Arthur: CLICO bailout could be a debt trap

A former Prime Minister has applauded Government for trying to resolve the near decade-old CLICO collapse, but has warned the Freundel Stuart administration that it might be creating an explosive debt problem for the country in the process.

Owen Arthur, who served as the country’s leader and Minister of Finance for 14 years, issued the caution this evening as the House of Assembly debated the CLICO International Life Insurance Company Limited resolution.

The former Barbados Labour Party leader, who currently sits as an independent in the House, cautioned that Barbados exposed itself to monumental risks by taking on the debt of private companies when it already faced significant challenges as one of the most highly indebted nations in the region.

He pointed to two fellow Caribbean Community countries, explaining that the debt situation had exploded in St Kitts after the government assumed responsibility for the collapsed sugar industry and in Jamaica after the state took over the liabilities of the financial sector.

“CLICO Holdings Limited was not a regulated company, the insurance company was regulated, and we are in this problem from which we ought to learn,” Arthur cautioned, while acknowledging that “there were things that were done in this country and elsewhere . . . that have put us in a situation of difficulty”.

“We need to solve the CLICO problem, but are you doing the right thing in the right way? Was there a recent valuation of the assets and are the assets you are putting into the statutory fund of the nature that will give the Minister the assurance that what caused the statutory fund deficit in the first instance will not come back to haunt you?” he asked.

Moreover, the economist stressed the already precarious debt situation facing the island, as Government sought approval to create and finance new companies to manage the assets of the former CL Financial insurance subsidiary.

“We are this evening helping to create a guaranteed debt for a Government that already has debt that is too large.

“Some of the assets of the company that is being created have been non-performing in recent times. . . .[And] as we seek to grapple with a debt problem that will overwhelm the future of our children and grandchildren, we are now adding to it by creating a company that has assets that are so badly impaired that the very problem you are seeking to solve – mainly a deficit in the statutory funds – could come back to haunt us,” Arthur warned.

In his contribution, the St Peter MP stoutly defended his actions as Minister of Finance, insisting that he could not be blamed for what had happened leading to the collapse of CLICO International Life Insurance Company.

He rejected as a “myth” that he could have done something to prevent CLICO’s demise.

“The Minister of Finance cannot get involved in the operational affairs of a supervised and regulated company like CLICO and it is time that [we end] this nonsense[talk] that the Labour Party could have intervened and stopped it.

“It could only have done that at the expense of breaking the law,” he argued.

30 Responses to Arthur: CLICO bailout could be a debt trap

  1. Almar H Cave
    Almar H Cave December 8, 2017 at 10:00 pm

    My question is simple….. Since the creation of this new body is going to be a problem and incur even more debt.. why are the ministers sitting still in parliament saying nothing? This is total madness…. You telling me that we are going into this again? Cha…. Man

    Reply
  2. Eddy Murray
    Eddy Murray December 8, 2017 at 10:34 pm

    blind leading the blind so what you all expect any thing different from the minister. This will be another short live plan as well.

    Reply
  3. Heather Cole
    Heather Cole December 9, 2017 at 1:26 am

    I do not know where the government is getting the money from to make this new entity functional. Are they going to take out a loan of $300 Million at an enormous rate of interest? It is simply ridiculous.
    The government does not have money to fix the sewage treatment system, to fix the roads, there are no trucks to pick up garbage and the public transportation is in need of an overhaul, citizens have not received their income tax refunds, there is foreign exchange to purchase about 8 weeks supply of food on the island and instead of fixing any of these things, the Minister of Finance makes it his priority to bail out a private company.
    If there will be an exchange of Clico’s land for injection of public funds, I could understand that but this is not what is happening here.
    The Minister of Finance care more about Clico that the people of Barbados. He is only using the people to accomplish his agenda; whatever that is.

    Reply
    • Charming Forde
      Charming Forde December 9, 2017 at 8:59 am

      The money was already set aside in the estimates, they are not now trying to find it.

      Reply
    • Ali Baba
      Ali Baba December 9, 2017 at 10:34 am

      ESTIMATES MY ASS…..PEOPLE SHOULD HAVE GONE TO JAIL,FOR THE POLICY HOLDERS MONIES, ALL THE ASSETS SEIZE WHERE EVER THERE ARE SOLD OFF TO HELP PAY THE PEOPLE……

      Reply
    • Gregory December 9, 2017 at 2:43 pm

      I’m not from Barbados (from the UK) just following the news there.
      I understand you post; but what about the people that lost their money, life savings in some cases I believe. The government should be looking to reimburse them.
      IMHO

      Reply
    • Gregory December 9, 2017 at 2:44 pm

      I’m not from Barbados (from the UK) just following the news there.
      I understand you post; but what about the people that lost their money, life savings in some cases I believe. The government should be looking to reimburse them.
      IMHO

      Reply
  4. hcalndre December 9, 2017 at 3:55 am

    @MOFailure, where were you when Arthur sound the warning that Clico was in trouble and they should cease with the Ponzi Scheme and the deceased PM did nothing saying that Clico were in the good hands of his friend and his law office.

    Reply
  5. Ali Baba
    Ali Baba December 9, 2017 at 4:27 am

    hill billy what is there to applaude? where the 91 mil gonna come from?….see the lives u all turn upside down, through greed, covering up, because of the stench in high places will come to zero one day…1 day as ah 1000 years and ah 1000 years as 1 day……remember in the day of reckoning wanna can’t bribe GOD with nothing psalms 49 explains it clearly

    Reply
  6. Bajan boy December 9, 2017 at 4:51 am

    That is simply pre election talk. Now we know the actions will defenitely be called in February..He has been promising as usual no results.

    Reply
  7. Johnathan December 9, 2017 at 5:04 am

    Owen you know Chris nor Freundel dont care once Demain the electio s and our country goes further down.You still want them to win despite their incompetence and ineptness.Bajans are however a little more literate cun# like you..

    Reply
  8. Blak Envadr l December 9, 2017 at 5:11 am

    Boy as a taxpaying bajan I am vehemently against this CLICO bail out. Agents approached me also but I always exercise care with my hard earned monies. That is too much debt for us. Investments have risk. Sometimes you win, sometimes you loose.. They lost on a gamble. Don’t come to us who were careful to bail out the reckless and greedy
    Black Invader

    Reply
  9. Lynda Bonnett
    Lynda Bonnett December 9, 2017 at 5:55 am

    I don’t know how Bajans could have voted dlp twice into power

    Reply
    • Deborah King
      Deborah King December 9, 2017 at 6:15 am

      Lynda Bonnett,,u r asking how bajans could elect the DLP twice,I ask myself how they could have ever elected them once.Fumble we r going to kick your asses out,get ready start packing,DEM GOT TO GO,SEWAGE STINKERS.

      Reply
    • Joy Waldron
      Joy Waldron December 9, 2017 at 10:26 am

      Cause gifts at time was sweet for moment … now suffering make them remember first 5 yrs …

      Reply
  10. Alex Alleyne December 9, 2017 at 7:03 am

    Just making sure the next party in office got their hands full.

    Reply
  11. Rickie Nurse December 9, 2017 at 7:23 am

    Only here in Barbados will this deliberate wickedness be allowed to continue and gain roots. No money to fix the rediculous road neckwork, no money to fix the rediculous and embarrassing South Coast sewage problem, but they can now find an impossible way to source money to try to appease the policyholders of Clico by making them believe all will be well, when they know for an absolute certainty that this proposed debt will further cripple our already paralyzed economy and I am not to believe that this is the height of absolute madness by Freundel, Chris and this goon squad of a government?

    This is my suggestion to this Clico debacle, the financial assets of that has been freezed from the ex Clico boss be immediately turned over and used to repay the policyholders that he deceived and tricked. The other assets such as lands be immediately auctioned and those moneys be also used to further repay the policyholders. The beneficiaries of the alleged arrangement between the ex Clico boss and the deceased Prime Minister and the Law firm involved should have ALL of their assets seized and auctioned to further repay the policyholders and the remainder used to service the UWI debt that government owes it.

    I am calling again for the prosecution of the ex Clico boss and all the other accomplices be there alive or dead, it is more than high time that the so-called high and prominent criminals be brought before the Law Courts and be found guilty as charged and imprisoned. Then and only then will justice be seen as truly being served.

    Reply
  12. Jerry December 9, 2017 at 7:41 am

    This looks like another disastrous use of public funds ( more debt) to bail out a private company like the national disgrace that is the Four Seasons Using NIS funds. Like the NSRL taking taxes of 300 million from the job creating Private Sector transferring it to the Non Productive Money Loosing Sector that is the Public Service and Statuary Corporations.The IMF and threat of devaluation of the Barbados Dollar get closer. Tough decisions need to be made or like Jamaica and Guyana there could be 35 years of pain

    Reply
  13. Helen Juanita Lynch December 9, 2017 at 8:31 am

    Did not our Prime Minister the Right Honourable Freundel Stuart say of Leroy Parris of CLICO “the man is not a leper. He is my friend”

    Isn’t it always a god thing to be a Prime Ministerial friend?

    Reply
  14. Adrian Allison
    Adrian Allison December 9, 2017 at 10:42 am

    Why is this DLP administration looking to take on a debt of a private company ?
    Is it some form of payback to a company which is well known to have bankrolled previous political campaigns of this political party ?
    Is this political party trying to paint some attractive public relations picture to the people of this country about a company that paid millions to the law practice of former Prime Minister David Thompson while mismanaged policy holders accounts ?
    Is this Demoratic Labour Party after bringing this country close to financial ruin now seek to further burden the taxpayers of this country with their former benefactor’s debt, a benefactor that has raked in millions annually from the people of the region ?
    Why does Leroy Parris seem immune from prosecution for his part in the collapse of CLICO and can walk away with millions of dollars while we the taxpayers are expected to find funds to compensate former policy holders ?
    This CLICO/DLP cover up needs to be investigated so that we the taxpayers wouldn’t end up holding the bag for these criminals and criminal politicians.
    The BLP and all these other new parties need to highlight these misdeeds so Barbadians will know the stakes in the upcoming elections and can make a well informed choice.

    Reply
  15. Sherlene Phillips
    Sherlene Phillips December 9, 2017 at 11:07 am

    Very very bad idea…dem want to bankrupt the whole country….oh my God!

    Reply
  16. Mack December 9, 2017 at 12:01 pm

    The people of Barbados certainly are not paying attention to what this Government is doing in their name.
    Assets are being given away or sold at pennies on the dollar. to their friends.
    Cleico debt is now being taken over. Why not sell of the lands and other assets of Cleico and settle with their debtors.????????????

    Reply
  17. Mack December 9, 2017 at 12:08 pm

    It might be a good idea to CLAWBACK some of the money that was taken out of CLEICO illegally.
    Use it to settle some of this debt. Too much responsibilities being placed on the backs of tax payers for something they are not responsible for.

    Reply
  18. RRM December 9, 2017 at 12:45 pm

    It is alledged that 2 government ministers & a business man want to buy up the clico plantation yards, knock down the buildings and build town houses & apartments

    Reply
  19. Helicopter(8P) December 9, 2017 at 2:13 pm

    Research ! Research into the Offshore operations of these businesses and their directors. Performance data and holding assest are to be investigated as a fine toothcomb. The days are gone when an off-shore company says; I’ve got the clout! Investigate and place measures into account. These companies are looking for fast, new markets, with cut throat practices because in the long run it’s not their grand children who suffer.

    Reply
  20. Greengiant December 9, 2017 at 2:32 pm

    @Heather Cole: you living on space? The Central Bank is floating a bond in January 2018 to fund the cost of this.

    Most policyholders are Barbadians, the Central Bank floats bonds to finance the taxpayer’s business in this country. The taxpayers are the owners of the Central Bank.

    The new insurance company will aim to generate new business as well like any other business. So the dept will be repaid over an agreed period of time. So what’s your concern?

    Arthur is correct, ‘it’s a dept trap created by his failure, that this administration has to manage us out of’. Selling off Clico’s assets, freezing those of their directors would have taken more finances, and time than the route taken, and there was no guarantee that everyone would have gotten their money back.

    Your contribution here, and your letter to the editor entitled; (needed: real revolutionaries) tells me some things you are hung up on. Get out of North America, and get on the ground here, then you’ll have a better understanding.

    Reply
  21. Lionel Gittens
    Lionel Gittens December 9, 2017 at 4:43 pm

    Glad the people would be getting some money.

    Reply
  22. milli watt December 9, 2017 at 5:17 pm

    stupse………..man uncle I got dem where i got dem and you wid dis warning cramping my show uncle.

    Reply
  23. Mark Adamson December 12, 2017 at 9:50 am

    Outside of this DLP government continuing to TAX the receipts of the relevant people and groups of people in this country, this is the worst set of decisions this DLP government has made since 2008.

    It is the height of madness for this government to have moved to bail out these particular CLICO/BAICO policyholders – persons – who when they went about investing in those policies – were all about their own narrow greedy personal private interests.

    The government has no business bailing out policyholders of a group of companies that were brought down by gross and reckless mismanagement – and which had nothing to do with the government of this country.

    The particular policy holders ought to have been made to go after any receipts that came from persons or groups of persons who would have come by former CLICO assets.

    Were there not an evil wicked TAXATION system in Barbados such a bailing out could NEVER have taken place.

    Barbadians wake fully up!!!

    Reply

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