Category: Letters to the editor

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There is a gap of between 15,000 and 19,000 who are paid the Old Age Pension but are not entitled under the law

Minister of Human Services Ms Priya Manickchand behaved with apoplectic rage in response to a conclusion in a report by her parliamentary colleague Mrs Sheila Holder that the number of persons to whom the Old Age Pension (OAP) is paid is inflated by 17,640 (phantom persons, according to Mrs Holder) with a loss to the state of over $1.3 billion.

Ms Manickchand reacted badly too to a cartoon in the Stabroek News of January 27 depicting her unflatteringly, prompting a letter by her which appeared with another by Mr Ivelaw Henry, her Chief Statistical Officer, both on the same day in the Stabroek News (Saturday, Jan 29) challenging Mrs Holder’s numbers. They both cited in support of the numbers being challenged projections done in November 2006 by a Mr Sonkarley T Beaie, who is described as a UN demographics expert and the holder of an MPhil, perhaps with a view to impress us.

To understand the conflicting positions, it is convenient to address three separate but related issues – statistics, the legal framework for the payment of OAP, and the arrangements in place for the payment of Old Age Pensions.

The most recent census done in 2002 shows the following data in relation to persons 65 years and over:

Between censuses, the country’s mid-year population is tracked by the Bureau of Statistics from data on births, deaths and migration, and is reported on in an appendix to the annual Budget Speech by the Minister of Finance. This is what the Bureau of Statistics reports for the years following the 2002 census: 2003 – 752,500; 2004 – 755,100; 2005 – 757,600; 2006 – 760,200; 2007 – 763,200; 2008 – 766,200, 2009 – 769,600, 2010 – 777,900.

One must always be cautious about population data and even more careful about making assumptions from them. I therefore wonder why instead of taking the actual population figure Mr Henry and his Minister chose to rely on Mr Beaie’s increasingly incorrect projections which for total population in 2010 were “wrong” by 10,000. It is fair to say that any major change in the characteristics of a population – other than through migration, a plague or a baby boom – takes place very slowly. From 1980 to 1991 the shift in the over 65 age group was a 0.16 percentage point and from 1991 to 2002 it was a 0.12 percentage point as shown in the table above. Even if we generously assume that the percentage of that group as a percentage of the current population has climbed to 4.5%, the maximum number of persons eligible for OAP would be approximately 35,000, or 7,000 less than the “around 42,000” the Minister of Finance referred to on more than one occasion in his Budget Speech.

That is not the end of the story, since not every person 65 and over is entitled to OAP. The Old Age Pensions Act sets as the conditions for eligibility for OAP that the person must have: (a) attained the age of sixty-five years; (b) been a citizen for ten years; (c) been ordinarily resident in Guyana during the last twenty years; and (d) passed a means test based on income and assets. Therefore any returnee to Guyana before 1991 is not entitled to a pension because of condition (c) and many if not most of the senior citizens living in Courida Park, Queenstown, Pradoville, Oleander Gardens, Republic Park, former senior public servants, professionals including doctors and lawyers, etc, are not entitled under condition (d).

We all have and know of countless others of our friends and relatives and their parents who do not claim Old Age Pensions. These would include persons 65 and over in the population not entitled to on account of their income and/or assets, plus those who are entitled to but do not claim because they do not know they qualify, plus those not entitled because they returned to Guyana less than twenty years ago. Those probably number between 8,000 and 12,000. To get to the number who meet all the tests, we need to deduct these from the maximum, theoretical 35,000, leaving between 23,000 and 27,000 persons who are entitled. This means that there is a gap of between 15,000 and 19,000 who are paid, but who are not entitled to the pension under the law.

At the current rate of $7,500, between $1.4 billion and $1.7 billion is being paid out unlawfully each year.

A recent Value-For-Money audit done by the Audit Office identifies a host of accounting and audit issues that could have given rise to the wide gap.

While the Audit Office must be commended for undertaking the exercise, it is regrettable that it did not attempt to put in dollar terms the range of values involved in its findings, and that it did not look at the related public assistance programme that is subject to even fewer rules and is more politicised and corrupted.

Let us put the calculation into perspective. If Old Age Pensions were paid only to persons legally entitled, then each pensioner could easily receive another $4,000 to $6,000 per month out of the money allocated in the 2011 Budget.

Ms Manickchand should now be willing to make her list publicly available for scrutiny.

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Mr Nadir here are some of the state entities with poor audit records

Mr. Manzoor Nadir’s letter on the 2011 budget (Stabroek News, January 23, 2011: Dr. Ashni Singh’s credentials are impeccable) was the kind of “honesty” that Guyanese have come to expect from this itinerant political leader. Mr. Nadir accuses me of being envious of Dr. Ashni Singh’s brilliance and credentials; invites me to join the leadership of the PNC/R and then goes on to praise the 2011 Budget. The second is the most convenient to dispatch first: Mr. Nadir must know that I declined an invitation to be nominated for the presidential candidacy of the PNCR and I also refused his invitation to go on the TUF slate for every election since 1997. I now address the other issues.

I last had a cordial discussion with Mr. Nadir this Tuesday, January 19, the day after the 2011 Budget. He acknowledged my correction of a misleading claim he made last year on the performance of the economy and that he had begun to repeat this year. He also indicated that he relies on the Ministry of Finance for some of his numbers. This gentleman is the leader of the country’s only declared anti-communist party who gave himself completely to the country’s only declared Marxist party, one that has distinguished itself by the single word corruption! Maybe he is honestly trying to correct the historical wrong of his party’s joining with the PNC to cause the PPP to lose office.

His accuracy or honesty, or both, come again into question in trying to attribute to me personally an official publication of Ram & McRae, of which I am one of three partners. The analysis did not question Dr. Ashni Singh’s credentials and I would have hoped that Mr. Nadir would recognise the analysis – done by a team of the firm’s dedicated and professional staff working through Budget night – was about the Budget and not about either Dr. Singh or me. In fact I now say that Dr. Singh’s credentials stand in marked contrast to the increasingly intellectual bankruptcy of his and the PPP/C’s annual budgets.

I would avoid Mr. Nadir’s personal attacks and forays into my mind and motives and address only the essential points in issue. As the Ram & McRae analysis pointed out, and which Mr. Nadir could not dispute, the personal allowance of $40,000 now is in real terms less than the value of the $35,000 when it was set at that level three years ago. Nor can he dispute that the Minister did not indicate the cost of the tax proposals in the budget speech, a cost that just might show that businesses are expected to receive more from the 2011 Budget than the workers, pensioners and indigents.

On the issue of contract employees, Mr. Nadir correctly quoted from the firm’s analysis but then goes off into an excursion into diversion by explaining that “in 2010 we (government) moved all the cleaners, handypersons, drivers and lower level skills to contracted positions.” Mr. Nadir, like his political boss, must think this is a country of fools to believe that “cleaners, handypersons, drivers and lower level skills” can account for a 40% increase in that group. For the record I draw his attention to Table 9 of Volume 1 of the National Estimates, account code # 6115 Semi-Skilled Operatives and Unskilled, which shows an increased, not a reduced allocation, even after the low level “move”. The same applies to Temporary Employees and Clerical and Office Support!

Mr. Nadir must also know that his group of lower level skills is commingled with political appointees such as Reepu Daman Persaud, Feroze Mohammed, Harry Persaud Nokta, Shyam Nokta, Odinga Lumumba, Dr. Randy Persaud, Dr. Prem Persaud, Gail Teixeira and Kwame McKoy and hundreds of others at the Office of the President, the Ministry of Finance and indeed throughout the public service. Mr. Nadir should tell us which one of these contract persons earns less than $500,000 per month, not argue over the minimum wage about which “his” government has a questionable record. And he might wish to tell us whether the decision to treat the lower level persons as part of the group of contractors was done to disguise the average pay of this group after I had exposed it two years ago.

Stating that I used a broadside to describe the state of audits of public entities, he dared me to name any of those entities. Does he need any more than NICIL, the entity of which the Finance Minister is Chairman and through which state assets are diverted for unlawful purposes, and which disdainfully refuses to have an audit or to file an annual return? Just in case he needs more, here we go: Go-Invest, Guyana Energy Agency, Institute of Applied Science and Technology, Integrity Commission, GINA. Need some more? What about National Sports Commission, Guyana National Bureau of Standards, Environmental Protection Agency, etc.

Only someone who has not read the Public Corporations Act or the Guyana Revenue Authority Act would make such an uninformed and incorrect statement that it is the Auditor General who is responsible to report to Parliament on entities falling under those Acts. In fact, the Acts require the entities to submit, within six months of the end of the year, their audited financial statements and directors’ report to the Minister of Finance or other relevant Minister. It is the Minister who has responsibility for tabling them in the National Assembly. It gives me no pleasure to correct Mr. Nadir twice in one week.

Mr. Nadir does not help his Minister by his reference to the Audit Office, which provides evidence of a relationship between the Minister and that Office which constitutes a uniquely bad case of professional independence. Or by his questions about statistics which we know emanate from the Stats Bureau and the Bank of Guyana over which the Minister of Finance exerts both official and improper influence.

Two points in closing: one, it is the sycophancy of people like Minister Nadir that encourages the excesses, improprieties and illegalities of the Jagdeo Administration; and two, I hereby publicly invite Mr. Nadir and the Finance Minister to appear on Plain Talk to discuss the 2011 Budget. If Dr. Singh is unwilling, I invite Mr. Nadir to bring along one of his TUF colleagues. That is, if he can find one.

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Mr Lall and his gov’t cannot escape responsibility for the state of the dump site

Some of the many things that immediately come to mind about this government are the combination of its ignoring or ignorance of basic laws, its neutralising or neutering of the opposition and its tendency to pass the buck at every opportunity. Mr. Kellawan Lall, Minister of Local Government who stands out as a ministerial recipient of police tolerance – or their hesitation to prosecute crimes involving special persons – single-handedly demonstrated these failings in his statement in the National Assembly in relation to the Le Repentir garbage disposal site “I want to debunk the idea that this [site] has to do with the central government.” (S/N Friday December 31, 2010).

The minister’s expertise in dump site management was not known until that moment when he informed the National Assembly that “over the years, he had advised the Solid Waste Department of the M&CC how to manage the site but it failed to heed advice.” Here is a man who has acted autocratically on less important issues when the M&CC (sic) failed to take his “advice” but who, when the well-being of tens of thousands of the citizens of Georgetown is at stake, stands back for years, doing nothing and coming close to wishing a city-wide health pandemic to prove a political point.

Such a statement denying government responsibility and documented for posterity in the official parliamentary records should have been immediately challenged for its glaring and dangerous inaccuracy. Article 149 J (1) of the constitution sets out as a fundamental right of every citizen “the right to an environment that is not harmful to his or her health or well-being.” And Article 149 J (2) imposes on the State (emphasis mine) a duty “to protect the environment for the benefit of present and future generations through reasonable legislative and other measures designed to – (a) prevent pollution and ecological degradation…… “.

Mr. Lall at the very least ought to know as well that the Guyana constitution gives to every citizen a right to life. Courts in more normal countries have interpreted this right liberally and widely to include in addition to physical existence, quality of life, access to roads, the means to support life and living with dignity. Unfortunately, with the threshold for ministerial appointment in Guyana being exceptionally low, one does not expect Mr. Lall to be informed about these or about South Africa’s and more recently Kenya’s admirable constitutional safeguards of economic, cultural and social rights. But one does expect that the government’s legal advisors would attempt to educate ministers on general and specific matters pertaining to their work. The evidence so far is that this is not being done or that any effort is not succeeding.

More direct to the environment, my recent readings about citizens’ action in countries in Africa and in India provide ideal examples and support for Guyanese to take action against the government, the Environmental Protection Agency and the City Council for damage to the environment and the endangering of lives.

One example will suffice. As far back as 1996 the Kenya court ordered the shutting down of a school’s toilets because their odiferous gases interfered with and diminished a single individual’s ordinary use and enjoyment of his home. Here in Georgetown we have tens of thousands who are affected by the dump site, some more directly than others, no longer able to enjoy fresh air, to take an afternoon stroll, or to send their children out to play. And to add a desecrating touch, even the dead are again buried, this time by stinking, rotting, toxic garbage. Yet it seems that not one of the living, not any of their political leaders, not a single presidential aspirant, is concerned enough to raise their voice in protest, aggrieved enough to take action in defiance or interested enough to approach the courts for relief.

No surprise then that we have such uninformed, bungling and callous persons as ministers. That Mr. Lall is by no means unique makes it all the more troubling.

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The making of the Supreme Court a budget agency has placed the judiciary under threat

While the independence of the judiciary is often couched in lofty concepts about separation, one from the other, of the three arms of the state, the essence of it all is empowering, securing and protecting the judiciary and its individual members in their fearless and uncompromising defence of the fundamental rights of the citizens.

To ensure that independence, constitutions – including Guyana’s – provide elaborate mechanisms and safeguards to protect the judiciary and its members. These include security of tenure; salaries that are fixed and not subject to a vote by the National Assembly; Parliament can only add to the powers and jurisdiction of the Supreme Court but cannot curtail them; the power to punish any person for their contempt; separation of the Judiciary from the other branches of the state; and immunity from criminal and civil actions in respect of judicial decisions.

Despite this formidable armory, Rudolph James, a Professor in constitutional law, in The Constitution of Guyana published in the 2006 Special Issue 35-36 of Transition, a publication of the Institute of Development Studies of the University of Guyana, writing of the conduct of the judiciary during an earlier era noted that while the leadership of the country set about to miniaturise the judiciary, the “Guyana judges largely contributed to their subservient status.”

Professor James was optimistic that with the commitment to democracy expressed by the new ruling party in 1992 “one expected a transformation of the judiciary …” But a decade later James lamented the many acts of indiscretion of the leadership of the ruling party including the late Mrs. Jagan, current President Jagdeo, Dr. Roger Luncheon and even the government’s high ranking judicial officers, acts that would in a truly democratic state be treated as contempt of the court. Instead, Mrs. Jagan won a nod of approval from a senior counsel when in his and the presence of the then Chancellor she disdainfully threw over her shoulders a judicial notice.

The onslaught has continued, sometimes with the approval of some of the very judges whose sacred duty it is to ensure the independence of the judiciary and their own. They have not raised their voices as Jagdeo undermined the judiciary with financial and fiscal incentives, embarrassed its membership by challenging their competence and judgment, emasculated them with laws that are clearly in violation of the Constitution and dared them to caution him when he pronounces on matters that amount to contempt of their proceedings.

The Time Limit for Judicial Decisions Act is only the most recent case of the legislature seeking to control the conduct of individual members of the judiciary. But Jagdeo whose capacity to use and misuse public money will go down in presidential folklore knows that the judiciary’s independence can be compromised both at the personal and institutional levels. For the latter the tool chosen is the Fiscal Management and Accountability Act 2003, the most insidious piece of legislation the PPP/C has passed to control some key constitutional bodies including GECOM, the Audit Office and the judiciary. By making the Supreme Court a budget agency, the judiciary’s independence has been made subordinate to the legislative and the executive arms, bringing it under the control of the Minister of Finance. Moreover the judiciary is treated on the same basis as the regions and ministries whose financial misdeeds are legendary.

The Act seems clearly repugnant to several articles of the Constitution. Article 122 A (1) provides that the “courts and all persons presiding over the[m] shall exercise their function independently of the control and direction of any other person or authority; and shall be free and independent from political, executive and any other form of direction and control”, while Article 122 A (2) makes all courts “administratively autonomous and shall be funded by a direct charge upon the Consolidated Fund.”

When an entity like the judiciary, the Audit Office or Rights Commissions, or a payment like the public debt is funded by a charge on the Consolidated Fund it is included in the Estimates as a block sum and does not require a debate or subject to a vote by the National Assembly: Article 218. And Article 217 sets the mechanism for the payment of the sum so charged by requiring that the “moneys charged …shall be paid out of that fund by the Government of Guyana to the person or authority to whom payment is due.”

To add clarity and reinforce the court’s independence even in financial and administrative matters Article 222 A states that the expenditure shall be by way of an annual subvention. But by making the judiciary a budget agency, it now has to answer to the Finance Secretary about its affairs and is required to provide information and explanations to the National Assembly. Worse, under the Act the Finance Secretary can designate who the head of the judiciary should be for purposes of the Act!

Not that the Constitution expects a lower standard of accountability or financial management in the judiciary than it expects of budget agencies. Indeed Article 122 A (2) imposes on the courts the obligation to “operate in accordance with the principles of sound financial and administrative management”, similar standards set for budget agencies.

The questions being asked is if the judiciary, the guardian of the constitution and the protector of the citizens, can be so easily emasculated, what hope is there for the citizens? If it cannot defend itself, how will it defend them?

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Advice by the Clico liquidator for continued payment of premiums is legally questionable

In Business Page of October 3rd, 2010 I expressed the hope that those who were entrusted with powers and duties for the liquidation of Clico would ensure full compliance with the laws. For the several hundreds of persons who have so far received their cheques, the law and its processes are not important. But spare a thought for all the others who are in limbo, uncertain of their fate and funds and getting information from Mr. Lawrence Williams, the Court-appointed liquidator, that conflicts with commitments given by President Jagdeo. Let us remember that those in limbo include the NIS which is owed about six billion dollars by Clico and for which one way or the other we the taxpayers will have to bear the cost.

So far the liquidation has gone according to the script written by the President, a script that sets out a process and scheme of preference not consistent with the law. During the time, I have received many complaints and copies of correspondence and policies from persons who were told that because their policies did not have any cash surrender value they have nothing to get. There is merit in that. But what I find most uninformed, irrational and unlawful is what appears to be a circular-type letter sent by Mr. Williams to one policy holder earlier this month.

In the letter Mr. Williams identified eight types of policies sold by the company and encouraged the holders of those policies “to continue payment of premiums to avoid losing contracted benefits.” Whatever might be his intentions – and I know him well enough to know that these are well-meaning – what he is trying to do is legally questionable, unnecessary and unlikely to benefit policyholders.

The principal duty of the liquidator is to call in the assets and ascertain and pay off the liabilities of the entity. He can only carry on any business with the approval of the court.

Of the eight types of policies at least two are not susceptible to cash surrender value so his advice to pay premiums on those is ill-conceived. It would be silly for the holder of one of these policies to put further money into Clico. Find another insurance company and get another policy.

And for those policies that are so susceptible, there is no reason why any negotiations for the sale of a portfolio of policies to another insurance company – the rationale for his “encouragement” – cannot include policies that have already earned cash surrender value and those that have not. Why is he encouraging people to gamble on whether or not the belated efforts will succeed? Insurance is about covering risks, not taking a gamble.

But once again the Office of the Commissioner of Insurance that should be looking after the interest of the policy-holders and advising on technical issues has allowed itself to become a bystander.

The acting Commissioner Ms. Tracy Gibson now has taken up office at Clico, apparently appointed by Mr. Williams, along with Mr. Maurice Solomon, to carry out the liquidation on his behalf. Might I add that under section 375 of the Companies Act, Mr. Williams needed the permission of the court to make those appointments.

Unlawful action and poor supervision have played no small part in the substantial losses the country, its taxpayers and policyholders have suffered from the Clico fallout. Even if the Office of the Commissioner of Insurance makes the doubtful assumption that its obligations with respect to Clico ended with the appointment of a liquidator, the office holder should not abandon policy holders and become associated with actions that can bring the Office into question.