The Jagdeo/Ramotar regime is to be blamed for NIS bankruptcy.
By Political Correspondence
When one reads the press release from the PPP regime on the National Insurance Scheme (NIS), especially the role of Dr. Roger Luncheon, one is reminded of a character called ‘Kumbakaran’, the brother of the evil king Rawan in the Hindu epic, the Ramayana, who slept for half the year and creates undue destruction when he is awake.
Now that there is an impending insolvency of NIS, Dr. Luncheon has finally awoken from his slumber and is on the path of unleashing destruction and penalties on the poor and the working class of Guyana with the upcoming PPP-imposed NIS rate hikes.
While he was asleep, the Jagdeo/Ramotar regime did the following:
1. Invested some 20% (G$4.75 billion) of the assets of NIS into CLICO.
2. Allowed many of the PPP “fogies” who earn millions in contract work from the taxpayers to evade their social security responsibility to their employees by not making their NIS contributions in a timely manner; if at all.
That translated in hundreds of millions of lost income for the NIS and the fattening of the personal pockets of these individuals, which for them, is more important than their corporate social responsibility.
3. Appointed an NIS Reform Committee for the formality and then threw most of the recommendation into the “dustbin” thus putting off the much needed NIS reforms in 2011.
If Dr. Luncheon as the Chairman of the Board of NIS supported the decision to invest 20% of NIS assets (the workers’ money) into CLICO, then his poor judgment made him unfit to hold the position of Chairman. Also, we would like to know what was the Government’s rationale to guarantee this $4.75 billion NIS investment in CLICO?
In light of the fact that most of the Trinidad funds of $3 billion will be used to first fund other creditors and the PPP “fogies” who have invested in CLICO, the NIS can only expect to receive the crumbs. This was clearly a dereliction of duty by the Jagdeo/Ramotar regime that has resulted in a major financial loss to the nation.
There is evidence that the NIS was poorly managed by Dr. Luncheon and his PPP cabal and therefore we call on the majority parliamentary opposition to demand his immediate removal as the Chair of the Board and that a new Board be reconstituted with efficient and non-PPP members to oversee the NIS. The poor and the working class in Guyana deserve better.
The NIS debacle could lead to a potential increase in the national debt which could be as much as G$3 billion. This may become a “double whammy” on the working class since as a result of NIS being technically insolvent, the Jagdeo/Ramotar cabal will be raising the NIS rates and on top of that, the working class will be called upon to pay more to fund the unsound NIS investment in CLICO that was authorized by the PPP.
The workers (on average 1/3 of the population) who pay into the NIS all their life, can expect decreases in their real pension benefits, accident and disability allowances in the future as inflation will eat away at what little they have presently, with minimal hope for significant real increases in the near future to meet their social needs.
The Jagdeo/Ramotar cabal has today subjected the poor and the working class in Guyana to a “salt and rice” standard of living.
So for Dr. Luncheon to say that the “… five years annual revenue growth has not been keeping up with expenditure growth and that situation is related primarily to demographic changes” is bordering on falsehood; it is classic PPP political fabrication.
Dr. Luncheon has not told the people all the facts we have outlined above, including that pertinent fact that there is an investment asset item called Accounts Receivables from CLICO of some $4.75 billion which was supposed to generate some $360 million in new income every year but to date has brought in very little, if any, since CLICO is not in a position to pay.
If the Jagdeo/Ramotar regime had not invested the assets of the NIS in CLICO, the NIS would have had enough funds to meet all its financial obligations until 2018. This is not our opinion but that of many chartered accountants/firms in Guyana.
It is likely that with the impending insolvency of the NIS, the existing NIS contributors—the sugar workers, bauxite workers, public/civil servants, manufacturing and others will not receive their full benefits. For them to receive their full benefits and keep the NIS solvent, the government will have to increase the contributions of workers and employers.
So once again this uncaring and corrupt Jagdeo/Ramotar PPP regime has not only disappointed the poor and the working class in Guyana, but they have to carry the burden for the poor investment and mismanagement decisions by the PPP.
We believe that the time has come for GAWU and the sugar workers to distance themselves politically from this corrupt and failed Jagdeo/Ramotar regime.
Finally, we call on the NIS to conduct the eighth actuarial review immediately, since the seventh, which was done six years ago is outdated and cannot provide the quality of information needed to engage in effective consultation on this PPP-created crisis.
Again, here is another case of the Jagdeo/Ramotar cabal not getting their “arithmetic” correct.