Pension fund chairman dithering on Golf resort investment in St Lucia

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Chairman of National Insurance Corporation (NIC), Isaac Anthony

By Caribbean News Now contributor

CASTRIES, St Lucia – The repeated failure of the government of Saint Lucia given Keynesian economic policy of conservative enablers, the theory espoused by chairman of the National Insurance Corporation (NIC) Isaac Anthony, in defence of the illogical loan and/or investment in Cabot Links Golf resort on Saint Lucia is considerable fickle to anyone with a basic knowledge of economic affairs.

At the offset, last Friday, Anthony conflated in his press statement and used inter-changeable “the loan” and “the investment” providing little understanding of the difference, and clearly, indifferent with accountability to the contributors of the pension fund.

What followed the initial alarms of the transaction has only deepened with Anthony’s long tale of woe that, “This investment opportunity was assessed by management, the investment committee, and the board of NIC, comprising persons well-trained, with considerable experience in finance, accounting, social security and business.  They have all concluded without exception, that it, poses little risk to NIC. The loan is 100 percent secured,” he said.

Pension fund investment in proposed Golf resort stirs controversy in St Lucia

A financial report is not a literary exercise, but rather an illustration of facts and figures, numbers, equations and formulation that explain (s) a figurative result. 

In fact, confused by the literary exercise of “the loan” and “the investment” kindergarten interplay, no reference was made of the NIC’s actuarial report to justify the transaction.

Instead, Anthony recited, “We appreciate that in such financial relationships, the parties and in this case the NIC and Cabot Saint Lucia are bound by confidentiality clauses and accordingly, NIC is not at liberty to disclose every single detail of the loan agreement.”

A determinization has to be made if NIC is a private financial entity or a public corporation entrusted with pensioners funds and accountable to contributors.

As to the board of directors of NIC and its decisions, Anthony proffered that, “It is an entirely autonomous body that is guided by the expertise and experience of its members… and most specifically its investment policy, based on safety, liquidity and yield.”

The average observer knows that nothing happens in the small island state of Saint Lucia, 238 square miles, 170 thousand people without the express authorization of the executive branch of government and Cabinet. And now, friends, family and foreigners.

In addition, the board of NIC is appointed and approved by the political administration. 

Anthony’s financial reporting and Keynesian economics through a literary exercise coincides with the governments ethos that is it not the people’s business, how their tax dollars and/ or pension funds are use; and as such, no logical explanation is warranted. That dialogue is multiple steps backwards and regrettable. 

Leader of the opposition Philip Pierre has stated that “If NIC wants to calm people’s fears they must provide more information about the exact nature and their involvement in the Cabot project”.

However, the advisors of the government have betrayed themselves by failing to comply with accountability and transparency expected in a thriving democracy.  Nevertheless, at this point, the ombudsperson is well placed to be called upon in defence of freedom of information and accountability, rather that operate as a ‘toothless watchdog,’ missing in action.

Anthony’s statement has none little to satisfy the ‘demand from the public for further clarification’ and un-controversial financial information about NIC’s involvement in Cabot Saint Lucia transaction, except to compound public discussion and international concerns. 

Nevertheless, treated with considerable scepticism, Anthony’s literary performance on financial matters itemised failed Keynesian economic policy as follows.

“Saint Lucia’s economy is now underpinned by the tourism industry, will in-turn benefit from additional visibility, internationally, as a differentiated tourism destination. There is also the additional benefit of the generation of employment, both during the construction phase and subsequent, with the operations of the resort itself. 

“On the issue of the investment and related to security, NIC’s involvement in the project, is by way of an EC$27.5 million loan which is approximately, 1.2 percent of NIC’s investment portfolio of EC$ 2.3 billion dollars, and I will concede that, the loan is 100 percent secured.”

Keynesian economic policy falls for the fallacy that put’s the cart before the horse, as in the horse racetrack in Vieux-Fort. Therefore, as far as economic stimulus goes; it’s a further tapping of cock and turtle fairy-tale in the basket of tourism and government expenditure on consumerism.

Needless to say, the lack of “stimulus” in the Saint Lucian economy isn’t puzzling, but a correct failure of analysis and the politically driven economy, cascades with the literary exercise that the, “Loan [ investment] is 100 percent secured and is structured in such a manner that it would cause the NIC no exposure during the currency of the loan, with a maximum repayment period of 12 years, is secured against first mortgage debenture on Cabot’s fixed assets; including over 360 acres of land, that was independently valued at approximately EC$91 million dollars in August of 2018.”

“Regarding the return on the investment; the return to NIC exceeded the average return, which is just under five percent,” Anthony reiterated:

  • The loan is fully secured, and a worst-case scenario would lead to a NIC land bank being enhanced by 360 acres of marketable land in a high-income area;
  • This loan presents absolutely no risk to the pension fund. It is a relatively insignificant amount in relation to the overall investment portfolio;
  • That islands marketability and visibility will be significantly enhanced in a very competitive global tourism market. This is expected to lead to more tourism business with the attendant benefits for the island; 
  • The interest rates are great for this loan in excess of what is currently available from banks;
  • The investment is an opportunity for NIC to earn a reasonable rate, on some of these funds with little exposure;
  • Significant local employment, will be generated both during the construction phase and beyond, allowing more citizens to participate in the NIC, thus growing the funds;
  • Tourism is the backbone of Saint Lucia’s economy and this makes it the country’s major earner of foreign exchange… is the one major area developments can have the greatest positive effect on the economy. It is imperative that we emphasize investments.

Is St Lucia’s $30 million pension fund investment in a Golf resort a-hole-in-one?

Cognizant of NIC’s responsibility to pensioners funds, the loan/ investment according to Anthony, “NIC support for this project is a developmental nature in that it will assist in growing the economy, which in turn has benefits by way of employment, and which further strengthens the fund.” 

Research indicated that investment and/or loan in companies that depend on government/taxpayers’ dollars and considerable concessionary terms, repeatedly, is not a model of development or success, but ideally is bad business. 

The notion that NIC is confident in its decision and will continue to act in the best interest of its contributors; for the benefit of us all, is wary by the overall performance of un-fulfil obligations to full and candid information to pensioners. A default would deliberately make that choice.

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2 COMMENTS

  1. You always want to open the purse for broke white foreigners. What revenue has any golf course brought. You have plans to hold major tournament? Who are you fooling?
    How come is our pension fund that is placed at risk? If the guy is an investor why can’t he face a bank in his country to get a loan? Why can’t he fund his golf course from his riches? Is his inability to finance a loan through a bank means that he is high risk? Is he in-debt or has a bad credit rating?

    I hope they put in legislation to come for people like you. You are not there to protect the pensioners but rather do what suits your political agenda. You spineless … Resign!!!

  2. Isaac Anthony has no credibility. He was a contender for the Micoud North Constituency but lost the run-off to Jeannine Compton. He is in bed with the PM and has no independence.

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