Jagdeo plundered NIS resources then says agency bankrupt – Volda Lawrence

Apr 30, 2022 News

---

– VP defends self by boasting about Berbice Bridge investment

Kaieteur News – Former Health Minister and member of the People’s National Congress Reform (PNC/R), Ms. Volda Lawrence on Thursday addressed what she described as “lies” told by Vice President, Bharrat Jagdeo as he responded to a Bath Settlement, Berbice resident, during an outreach to the Region on Wednesday.

The VP was reportedly questioned by a resident as it relates to the non-increase of National Insurance Scheme (NIS) benefits for retired workers when he explained that the agency was “bankrupt” due to the downsizing of the sugar industry by the former Coalition government.
To this end, the Member of Parliament (MP) argued that it was Jagdeo who “destroyed” the NIS when he abused his power to access the resources of the state entity to “invest” in ventures such as the Berbice River Bridge.

Lawrence said, “May I remind Mr. Jagdeo and NIS pensioners, also current contributors to NIS and the world at large, that it was this very Vice President, who despite the advice from the Board of Directors of the NIS, including Guyanese with experience in financing and investment, proceeded to invest the members’ monies in the Berbice River Bridge, the CLICO (Colonial Life Insurance Company) Insurance Scheme and Laparkan, among others.”
The MP reasoned that Jagdeo must be reminded that it was under his watch that the NIS resources were plundered as she highlighted that $2.5 billion was invested by the VP into common shares for the Berbice Bridge and another $810 million into the said bridge to cover the non-performing assets in the entity.

In addition, she referenced the ‘CLICO fiasco’ where over $5 billion of NIS monies were again invested by the then President which was later placed under judicial management in 2009 and subsequently was liquidated in September 2010.
“I wish to remind Mr. Jagdeo that it was the combined opposition in the National Assembly by its very majority voted and passed a resolution for the Liabilities of NIS to CLICO to be paid off. There was a commitment by his administration to do so but it was never done. Rather, it was that same combined opposition, which formed the coalition government in 2015 and granted payments to CLICO for NIS through the issuance of 20 non-negotiable debentures, to be redeemed annually over 20 years at a fixed interest rate of 1.5 percent,” she related.
To this end, the MP concluded, “By his actions this caused the resources of NIS to be further depleted.”
According to her, the VP should channel his efforts to advise the President and Cabinet on the provision of the Financial Institution Act of 1995 on how to treat with NIS under section 3 of the Co-operative Financial Institutions Act.
More importantly, she suggested that the government use one percent of monies accumulated in the Natural Resource Fund (NRF) to provide a subvention to the NIS to clear the deficit effected by Jagdeo.
In fact, she said that the coalition would have used this method, which would transfer some US$15 million to the agency, or one percent of the fund, on an annual basis to ease the tension caused by the Jagdeo administration and advised that this alternative be initiated.
“Of course a government who speaks of One Guyana will find no difficulty in committing to this approach for the next five years. We, the Opposition stand ready to approve such an approach should it be brought to the National Assembly,” Lawrence pointed out.
It must be noted that the NRF Act of 2021, the law that governs the fund, states that the resources can be used to support ‘national development’ priorities including any initiative aimed at realising a green economy. Additionally, the Minister of Natural Resources can make a request to Parliament for a withdrawal, in the event of a natural disaster.
GTUC issues warning
In a statement to the media on Friday, the Guyana Trade Unions Congress (GTUC) urged workers to not accept the excuses of the government regarding its inability to increase pensions.
The union body argued, “The citizens/workers of Guyana must not accept Vice President Bharrat Jagdeo’s casual declaration and excuses about the National Insurance Scheme’s (NIS) inability to increase pensions without holding the People’s Progressive Party/Civic (PPP/C) and its Vice President personally responsible for fixing this current state of affairs.”
GTUC added that workers and pensioners must not accept that the “fabricated” 7000 lost GuySuCo jobs against the NIS report from the General Manager (GM), Ms. Holly Greaves, which said GuySuCo lost around 4000 employees in 2018.
The union quoted a statement made by the GM where she reassured that “while the restructuring of the Sugar Corporation had the potential to seriously affect the level of contributions received…a large number’ (around 60 percent) have re-registered as self-employed or have moved on to different companies.”
To this end, the body said that while a reduction in contributions would be of concern to the NIS, the labour market recharges itself as employment shifts from one sector to another which disqualifies Jagdeo’s statements.

 

According to the GTUC, “The Scheme has been reporting deficits in income versus expenditure in recent years, and would have been subjected to actuarial reviews years prior advising on sustainable management which the PPP/C would have ignored too many times, bringing us to where we are today. Many are scared and worried. They have all the right to be.”

The union noted too that pensioners are a very vulnerable section of the population and amidst a global pandemic and a spiraling cost of living; many continue to struggle to keep afloat with their NIS earnings. To this end, they urged that the state of affairs be addressed immediately.

“It is insufficient for Mr. Jagdeo to merely state the Scheme’s inability to pay increases and of their intent to maintain pension or attempt to walk back what he said on Wednesday in Bath Settlement, Berbice, on the campaign hustings. Whatever problems exist with NIS should be laid squarely at Mr. Jagdeo’s feet and he, President Irfaan Ali, and the PPP/C must fix these forthwith. NIS is the workers only safety net and it must not be allowed to become insolvent through poor political policies,” the union concluded.

Jagdeo response
At a press conference he called on Friday too, the VP responded to the accusations that he made NIS bankrupt through the Berbice Bridge investment. Jagdeo did not make mention of any of the other investments made with the resources of the NIS, but explained that the Berbice Bridge venture led to returns in the billions for the agency.
While reading from the accounts performance of the NIS, Jagdeo said, “In 2015, it had an operating surplus of $968 million; in 2016 $161 million that is an operating surplus it was still more money; in 2017 $175 million in deficit; in 2018 $1.6 billion in deficit; in 2019 $1 billion in deficit; in 2020 $1.7 billion in deficit.”
He went on to say that Lawrence told the nation he invested $2.5 billion into common shares for the Berbice Bridge; however, the facility’s total common shares only amount to $400 million.
He said, “They (NIS) invested $300 million in bond one, which is at nine percent, bond two is $760 million and that’s at a 10 percent rate then the subordinate debt $500 million at 11 percent, preference shares $950 million and common shares $80 million.”
When it comes to the returns from the investments, Jagdeo said the $300 million on the bond was repaid as well as $276 million in interest. On the $760 million, NIS received $995 million in interest. On the subordinate debt, the agency received $65 million so far and $517 million in interest. On preference shares, $268 million was made on the $950 million investment. On its common shares, NIS is yet to receive any return.
Overall, Jagdeo said about $2.59 billion was invested and $2 billion has been returned in interest and preference shares and another $1.3 billion in principal repayment. He boasted, “So far, they have received $3.3 billion from a $2.5 million investment. It’s the highest yielding instrument that yields more than the Treasury Bill…”

 

 

---

---