Ramsaroop predicts trouble for cash-strapped NIS

…as impact from closure of sugar industry begins to take toll

The National Insurance Scheme (NIS) is the next large-scale institution in Guyana that will “go belly up” – a direct result of the current management of the Guyana Sugar Corporation (GuySuCo), which for all intents and purposes is being sold off.
This dire prediction was outlined by Economic Advisor to the Opposition, Dr Peter Ramsaroop.
“The President or his Finance Minister clearly did not think through the long-term impact of shutting down an entire industry placing thousands on the breadline at the same time.”
According to Dr Ramsaroop, “NIS is already in trouble, no way near to being a fiscally solid institution with its expenditure outstripping revenue in recent years along with some bad investments.”

He explained that the institution currently spends more than it earns and has had to regularly tap into its reserves to make basic payments. “So, I am extremely worried that when the euphoria of the part severance payment wears off and life sets in, what the long-term economic effects will be.”
Dr Ramsaroop said the prevailing social circumstances were ripe for a large number of the laid-off sugar workers and their dependent family members in the near future – say three to five years – to make claims on the NIS, since they are of the belief that their contributions would have been made by GuySuCo.
“Remember, we are talking about medical benefits that these now sick and unemployed sugar workers will be looking to claim,” the financial analyst said, as he predicted widespread chaos in the near future when thousands of workers turn up to NIS only to realise they have “nothing to get”.
He told this newspaper, based on available data, GuySuCo owes NIS in excess of G$1.5 billion in contributions from sugar workers.
This, Dr Ramsaroop noted, is compounded by the fact that GuySuCo would have been deducting as statutory payments NIS contributions but never actually making payments – something that ought to be criminal if not already in the statute books.
“Imagine you are a sugar worker who has been toiling in the sun for 30 years and every fortnight or month GuySuCo takes out a certain sum from your salary to go towards NIS, so that in the future when you become sick and the decades of working the cane fields begin to take effect and you turn up to NIS only to be told there are no contributions.”
The advisor told this publication it was inconceivable that the Finance Minister could not have known of this repercussion.
“Why do you think the PPP (People’s Progressive Party) continued to subsidise the industry … it is not about votes, the then Finance Minister (Ashni Singh) and the then Presidents understood the implication of shutting down that industry and its ripple effect on the other industries nationwide. The goal was to diversify the industry to expand value added chain. Sugar on its own was in trouble, sugar cane as high-end crystals, energy source to the national grid, ethanol production and other diversification as proposed for this five-year period by the PPP would have seen Guyana growing more sugar cane not shutting down an entire industry,” Dr Ramsaroop said.
He questioned what the real state of affairs was at NIS, since that organisation according to recent reports was being buoyed only by its investment in the Berbice Bridge – an investment that was roundly criticised by those now in high offices and in charge of the management of the national economy, Dr Ramsaroop reminded.
The economic advisor to the Opposition noted that Finance Minister Winston Jordan has “time and time again demonstrated he has no clue as to what is happening in his Ministry and the knock-on consequences of their ad-hoc decision making which continues.”
Dr Ramsaroop added, “One only has to look at the raft of measures that they had put in place only to have them removed when the people cried out and they realised that it was making things worse, think of the VAT on education which had to be removed, think about the tributors’ tax on miners which had to be revisited.”