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No more plaster fixes, NIS needs refinancing-Christopher Ram
Chartered Accountant and Attorney at Law, Christopher Ram, believes that Guyana’s National Insurance Scheme will not be able to fully escape financial trouble unless it is refinanced. Ram said this during a recent interview with this newspaper.
The lawyer, who has been associated with NIS since 1979, said that the APNU +AFC government has demonstrated good will for the NIS but dealt too much with plaster fixes.
He said that the best thing that Government has done for the NIS thus far was agreeing to pay the face value of what was lost by NIS through its investment in the now defunct CLICO (Guyana). This was under the People’s Progressive Party/ Civic (PPP/C) government.
In September 2016, Government formalized a deal through which NIS will recover $5.6B. NIS is now set to recover its investment in CLICO through a debenture for an aggregated value of the $5.6B.
CLICO (Guyana) collapsed in 2009 after its parent company, CL Financial, had to be bailed out by the Trinidad government and its sister companies experienced grave financial pro
Chartered Accountant, Christopher Ram
blems.
This debenture signed by Finance Minister Winston Jordan will see the scheme recovering the sum over a 20-year period. It is in keeping with Parliamentary Resolution 82 of 2009, which had called on the then PPP/C government to take “all possible actions to secure the investments made in CLICO (Guyana) by the NIS on behalf of contributors and beneficiaries of the Scheme to prevent any consequential loss in benefits to them.”
The parliamentary resolution had been supported by the PNCR and the AFC, which are members of the current governing coalition. The two parties had criticised the then PPP/C government over its handling of the CLICO (Guyana) collapse.
Ram praised the government for helping NIS through the debenture.
He said that that is not a plaster fix, “It is substantial, but everything else can be considered plaster work.”
Ram said, “It is worrying how they looked to deal with plaster rather than causes. NIS needs refinancing. Since I was young I said this. (Former President, the late Linden Forbes) Burnham said, ‘Look you can only get five percent bonds. But this is while inflation is running at 30 and 40 and 50 and 60. We had over 70 percent inflation at one time in this country. Five percent cannot cut it.”
Ram continued, “NIS is just structurally improper. NIS has nothing to do with increase in minimum pension. But we link NIS to old age pension.
“What should happen is the government should say ‘We want NIS to carry this social cost and therefore we must allocate that money from the public treasury. If that was done then we would have been home and dry but the problem is that we do not have people who understand.”
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