Government’s repeated borrowing from the National Insurance Scheme to finance expenditure is “abusive of good financial stewardship” says chairman of the Barbados Entrepreneurship Foundation, Peter Boos.
Boos expressed concerned about Government’s borrowing from the NIS, printing of money by the Central Bank of Barbados, and Government’s plan to increase the debt ceiling to $4 billion, while addressing the luncheon meeting of the Rotary Club of Barbados at Hilton Barbados last week.
“It is highly improbable in my opinion that Government will be able to repay the debt to the NIS on normal commercial terms,” said the chairman emeritus of Ernst & Young Caribbean, and he concluded NIS debt restructuring would be inevitable.
In a harsh critique of Government’s response to the current economic crisis gripping Barbados, Boos said the NIS Fund had been accessed by successive administrations to finance expenditure in a manner “that is abusive of good financial stewardship”.
“What is in reality long-term debt is termed short term, so that lower interest rates are justified” he claimed.
He also said audited financial statements for the NIS had not been produced “for many years” which, had it occurred in a financial institution in the private sector, would have seen “immediate and severe” consequences.
“The directors of the NIS are exposing themselves to legal action for failing to execute their fiduciary duties responsibly,” Boos charged, as he asserted the fund’s own guidelines for asset diversification were “in serious breach” with loans to Government accounting for “somewhere around 70 per cent” of the investment portfolio. (GC)