-over CLICO fiasco
The PNCR and the AFC yesterday demanded the resignations of both the Minister of Finance and the Commissioner of Insurance over the crisis that has engulfed CLICO (Guyana).
In a statement, the People’s National Congress Reform (PNCR) pointed to CLICO (Guyana) as the first victim of the “serious financial crisis” the country was in and the party, like the Alliance For Change (AFC), called for the immediate resignation of Finance Minister, Dr Ashni Singh and Commissioner of Insurance Maria van Beek for not moving swiftly to stave off the crisis.
In its statement, the AFC said the nation now has no confidence in the ability of the finance minister or the commissioner of insurance “to manage this obvious crisis” and for being less than forthright with the people of Guyana.
The AFC noted that the takeover comes in the wake of statements made by both the President of Guyana and CLICO executives, less than two weeks ago, when they gave the assurance that the economy of Guyana was sufficiently insulated against the effects of the global financial crisis and that CLICO’s local operations were a separate entity from sister and associated companies under the CLICO financial umbrella and therefore would not be affected by the problems of the parent company C L Financial.
What is required now, the AFC posited, is a clear and undiluted assessment of the true picture as it depicts the state of the financial sector in Guyana, including the degree of risk to the Guyana economy, and to the thousands who depend on the National Insurance Scheme (NIS), which has $6B with CLICO (Guyana), other pension schemes, savings plans, medical schemes and other financial services facilitated by CLICO (Guyana) and finance/investment companies in Guyana.
The AFC recalled that it had previously warned that government was being “too complacent and inept by simply stating that Guyana’s financial system was sufficiently insulated from the shocks and tremors of the global financial tsunami.”
This attitude, the AFC continued, was in stark contrast to the situation in other Caribbean countries where governments and stakeholders had already begun examining ways of staving off the harsh effects of the ongoing financial global meltdown.
The AFC also asserted that “this is the last straw of the government’s deficiency and incompetence as they have placed at risk the financial security and quality of life of thousands of Guyanese by their arrogant refusal to acknowledge the obvious threat and to be forthright and honest with the people who expect nothing less from them at this time.”
The AFC also expressed its strongest condemnation of the management of CLICO (Guyana) Inc., the Commissioner of Insurance, and the Government of Guyana and more particularly the Minister of Finance, the release concluded.
Ominous
Meanwhile, the PNCR in its press release noted that even though the government was not acknowledging that Guyana was in the midst of a serious financial crisis, CLICO was the first victim since by now “Guyanese must be aware that the Jagdeo Administration has taken legal action for the liquidation of the CLICO Insurance Company.”
The PNCR declared that “this is a most ominous development which has serious implications for the real economy, including and especially the question of the exchange rate.”
According to the PNCR, the government has conducted itself in the “most irresponsible manner in relation to valuable assets held by the Guyanese people (and) this applies to the thousands of workers who are dependent on the National Insurance Scheme (NIS), which has a substantial investment in CLICO.”
The major opposition party blamed the government for failing to “act with dispatch to protect the investment made by the Guyanese workers in CLICO,” adding that the administration had not put in place the necessary measures to assess the implications of the Hand-in-Hand Insurance Trust Company being exposed to the tune of nearly US$1.5 million in pension funds to the Stanford Group.
The PNCR declared that the problems of the Hand-in-Hand Insurance Trust Company are far from over and in that light the party recommended that a “critical and frank assessment” be made of the financial situation of the company.
According to the PNCR, “one would have thought that the early problems of CLICO and the problems of Hand-in-Hand would have jolted the Jagdeo Administration into taking matters in hand and institute prudent measures to protect the assets of the Guyanese people.” However, the party continued, at each indication of the financial crisis, President Jagdeo and the Minister of Finance merely stated that they were “monitoring the situation”.
In fact, the PNCR stated, the President and the Minister of Finance failed to carry out their duty by having an independent assessment done of the situation, and instead they relied on information provided by CLICO while the Bank of Guyana and the Commissioner of Insurance also did not act.
The PNCR also charged that even as the government was “sitting on its hand and burying its head in the sand, there is more than enough evidence that they knew that the CLICO Insurance Company was in serious trouble.”
The PNCR said further that it has information that approximately two weeks ago the government facilitated the inflow of liquidity into CLICO by cashing in bonds issued in relation to the Berbice Bridge but it appears that the bonds were bought by another entity and not by the government.
In contrast to what the PNCR deemed “the slothful and irresponsible behaviour of the Jagdeo Administration,” the party noted that the Government of the Bahamas when it realised that its CLICO subsidiary might be in difficulty held discussions with “principals of the company over many months urging and directing them to inject additional capital and liquidity into the company
…” The Government of the Bahamas only decided to liquidate the CLICO company in the Bahamas after this course of action bore no fruit.”
The PNCR also referred to its earlier call for the government to appoint a group of experts from within Guyana and the Region who understand the intricacies of the local and regional economies to examine the current financial and economic crisis and to propose solutions which might help to cushion the effects of this unprecedented situation.
Now the PNCR is urging that the crisis be raised on an urgent basis at the next summit of the Caribbean Community since it is regional in scope and dimension.
