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Untidy Gov't, walking PNP injures taxpayers
Published: Monday | August 2, 2010
Omar Davies, opposition spokesman on finance. - File
THE PARLIAMENTARY Opposition was fiery in the House of Representatives on Wednesday as it admonished the Government for the bad decision it took with regard to a currency swap set to cost the country billions.
Parliament was called on to guarantee a loan of €204.4 million from Bandes in Venezuela to the Development Bank of Jamaica (DBJ), which is being on-lent to the National Road Operating and Constructing Company (NROCC).
The loan guarantee became necessary because DBJ's currency-swap arrangement, involving those funds which took place in 2008, had become a costly exercise. Jamaica had converted the €204.4 million loan into US dollars, but the strengthening of the euro from US$1.54 to one euro, at the time of the swap, to US$1.10 to one euro has left the country suffering huge losses both on the interest and principal sides of the loan.
The people abandoned
Now, Government is attempting to exit the derivative arrangements which allowed for the swap. If Jamaica is to successfully exit this arrangement, it would have to pay CitiBank the institution which dealt with the swap, US$57 million. Citibank has been guaranteed US$79 million to under-take the swap for the Government.
Although the swap took place in 2008, it was never brought to Parliament for approval until May 2009. At that time, the Parliamentary Opposition was in its walkout mood. They did not contribute to the debate on the loan guarantee and the currency swap. The Opposition had walked out complaining that the affairs of the House of Representatives were being conducted in an untidy matter. The scheduling of the Sectoral Debate was a major issue for the Opposition, and they abandoned the people's business.
Omar Davies, opposition spokesman on finance, who refused to give support to the motion for the loan guarantee, said the timing of the matter before the Parliament had him in an awkward position.
"A loan guarantee is not something which occurs overnight. It is a very complex issue," Davies said last May.
Untidy affairs
Cabinet had taken the decision in November 2008 to approve the loan guarantee and currency swap. Davies told the House that he was only contacted about the loan guarantee earlier the day the approval of Parliament was being sought.
Government had simply rushed it to the House of Representatives for rubber-stamping. Prime Minister Bruce Golding was adamant that the guarantee had to be put in place before May 31.
As fate would have it, the untidy affairs now see Prime Minister Golding returning to Parliament to ask for another guarantee in order to stop the haemorrhaging. He said the effects of the deal were so enormous the Government has to back out of the currency-swap arrangement. He also said the Government hoped to buy back its debts from a third party at a discounted price to offset the effects of what is now unveiled to have been poor judgment.
Though a complex issue for the ordinary man, this expensive currency swap and loan guarantee will have telling effects on taxpayers' pockets. It has certainly, once again, brought home forcefully the need for a better approach to parliamentary procedures and governance.
If the Government were more respectful of the Parliament, it would not have waited for the last minute to bring the matter to the House, as it did in 2009. The subject would have been properly laid on the table thus giving all members an opportunity to get counsel on it and properly represent their constituents.
Be done with bullying
If the cause of the Jamaican people is going to be advanced, the age-old practice of govern-ments using 'big sticks' and bully boys to push things through the House whenever it so desires must come to an end.
The role of this current 'walking' Opposition in this debacle must also be placed under the microscope. One wonders what would have happened had they remained in the House and voted against the loan guarantee to facilitate the currency swap last May. Perhaps they would have been persecuted for standing in the way of 'progress', but history would have absolved them.
We can only speculate on what could have been. One thing for certain was that partisan politics had distracted both sides at the time of the original swap arrangement. It was the season of the by-elections and the Government had vastly ignored its legislative responsibilities and was focused on getting Gregory Mair re-elected in North East St Catherine.
The Opposition wanted Mair to stay out and was doing everything to demonstrate that the Government was untidy and could not manage. That was at the centre of the walkout then, as Phillip Pauwell, the opposition member who was scheduled to speak, was not even in the House that day.
Now Jamaicans will pay dearly for an untidy Government and a walking Opposition.
Send feedback to thegavel@gleanerjm.com
Published: Monday | August 2, 2010
Omar Davies, opposition spokesman on finance. - File
THE PARLIAMENTARY Opposition was fiery in the House of Representatives on Wednesday as it admonished the Government for the bad decision it took with regard to a currency swap set to cost the country billions.
Parliament was called on to guarantee a loan of €204.4 million from Bandes in Venezuela to the Development Bank of Jamaica (DBJ), which is being on-lent to the National Road Operating and Constructing Company (NROCC).
The loan guarantee became necessary because DBJ's currency-swap arrangement, involving those funds which took place in 2008, had become a costly exercise. Jamaica had converted the €204.4 million loan into US dollars, but the strengthening of the euro from US$1.54 to one euro, at the time of the swap, to US$1.10 to one euro has left the country suffering huge losses both on the interest and principal sides of the loan.
The people abandoned
Now, Government is attempting to exit the derivative arrangements which allowed for the swap. If Jamaica is to successfully exit this arrangement, it would have to pay CitiBank the institution which dealt with the swap, US$57 million. Citibank has been guaranteed US$79 million to under-take the swap for the Government.
Although the swap took place in 2008, it was never brought to Parliament for approval until May 2009. At that time, the Parliamentary Opposition was in its walkout mood. They did not contribute to the debate on the loan guarantee and the currency swap. The Opposition had walked out complaining that the affairs of the House of Representatives were being conducted in an untidy matter. The scheduling of the Sectoral Debate was a major issue for the Opposition, and they abandoned the people's business.
Omar Davies, opposition spokesman on finance, who refused to give support to the motion for the loan guarantee, said the timing of the matter before the Parliament had him in an awkward position.
"A loan guarantee is not something which occurs overnight. It is a very complex issue," Davies said last May.
Untidy affairs
Cabinet had taken the decision in November 2008 to approve the loan guarantee and currency swap. Davies told the House that he was only contacted about the loan guarantee earlier the day the approval of Parliament was being sought.
Government had simply rushed it to the House of Representatives for rubber-stamping. Prime Minister Bruce Golding was adamant that the guarantee had to be put in place before May 31.
As fate would have it, the untidy affairs now see Prime Minister Golding returning to Parliament to ask for another guarantee in order to stop the haemorrhaging. He said the effects of the deal were so enormous the Government has to back out of the currency-swap arrangement. He also said the Government hoped to buy back its debts from a third party at a discounted price to offset the effects of what is now unveiled to have been poor judgment.
Though a complex issue for the ordinary man, this expensive currency swap and loan guarantee will have telling effects on taxpayers' pockets. It has certainly, once again, brought home forcefully the need for a better approach to parliamentary procedures and governance.
If the Government were more respectful of the Parliament, it would not have waited for the last minute to bring the matter to the House, as it did in 2009. The subject would have been properly laid on the table thus giving all members an opportunity to get counsel on it and properly represent their constituents.
Be done with bullying
If the cause of the Jamaican people is going to be advanced, the age-old practice of govern-ments using 'big sticks' and bully boys to push things through the House whenever it so desires must come to an end.
The role of this current 'walking' Opposition in this debacle must also be placed under the microscope. One wonders what would have happened had they remained in the House and voted against the loan guarantee to facilitate the currency swap last May. Perhaps they would have been persecuted for standing in the way of 'progress', but history would have absolved them.
We can only speculate on what could have been. One thing for certain was that partisan politics had distracted both sides at the time of the original swap arrangement. It was the season of the by-elections and the Government had vastly ignored its legislative responsibilities and was focused on getting Gregory Mair re-elected in North East St Catherine.
The Opposition wanted Mair to stay out and was doing everything to demonstrate that the Government was untidy and could not manage. That was at the centre of the walkout then, as Phillip Pauwell, the opposition member who was scheduled to speak, was not even in the House that day.
Now Jamaicans will pay dearly for an untidy Government and a walking Opposition.
Send feedback to thegavel@gleanerjm.com
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