FINANCIAL CRISIS FACES GUYANA: THE MINISTER OF FINANCE AND THE COMMISSIONER OF INSURANCE MUST RESIGN--PRESS RELEASE February 26, 2009




Even though the Jagdeo Administration is doing its best not to admit it, Guyana is in the midst of a serious financial crisis. The Colonial Life Insurance Company (CLICO) is the first victim. By now Guyanese must be aware that the Jagdeo Administration has taken legal action for the liquidation of the CLICO Insurance Company. The People’s National Congress Reform wishes to go on record as saying that this is a most ominous development which has serious implications for the real economy, including and especially the question of the exchange rate.

The Jagdeo Administration has conducted itself in the most irresponsible manner in relation to valuable assets held by the Guyanese people. This applies to the thousands of workers who are dependent on the National Insurance Scheme (NIS), which has a substantial investment in CLICO. It did not act with dispatch to protect the investment made by the Guyanese workers in CLICO and it has not put in place the necessary measures to assess the implications of the Hand-in-Hand Insurance Trust Company losing nearly US$1.5 million in pension funds. The PNCR believes that the problems of the Hand-in-Hand Insurance Trust Company are far from over. The Party, therefore, recommends that a critical and frank assessment be made of the financial situation of the company.

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. Instead, 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 President and the Minister of Finance failed to carry out their duty by having an independent assessment done of the situation. Instead they relied on information provided by their “friends” at CLICO. The Bank of Guyana and the Commissioner of Insurance also failed to do their duty.

But even as the Jagdeo Administration 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 has information that approximately two weeks ago the Government of Guyana had to facilitate the inflow of liquidity into CLICO by cashing in bonds issued in relation to the Berbice Bridge. However, it appears that the bonds were bought by the National Insurance Scheme (NIS) and not by the Government of Guyana.

In contrast to the slothful and irresponsible behaviour of the Jagdeo Administration, 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 believes that the Minister of Finance, Dr. Ashni Singh and the Commissioner of Insurance, Ms. Maria van Beek have been derelict in their duties as the foregoing facts amply demonstrate and the Party therefore has no hesitation in calling for their immediate resignations.

The Party also wishes to remind the Jagdeo Administration that it has been calling for the appointment of 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 propose solutions which might help to cushion the effects of this unprecedented situation.

Relatedly, as the crisis is regional in scope and dimension, the PNCR urges that it be raised on an urgent basis at the next summit conference of the Caribbean Community.

The PNCR Leader, Mr. Robert H. O. Corbin, MP moved a Motion in the National Assembly of the Parliament, today, February 26, 2009, seeking the adjournment of the house to discuss as a matter of urgent public importance, the financial crisis facing Guyana caused by CLICO, Hand-in-Hand and other entities, so that this crisis which has begun to take hold in Guyana can be ventilated by the National Assembly. Regrettably, the Motion was denied albeit the Speaker admitted that the matter was urgent and of public importance.

The PNCR will table another Motion on this matter in the National Assembly of the Parliament under another Standing Order which could permit it to be debated in three days time.

People’s National Congress Reform
Congress Place, Sophia,
Georgetown, Guyana
Thursday, February 26, 2009