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The Government’s Real National Bank

The Government’s Real National Bank
June 21
12:24 2019

By: Neri O. Briceño

“The Scheme pays benefits on behalf of all insured persons, who are employees fourteen years and over, from ‘the womb to the tomb.’ Maternity Benefits are paid to pregnant women who qualify, and Funeral Grant is paid to the survivors of a deceased insured person who qualifies for the benefit. These are only two examples of the benefits being paid. In accordance with Section 2 of the Social Security Act, Chapter 44 of the Laws of Belize, Revised Edition 2000-2003, the contributors to the scheme are employed persons over the age of fourteen (14) years. It is the employee’s responsibility to register with Social Security. Statutory Instrument No. 106 of 1999, states that “an employer shall not employ a person who has not been registered under the Act.” “Employer” means any person who employs or any person(s) who employs on behalf of another.”

In the “Message from the Prime Minister,” in the 1981 Annual Report of the Social Security Board, the Rt. Honorable George C. Price said: “… Social Security is but the beginning of developing the proper attitudes of responsibility for older or injured citizens, so that we become conscious of the human and social obligations, which the economy must strive to meet.” Belize Social Security Board Website; Section About SSB – our History, 2019.

Has Social Security lived up to this? I can vividly remember myself, a young Standard IV student sitting in the St Peter Claver Parish Hall listening to Punta Gorda’s first Social Security Administrator Claud Pascascio giving a presentation sometime in 1981 about what this new program was about. I must confess that there was not much that I really understood about the presentation except that it had to do with taking care of the poor. Further explanations in the classroom were just as fruitless and all I took from it was that it had something to do with taking care of the elderly and people who got hurt on the job. I remembered the adults saying that it was a good thing, but the child that I was, confused by so much adult information, I reached out to one of my older brothers who was a career public officer and would later serve over 29 years with GOB for a more in-depth explanation. My brother had this ability to break things down to the small change level that even a baby could understand. I don’t remember much of the explanation he gave me, but I do recall that he was not as enthusiastic as most of the other adults. What I do recall is him saying that if this was not managed properly and it probably would not be, it can end up being a bank for the government and those who contribute will be the least to benefit. From that moment on, that was the view I have always held about the global Social Security system and it has mostly been proven right with a very few narrow exceptions.

There is no denying that SSB has morphed into a monster of its own. It has clearly become the government’s real national bank and that fund that GOB has always held in reserve when all else fails. It’s a bank for the politically connected and over the years the institution has undertaken some reckless spending on its own. Working at SSB was that coveted job that everyone wanted because it paid well, had very handsome benefits and a fairly easy working environment, or at least that’s what it used to be. It became the place where party loyalists and supporters were offered plush jobs with limited or no real responsibility. In other words they were milking the system and offered nothing in terms of productivity and not to mention were untouchable.

GOB’s hands were always the moving force behind SSB and that is the reason why now the CEO is trying to pull the equivalent of a Joseph Goebbels move, to explain to the Belizean people why increasing rates is in our benefit. Since its inception in 1981, SSB has had 9 CEOs and probably as many chairmen since that post normally goes with the ruling party. Which one of them dropped the ball to allow SSB to reach where it is today? None would admit. However, SSB long ago missed the target of what it was really there for. The organization has always been known to spend massively on itself with above the average salaries, massive spending in buildings, infrastructure and accommodations and not to mention the lavish Christmas Parties. None of its leadership foresaw and if they did, they certainly didn’t do anything to contain the massive hemorrhaging of funds that could have otherwise been saved, and now we find ourselves in this situation.

But that was just the tip of the iceberg. The final blow was administered when an SSB flush with cash and with nothing to do with it decided to enter into the banking sector through the form of investments. Not a bad idea, I must say, but the fact that SSB is controlled by the ruling government of the day and that its board is handpicked by the ruling administration, immediately spelled disaster. Over the years SSB is known to have spent on projects that not even the naivest loans officer at any bank would have approved. This is a known fact by those within SSB and the general public and the skeletons of some of these disastrous projects still litter the countryside around the nation. These projects were designed with one thing and one thing only – to fleece the fund of hard-working Belizeans’ money and channel it into the pockets of the politicians. The projects, in their mere nature, were designed to fail. With cash flowing like water through the veins of SSB, no one said let’s take a step back and restrain some of this spending and think of that day when the population would have aged to that point where outputs would outstretch inputs. Today, once again the Belizean public is left to hold the short end of the stick.

So, what is the next move? There are only two possible moves now that can be made. One, we can pay the increased rates or two, we can all refuse to do it. Refusal will probably spell the end of the fund as we know it and paying it will probably just put it on life support. Moving forward, what the SSB needs is massive reform from the top down. It needs to carefully evaluate how it is spending what is essentially people’s money. Start with the salaries of its top appointed executives. Does it really need that many? Does GOB need to have a majority on the Board of Directors? Set a minimum qualification for a board member. We cannot continue to have people sitting on these boards whose decisions have national impact and they have not even had the experience of managing a panades shop.

Eliminate those politically appointed staff that offer nothing to the bottom line and are there just for a salary. Put a freeze on any new hiring and lay off or pay off those tenured staff that want to leave. In other words, streamline the operation like a for profit business. Fire and reconfigure the Investment Committee and put one in place with people that will have both the legal authority and the ability to refuse any dictates from GOB. The key to SSB’s ultimate success is to remove it completely from under GOB control and its tentacle-like influence. But finally, it needs a comprehensive audit. One that will question everything, from the purchase of paperclip to the multimillion dollars investments, to what happens to monies that were contributed by people that were working and left the country and never returned and never made any claims, the monies that expatriates paid into the fund. It also needs to aggressively start collecting on those investments that are in default or non-compliant. Failure to make tangible changes will result in the same situation we are in today and 10 or 15 years down the road we will have another CEO making the same propaganda speech. Apart from GOB, the SSB probably has one of the biggest responsibilities within the nation because it involves taking care of people. It is one that it must take on with the responsibility it requires. Over the years, SSB could have done a much better job of managing the people’s money.

It’s all about the people!!!!

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