IMF caution on NIS

By Geralyn Edward | Fri, January 20, 2012 - 12:11 AM

The International Monetary Fund (IMF) has warned Government about its continued use of National Insurance Scheme (NIS) funds.

The IMF caution has come 24 hours after the Central Bank of Barbados defended the controversial use of NIS funds in the stalled Four Seasons hotel and resort project. Governor Dr DeLisle Worrell said NIS investments in entities such as the Four Seasons project and Government instruments were positive moves.

However, the IMF noted that the NIS’ exposure to Government increased from 54 per cent in 2005 to almost 70 per cent in 2011 and this placed it well above the recommended limit of below 54 per cent.

In its full report released yesterday on the Article IV Consultation conducted last November, the IMF urged Government to limit its use of the country’s social security money to finance public sector borrowing.

Read the full story in today's WEEKEND NATION.

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Posted by Tony Webster 1 year, 4 months ago: I recall a recent Bajan P.M., when speaking of investing "limited resources capable of alternative uses" (the only thing I vaguely remember about economics), that his government was very careful when borrowing- or committing funds-, to distinguish between placing these into "productive use", or as he alternatively categorised such, "those that could build national capacity". Words well-worth remembering, as our current minds at Min. Finance, C.B.B., and N.I.S., continue to dip into our precious retirement and social bank account. After rescuing a certain tourism development, (several- times-over bedeviled and clearly fraught with the prospect of failure), what other private ventures, will be so blessed? Precedents, precedents, and sticking-plaster "solutions" !! What MAXIMUM ceiling do these proponents of mixing oil and water, attach to this device of using NIS funds to keep Bim "afloat"? Paying our civil service salaries and wages bill, and other routine commitments, every month, courtesy of NIS, is clearly analogous to buying my groceries off my credit card. Rationale, if one is needed, is that doing this, I might increase Bank profits, and increase Corporation Tax headed to the Consolidated Fund. N'est pas? Same reason, why we allow unfettered importation of any amount of expensive cars. And then we complain about chaos on our roads; a HUGE national fuel bill; the need to "go green"; alternative energy use, etc etc etc. We shall continue to "Ride a tiger", until, just perhaps, we are blessed by the arrival of a "Tiger Tamer". Elections near.