The comment below was posted by Inkwell on another blog and reposted by BU because of its relevance to the topic matter. In fact Chairman Marshall called out Boos.

 
Under a recent post (I don’t remember which), Bush Tea said he wondered what Inkwell thought of the NIS situation.
Bushie, I shuddered at the thought of the work involved in putting my thoughts into words, but I also knew I had a responsibility to make the effort. Fortunately, I have been rescued and all I need to do is reproduce the article written for Caribbean360 by Peter Boos and published on October 13th. Peter Boos speaks for me and for every Barbadian, whether they contribute to the NIS fund or not. His article makes for compelling reading and since I suspect that Barbados Underground has wider readership than Caribbean360, his views should be propagated here for the benefit of all…with David’s permission, of course.
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Is an NIS Funds Investment in Four Seasons Development Appropriate?
By Business Barbados · October 13, 2011 · No commentsBarbados Economy · Tagged: Barbados Government, Four Seasons, NIS Funds Investment

Four Seasons Private Residences – Barbados
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Having witnessed the ups and downs of the Barbados economy for 41 years it is clear that the current crisis is certainly the worst we have experienced in that time, with no easy victories in sight and lots of hard slogging and tough choices yet to be made. Importantly, the current international environment in developed economies is expected to continue for a few more years, and to be characterized by slow growth and high levels of unemployment. The October 2011 report from the Central Bank of Barbados confirms this assessment.
We can all agree that these are tough times and Government has difficult choices to make. It is the job of all citizens to help get the country back on a growth path by being more innovative, productive, competitive and confident.
Recent disclosures that the developers of the proposed Four Seasons project have made an application for financing from the NIS Fund have surprised many. Even more surprising is the indication from Government this should and will happen, seemingly as a matter of course.
No doubt there are many potential benefits of having a commercially viable, self-sustaining Four Seasons Hotel in Barbados, and few reasonably minded people in Barbados would want the project to fail just for the sake of it. This would simply not be a defensible position to take.
Nevertheless, the fact that we are in a deep long term economic recession should not lead to a relaxation of the legal and socio-economic principles governing the manner in which the NIS fund is allocated and invested. On the contrary, I am of the firm view that it is precisely in times such as these that the integrity of a fund in the nature of the NIS fund should be most jealously guarded.  The fund is not a commercial or development fund. It is a social security and pension fund, which should, for obvious reasons, be invested on a conservative basis to meet long-term liabilities.
Some may recall that CLICO failed essentially because it strayed from sound investment management practices as mandated in the law under insurance regulations, and took on several speculative investments, which eventually it could not support financially. Looked at objectively CLICO and the NIS have something very important in common: CLICO derived and the NIS derives large volumes of cash from insurance premiums, pension contributions, investment income etc. As a corollary to that, the people whose money was held by CLICO and is held by the NIS were/are depending on receiving the benefit of those funds. In many cases those funds are the only savings and retirement planning provision made by such people.
Against this background some important questions arise on the appropriate use of NIS Funds by Government.
Appropriate NIS Funds Investment
How should NIS Funds be invested? What are the Guidelines for NIS Funds investment and who sets them? What are the powers of any Government to mandate how these Funds may be invested?
Recent announcements indicate that almost 70% of NIS Funds are lent to Government. On what terms does the Government borrow these funds from the people? Sovereign debt crises in Europe and the USA should be sufficient warning for Barbadians that Governments too can default. At the end of the day, it is the taxpayers who have to make good any shortfalls, and it is they who are at risk if their future social security needs cannot be met.
In the recent 2011 Budget presentation [concerning] Government’s Proposed Strategy to Reduce the Deficit in Line with the Medium Term Fiscal Strategy (MTFS) the following statement was included:
“Designing of a borrowing package from the NIB to three statutory entities (UWI, Transport Board, BTA and Needhams Holdings ltd) to allow for financing of $110 million during the course of this financial year for specific aspects of their programme. This will address the level of current transfers made to these entities from government but allow for greater flexibility to do more to stimulate the economy.  Servicing of this debt will however be provided for, where necessary in the Consolidated Fund”.
Is it appropriate for Government to essentially use NIS Funds as a bank for its funding needs? The precedent set in 2011 is a very dangerous one. This is essentially window-dressing so that our debt to GDP ratio and fiscal deficit are artificially made to look better in order to satisfy the rating agencies and other interested International Agencies.
NIS Funds Investments – What are they?
We do not have published information on any of the investments held by the NIS at this time. Why not? These Funds belong to the people. It should be remembered, at all times, that the people do not have the freedom to consider all of their financial planning options and, if they like, choose to allocate some of their money to the NIS, on the basis that the NIS is the best, safest or most rewarding investment. Not at all. The people and their employers are obliged by law to make monthly contributions to the NIS Fund. Ironically, in the world of optional investments, one can examine a plethora of information about a prospective investment, before deciding whether or not to invest. In the case of the NIS, to which payments are mandated by law, the reality is that no meaningful information has been provided to the people for a number of years.
Looking at the deployment of NIS funds into  the range of possible investments as desirable as it is to have a Four Seasons Hotel in Barbados, should NIS Funds be invested in that way?
There are many other equally pressing national economic needs. Innovative solutions for the south coast tourism product, food security, expanded broadband connectivity, alternative renewable energy, niche manufacturing, economic diversification for exports (e.g. international medical services, arts/culture, international education services etc). So why the Four Seasons? Is this the role of the NIS? Is the NIS now to be a development bank with all the associated risks?
The CLICO failure is primarily as a result of speculative, risky investments of policy holders’ funds.  Many people have lost their entire investments and pensions, and the Barbadian taxpayers may yet have to carry the burden of its [shocking demise]. Consequently, the climate is such that there is widespread fear and concern that the NIS fund, which seems to be the only substantial fund left in the country, and which is a public pension and social security fund, may be risked as well.
We should not invest scarce national savings managed by Trustees on behalf of the people in a way that is not within the NIS mandate, without open and full disclosure, within published and approved investment guidelines and subject  to management according to rigorous governance procedures.
The fiduciary responsibility of the Board of the NIS [includes the obligation to] invest the funds they manage, on behalf of the contributors, [in a manner which will] ensure stability of its investment portfolio for the long term to meet its future pension liabilities to contributors and other beneficiaries.
I am informed that the NIS manages $3 billion in assets and has surpluses of $30M a month; and some are aggrieved that the commercial banks take advantage of this by offering low returns on deposits. However, given the current economic climate, it cannot be expected that returns will be generous. This much is clear and acceptable.  To swing to the other side of the spectrum and posit that NIS funds should be invested in risky real estate developments, in the absence of the highest level of scrutiny must be a breach of fiduciary duties owed to the people of Barbados. Given the nature of the fund, the investments would be safer with the commercial banks since the principal would be safe. The assertion that the NIS fund is in surplus does not, in the absence of meaningful disclosures as to the state of the NIS fund, justify investment in risky ventures.
Is this a Fronting Arrangement?
Indeed in the circumstances it is understandable that people are asking: is this proposed investment not just another way of NIS lending money to Government through a ‘fronting arrangement’ to pursue its development agenda? If it is, then the investment should be categorized as such. At least then the investment would be a Sovereign Liability and of potentially greater value to NIS beneficiaries. Should the investment fail, what then? Unless the Government is willing to issue a guarantee to the people in respect of this use of the NIS fund, there is no acceptable answer to this question.
Management and use of NIS Funds should be separate and distinct from Government’s funding needs. This really is the issue. Does Government determine the investment policy and choices of the NIS? Does it have the authority to do so under the law? More and more we see Government essentially regarding the NIS as a source of funds to finance Government’s operations. This is a dangerous course because even the wisest, most well-intentioned of Governments is not infallible.
The public have become increasingly concerned in the past year or two about this, and the current Four Seasons proposal is a cause of deep concern for many stakeholders.
The argument in favour of an NIS funds investment of this project is that, in these recessionary times, Government has to support development projects in order for them to gain impetus. However, Government support is one thing, while, given the social security nature of the NIS fund, expending it for the proposed purposes is quite another. Put another way, Government support for a project should not automatically translate into depleting the NIS fund simply because this is the only source of real cash remaining.
Full Disclosure is Imperative
The people of Barbados are the owners of the NIS fund. As such they are they entitled to full disclosure including:
most recent unaudited financial statements (to 30 June 2011 would be acceptable)
2010 audited financial statements as soon as possible.
access to most recent approved audited financial statements.
current list of the components of the investment portfolio totaling $3 billion.
the investment guidelines of the NIS Fund.
the governance policies of the NIS Board.
the powers of the Minister of Finance as regards NIS investments.
Once these disclosures are made, the proposed NIS funds investment in the Four Seasons project can be fully and fairly evaluated.
The writer is not opposed in principle to that project or to investment in it, if the project is viable and the investment is structured in a fashion that will not put every Barbadian taxpayer at risk of having to “pick up the pieces” if things fall apart. The writer also does not advocate the disclosures highlighted idly or out of mischief. Indeed one of the reasons why the disclosures would be so welcome is because while the reality is that there may be nothing to hide or obfuscate, the prevailing absence of total transparency creates the impression, bewildering to the country, that there must be something to hide. Dispelling these fears through full and ready disclosure would give people more comfort in the context of the investment of their life savings into development projects generally; and an understanding of how this particular investment into the Four Seasons would be structured, especially as regards protection of the people’s funds and mitigation of their risk, would help to persuade us all that it is in fact a compelling investment, which serves the best interests of the people who have worked so hard to generate the NIS fund.
 

Is Chairman Marshall saying all decisions made by his Board and others before him have not been influenced by ministers and prime ministers? BU say bullshit!

@ David:
I told you the the marshal is phoney! All that high-sounding mouthing off on the talk show is just to boost his popularity and not genuinely coming from his heart. He would put deputy dawg in the shade anytime.! I wonder if he is including his predecessor Mr. Physical Deficit (an ex-clico gopher)!

Some posters here beginning to mirror BFP they wishing and hoping for Barbados to collapse. Question is then what?
Peter Boos has resurfaced with the same doomsday crap he came with in the Sandiford era.
These white foreigners come here live large in the bigoted ranks of their soul mates the local white elites and attack every move black Barbadians make.

Can we assume Chairman Marshall is speaking for all members of the board?

NOthing shocks me; You said above “The statement says absolutely nothing. Nothing.”
Not true. It gave a fairly clear explanation of the relevant NIS’ functions and the safeguards mandated by legislation. However, It did not address in any way the concerns raised by Boos, the BU family and indeed, the majority of Barbados’ pensioners. Most pensioners in Barbados are appalled by the apparent use of the NIS as a government piggy bank despite the safeguards alluded to by the Chairman. The statement did not address this in any substantive way but merely sought to suggest that the NIS and the NIB which follows the policy set by the Minister of Finance are legally exampt from political interference. That is obviously not so and there are many clear examples of why that could not be so. Indeed, Caswell and David and others have pointed to clear examples of why the statement is disingenuous at best but most likely utterly misleading since NIS funds were used for projects of little national but presumably high political importance.
Mr Marshal did not succeed in allaying any of the fears of the typical pensioner about the use of NIS funds. He needs to wheel and come again.

@ Buffalo soldier:
“These white foreigners come here live large in the bigoted ranks of their soul mates the local white elites and attack every move black Barbadians make.”
No need to bring race into the discussions.
Focus your attacks / criticisms at what Mr. Boos is positing. Are his assessment and conclusions that far off as to be totally dismissed out of hand or do they have some merit worth serious analysis and debate?

I for one am not comforted with the statement from the Chairman of the NIS, in fact I find it even more scary to actually see confirmation that the ‘financial books’ or so to speak have only been updated to 2005. How can you be spending money that you don’t know for certain that you have??

What does Minister Esther Byer-Suckoo has to say about everything that has been happening in her portfolio.

Does she have a tongur or has she delegated to Chairman Marshall and Ministers Sinckler and Kellman?

@Checkit-out
Ok, you are right, it does outline the duties and responsibilites of the NIS. I did mean that it did not address Boos’s remarks. We are on the same page.

Mr. Marshall in your response to The public. You keep reminding the public about the sound portfolio of the NIS. How about showing full proof to the public by releasing said documentation through media. Doesn’t the public have a Right to see such documentation. Why should the public believe you or any one else after all it is the taxpayers money and not yours or anybody else’s. It really behooves me to see how those in government play free and loose with money that is entrusted to them by the working stiff and when asked upon to show any proof or records all “Hell Breaks” loose upon those who dare would differ or ask.Mr . Marshall the time has come for you to act fair and decent with the public it is not good enough for you to send out a selserving letter and think it would be sufficient to quell the public’s fears. What is your agenda Mr. Marshall ! Whose side are you on. It is time to show and not only tell.

David
Please forgive me for any grammatical or spelling errors, however this is typical of the said Company’s print medium

IS Marshall a snob ?
DID I asked this question before?
IS it true that persons who get what they didnt expect or didnt think would get are the biggest snobs ??
IS it true that SNOBS dont care bout a fella unlesss that fella is more powerful or can dish out largesse ????
IS former moderator Maureen Holder a SNOB ?
IS Freundel a SNOB in sheep’s clothing ???
IS Ian Estwick a SNOB ???

Just asking asked “WHAT de ass we waiting for ??”

We waiting to “OCCUPY” Bay Street or Broad Street, or River Road or the Pine, or the lodge meeting houses wherever it is the rascals and banksters hang out.

Random Thoughts
The irony of it all is, after these places are built, you and I and all the others who contributed to its completion, can’t even get pass the
gated entry” Like we building a NEW SOUTH AFRICA

CANT we unsderstand that the stupid experiment of 2008 is over ???
CANT we understand that this is made worse by Sinckler not becoming Prime Minister of Barbados in 2010 ???
CANT we understand that if it aint Sinckler , it should be Owen Arthur ????
CANT we understand that a leader should inspire , demonstrate vision and motivate people ???
OWEN Owen Owen -Could you Please help us?

To Scout:
I share your frustration; how many inquiries have we had and not a politician or his friend lock up. People in barbados shall find it difficult to move to a third party; they have too much time and expectations invested in either party. Carson Cadogan would have to return overseas if the BLP got in and look for work. He is simply would not be interested unless the other party warms up to him. Bajan politics is about what you can get when your party is in power. This why the rank and file are thrown to the curb as soon as their party gains power. We have ourselves in a big political mess, and the joke about it is that many of the country’s true leaders are looking on in amazement. Many are blogging here on BU. I may cuss Island Gal at times but she would do a better job than most of them.

The bad news is that the alternative to Government spending the NIS money is that we will then have to live within our means. That means some serious cutbacks – especially as we have years of extravagance to pay back. There are few Santa Clauses left out there who are willing to continue to give us money to live beyond our means…so this means..
……..layoffs, cutbacks, import restrictions, etc

The good news is… We may as well let them spend the NIS money to buy us a few more months of fooling ourselves that we deserve the lifestyles that we enjoy…
…cause NIS or not, the dog dying – as so is “Granny Earth”.

.

Hmmmmmnnn……A non believer like me? Friends…….???? NAH

My my, Marsh at his non-committal best … “publication of up to date accounts by the end of 2011 or as soon there after as possible” … Brilliant! We could still be waiting for another 10 years and Marsh would not have told an untruth …. ha ha ha ha …

I have a problem with Peter Boos.
I can remember Peter Boos being very vocal against the Sandiford government back in the early 90s. He is not impartial. How come he never asked for financial reports of the NIS between 2002 and 2008?
How come when the banks put on all of those charges on poor Barbadians you did not hear him complaining? Now he wants the NIS to put the money in the Banks?

The NIS should put the money in the credit Union so that they can start a bank for the poor people of Barbados.

Scout
VOB already have Patrick Hoyos as the BLP moderator

@Hants

Is it wise to build Luxury houses today. Are we confident that the world economy will return to pre 2008 levels of prosperity?

There is a huge risk that these multi million dollar properties could become white elephants or have to be sold at a loss.

Private Investors should take the risks on this project.

This is a good point.

I think I am missing something here … But who do the Credit Unions bank with again?

@Trained Economist

These are harsh economic times and there will be more question now than in times of plenty, deal with it!

@Trained Economist

It seems the public has a problem with NIS funds being used for 4Cs.

Which other projects the public has been as harsh?