or GY $600,000 per year or $50,000 per month.
To estimate Jagdeo’s monthly tax-free expenses paid for by the taxpayers, we add the following: electricity $$365,766; plus transportation $563,371; plus security $752,649; plus pension $1.2 million; plus water & telephone $50,000; plus personal and household staff $750,000; plus technical and professional staff $300,000; plus medical expenses $100,000; plus vehicle costs $100,000; plus $2000 toll free road transportation; plus vacation expense $50,000. The total of these known and estimated expenses is $4,233,786 per month or US $21,169 per month.
This is equivalent to GY $50,805,432 per year or US $254,027 per year. The yearly value of these tax-free benefits is equivalent to being in the top 1.5% of US households in terms of income and the value is 72.66 times the GDP per capita of Guyana. Based on this estimate, it is possible that the Guyanese people have paid and funded just over $114 million in tax-free benefits to Jagdeo for the past 27 months.
The other issue is how much will this cost taxpayers for the rest of Jagdeo’s life. I do not like to pronounce of issues like life expectancy but for the purposes of estimating how much a certain legislation could cost taxpayers, it is important to do so to ensure the nation understands the economic cost and burden of these benefits. Clearly, Jagdeo’s life expectancy cannot be based on the average Guyanese life expectancy for the simple fact that Jagdeo has experienced a better standard of living than most Guyanese since his twenties and is expected to live longer than the average Guyanese as a result. His access to these Mercedes-Benz benefits will likely place him at North American life expectancy, which is 75 years for males. What will this cost taxpayers to age 75 for Jagdeo?
Using January 2012 as the baseline when he was 48 years and assuming he lives to age 75, Jagdeo will likely have 27 years of remaining life. At an estimated GY $$51 million per year in benefits, the total cost to taxpayers will be $1.38 billion Guyana dollars or US $6.86 million. This calculation does not consider yearly increases to these amounts and costs, which are highly likely. For example, a simple three percent yearly increase in the cost of these benefits largely due to the demands of aging will see the total cost of the benefits at skyrocket to around GY $2.06 billion) by age 75 or US $10.3 million.
These figures are subject to correction by the Minister of Finance and Mr. Jagdeo himself, with proof, of course. They highlight the travesty this unlimited benefits package really is. Donald Ramotar who has been a failure will reap these benefits. In fact, a minimum of three presidents and up to seven presidents could be elected by the time Jagdeo turns 75 years. At the cost of $2.06 billion or US $10.3 million per president, this unlimited package to all presidents elected before Jagdeo turns age 75 could cost taxpayers a minimum of $10 billion to a maximum of probably $30 billion. In a country teeming with poor people struggling for survival, this pension benefits package is an abomination. When will the Guyanese people wake up?
M. Maxwell

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