Gov’t/NIS activities (2011-2021) — call them by the numbers

By Observer
As indicated in our previous piece, we bring you similar details of the activities between government and the NIS in the context of the public discussion surrounding the state of the NIS and what possibly contributed to its state. In this regard, the information that follows is derived from the records of the Parliament for the years 2011 to 2021 — where available.

2011 – Budget debate and other sessions

• Jan. 24 (Budget Address): Government sold majority shares in NCB; 51% sold to “Caribbean Financial Holding Company Ltd. of St. Lucia for a consideration of $42 million”; “National Insurance — 5%”
• Jan. 25 (Eustace Budget response): “We had the luxury, Mr. Speaker, over many years of being able to approach the NCB as owners, as owners with the Board of Directors appointed by Governments and to get almost everything we want. That is not so anymore, Mr. Speaker, and therefore the Government will have to seek some alternative sources of domestic financing and the NIS being sound actuarially be one of those sources, but I want to say to the people of St. Vincent and the Grenadines in that regard, watch your NIS. The money is not Government’s money, it is the people’s money and it should be used for purposes as set out in the agreement…I also wish to point out Mr. Speaker, that the National Properties loan owed to the NIS which was $47 million in 2009 is now shown as $51 million in 2010 which suggests to me, Mr. Speaker, that loan is not being paid.”
  “Mr. Speaker, the return that the NIS would have gotten on that $62 million [CLICO investment] per year is just under $5 million. They are now, not now, they have already lost it for a year or so…”
• May 24 (Gonsalves responds to question from opposition MP Godwin Friday on airport terminal construction delays): “… The National Insurance Services Building cost about $20 million to build and equip…The contractors in St. Vincent and the Grenadines delivered it to us two years after the time, now I would say that we are going pretty well at the airport…”
• Aug. 11: Gonsalves responding to a question asked by Eustace on the source of funds (an average $368,572 per month) for paying a “stipend” for the Cuban engineers at the airport since Venezuela had not yet reimbursed this amount, that it supposedly had agreed to pay.  “…last year we give them monies from as I said from the bank, the sale of the bank the 51% of the shares and we have money in the estimates this year. In fact, when we sell…, we have sold the 9% of the shares to NIS and the workers at the same 823 a share as we sold the St Lucian bank…”
• Dec. 13 (Eustace 2012 estimates debate): “I have taken note to the fact, Mr. Speaker, that the profits of the National Insurance Scheme has fallen from $27 million in 2008 to $5.6 million 2010 and therefore I am expecting from the Prime Minister action in relation to this matter…”

2012 – Budget debate, and other sessions

• Jan. 9 (Budget): “Indeed, in January 2011, my government increased by at least 25% the value of the monthly public assistance payments and widened the net of recipients of non-contributory payments through the NIS… the NIS makes payments fortnightly to roughly 1,500 non-contributory poor persons under the NAAP and the EAP.”
  “The latest actuarial report suggests that under plausible assumptions, the NIS Reserves could be depleted by 2039 and benefits and administrative expenses will exceed income as early as 2025”
  “Thus far, the contribution of the government and public enterprises to the international airport project is as follows: Land Sales, EC$26 million; Grants from the Government totalling EC$48.5 million (EC$13.5 million from first ALBA Loan; EC$15 million from second ALBA Loan; $20 million from the sale of the 51% share of NCB); NIS loan of EC$40 million, well-secured by lands transferred from IADC to NPL, and guaranteed by the Government; EC$30 million from First Caribbean International Bank (FCIB) to IADC, on which $6 million remains outstanding to be paid by July 20, 2012; and EC$31 million in soft loans from Petro Caribe to IADC, $2 million of which has been repaid by IADC, thus far.”
  
  “In St. Vincent and the Grenadines, the [CLICO] exposure is in excess of EC$375 million or some 20% of this country‘s gross domestic product (GDP). Individual policy-holders, companies, banks, credit unions, and the National Insurance Services have taken severe losses, thus far.”
• May 31: NIS buys $5 million of government bonds, issued on the regional market. PM Gonsalves responding to question from Eustace: “…the National Insurance Services were wise to buy $5 million because they get 7.5% interest from a government, which pays its debts”.
• Dec. 4(2013 Estimates debate): Government owes Vinlec and NIS $30 Million? MP Leacock: “…this year for the first time I am observing a resolution: “Be it further resolved this Honourable House do authorise the Minister of Finance to raise a bond for a sum not exceeding $30 million to pay outstanding amounts due to VINLEC and the NIS.” “What are you saying government owes NIS?”
  Gonsalves responds in wrap-up: “the sums owed to VINLEC and the NIS is much less than $30 million but this relates principally to paying outstanding amounts to them. Mr. Speaker, the bulk of the money which we owe to VINLEC is something in the region about $16 million and it is largely for the street lights. Every year we have about $6 million to pay for street lights it is a very expensive matter so what we intend to do and a much smaller sum in relation to some outstanding monies for the NIS in terms of retiring contributions.”
  “… In 2011 rather than giving the public servants any increase I gave a 25-27% increase in the payments made to the poor the 6,000 persons on public assistance, now all this is taking place at the time of crisis you know. We created another group of people up at NIS, Non-Contributory called the Elderly Assistant Benefit there are several hundred of them to go along with the NAP, every single fortnight they would get a $75, Non-Contributory $150. Those for the public assistance of course you know it is two hundred and something and then $225.”

2013 – Budget address

• “Further, public enterprises, especially CWSA, VINLEC, the National Insurance Services, and the National Lotteries Authority address poverty reduction within the context of the overall policies of government.”

2014 – Budget address Presented in January 2014

• “In St. Vincent and the Grenadines, the National Insurance Services has been severely impacted, mainly through declining investment income and profits. Indeed, Net Income for the NIS has declined from $27.12 million in 2008 to an annual average of $9.33 million for the three-year period 2010 to 2012. Contributing to this declining performance, too, is the rapid increase in Benefits Cost as the number of pensioners and the value of pensions, rise.”

2015 – Budget address Presented in January 2015

• “The NIS also plans to develop a property at Murray’s Road, formerly belonging to Sir Cuthbert Woodroofe, which it purchased last year to house offices for rental.”
• “…complete the infrastructural development of the lands at Peter’s Hope for a project involving 105 housing lots ranging from 5,800 square feet to 10,800 square feet.”
• “In the later part of 2014 we passed an Act in the Honourable House to permit the Government to borrow up to $15 million from the National Insurance Services (NIS) in order to finance its arrears of contributions to that organisation. There was a similar arrangement in 2013 which allowed the Government to reduce its arrears to both the NIS and Vinlec”. “Of the new bonds issued, $15.0m was issued to the N.I.S to liquidate arrears in contributions due by Central Government to the NIS.”

2016 – Budget address presented in January 2016

• “The NIS and the Government Employees Cooperative Credit Union (GECCU) are engaged in a joint venture to pursue a housing and commercial development on some 65 acres of land at Peter’s Hope …The NIS is developing 102 lots of land, ranging from between 5,785 square feet to 11,657 square feet; and GECCU is involved in developing 142 lots. Phase I of the project, the construction of a spine road, and drains, was completed in 2015 at a cost of $1.6 million. Phase II commences in March 2016 with further infrastructural work scheduled to be completed in July 2017, at an estimated cost of $3.1 million.”
• Domestic public debt increase: “…the increase in the domestic portion is as a result of disbursement on new loans by the National Lotteries Authority and the National Student Loans Company from the National Insurance Services …”

2017 – Budget address Presented in January 2017

• “… Substantial public sector investments are to be made by several State enterprises including VINLEC, CWSA, NIS, National Properties Limited, and the SVG Port Authority.”
• “The NIS also, in 2017, will proceed further with its involvement in three local real estate initiatives. The first concerns the second phase development of the 249 housing lots at Peter’s Hope which will unfold in 2017. On this GECCU and the NIS would be engaging suitably qualified professionals to build the internal roads and drains at an estimated cost of $8.9 million, scheduled for completion by June 2018. The pursuance by the NIS of the development of the Patcon Property at Richmond Hill and the JU-C property into state-of-the-art commercial sites are its two other property-related initiatives.”

2018 – Budget address – No transactional information, except report on the health of the NIS; contributions, reforms, etc.
2019 – Budget address

• Hotel at Diamond: “At Diamond, the Government will construct a 93-room facility that will take advantage of its status as the closest hotel to the Argyle International Airport. That facility, to be constructed with support of the CARICOM Development Fund and investment from our National Insurance Services.”

2020 – Budget address

• “A further 61 students received $3.3 million in student loans last year through the Economically-Disadvantaged Student Loan Programme of the National Insurance Services. The NIS’ total active student loan portfolio now spans 550 students and $28.3 million.”
• “As discussed elsewhere, the 2020 capital programme of the NIS includes $3.2 million worth of land development at Peter’s Hope and the $2.5 million commercial development of Ju-C property in Kingstown.”
• “Further, the NIS will spend $1.8 million in 2020 to establish an office in Union Island”
• “The NIS earmarked around $20 million to invest locally in wealth and job creating projects.”
• “The NIS intends to establish a service centre in Canouan in 2020.”

2021 – Budget address

• “In an effort to secure economic stabilisation and promote inclusive growth, the NIS repatriated $20 million to infuse liquidity in the local financial market. The NIS placed the funds into various deposits across local licensed financial institutions and credit unions. The cash injection served as a liquidity buffer to the local financial systems when banks and credit unions offered relief to customers, including moratoriums on loans.”

We tried to be as concise as we possibly can, to give you enough context while trying to avoid information overload. The exchanges in the Parliament then, make for interesting read now. When Eustace made the point that he predicted retirement age would reach 65, and Senator Francis interjected that he (Eustace) was still fit at that age, is an example of such exchange. When Representative Leacock explained how National Properties racked up a loan portfolio of $76 million, with some from the NIS, is also another example. We also wanted to lament and ask the question of how did NIS and GECCU come to own lands at Peter’s Hope? Our intention here, again, was to present the second half to what we presented in our previous piece, in the context of the public discourse surrounding the state of the NIS.

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