President Jagdeo jeapordized retirees’ future

May 23, 2016 Letters

Dear Editor;
We need constitutional reform to place limits on the powers of the President. The NIS is a pension fund for the nation’s retirees, and only the Board of Directors has the power to appoint a professional advisor or firm to invest these funds.
Here we see a president literally hijacking the pension funds – he had over-ruled the Board of Directors – and placed the funds at the disposal of the Bridge Authority. Now the funds are sunken or lost. End result: The funds are not there to pay the retirees.
There are some other issues: (1) NIS put up the largest portion of funds to build the bridge – but the a few large individual investors (Bobby Ramroop, DDL) have more representatives on the Board than NIS. (2) Returns (dividends/interest) on Ramroop’s and DDL’s investment are guaranteed, no so with NIS’s.
I am not suggesting the bridge should not have been built. The idea for the bridge should certainly go to the credit of President Jagdeo. However, the problem was with the financial architecture (mix of financial instruments – bonds and types of common stock etc.) and from whom you raise the funds. If the investment in the bridge was risky, by all means do not take the nation’s pension funds. A large pool of at least 50,000 Guyanese abroad could have been invited to buy at least two bonds each (one bond is $1,000) paying 5 percent annual interest. That bond sale of say, 30-year bonds, could have raised $100 million. There was absolutely no need to commandeer NIS funds to do a risky bridge project.
Mike Persaud

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