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UDP’s challenge to SSB investment didn’t feature their top economists

EditorialUDP’s challenge to SSB investment didn’t feature their top economists

On September 22, 2023, the SSB (Social Security Board) unveiled what the Amandala reported as a “public-private partnership named Public Administration Campus Limited SPV … a cooperative venture between the Government of Belize and the Equity Investor of the Belize Social Security Board.” The Amandala said “the ambitious project involves the construction of two new buildings beside the Eleanor Hall Building on South Chetumal Street, with the aim of establishing a consolidated public administration compound.” 

Mr. Christopher McGann, the Managing Director for PPF Capital Belize Ltd., said the investment “kind of matches some of the structural portfolio needs of the SSB”; SSB CEO, Mrs. Deborah Ruiz said SSB is liquid and it is “looking for viable investments that we can put our money to best use, so that we don’t have to go back to contributors”; and the Minister of State in the Ministry of Finance, Hon. Chris Coye, said government has to look for more creative ways to access monies that don’t “come out of GoB’s coffers”, and that another goal of the project is to jumpstart a capital market.

At a press conference on October 6, which didn’t feature the party’s two top economists, Patrick Faber and John Saldivar (if they were present, they said nothing, or what they had to say was so insignificant it wasn’t reported on in the media), the UDP announced that they smelled a hustle, and that they would be demonstrating against the project at Independence Hill today.

Opposition leader, Hon. Moses Barrow said the same people who were involved in scamming the SSB during past PUP governments are at the fore of this project. (Maybe it is good for us to be reminded of poorly scrutinized SSB lending in the past). The opposition leader said the commercial banks are liquid, that we can access funds from foreign lenders, and the government boasts of robust economic growth, so GoB shouldn’t be going to SSB for money. He said that when the PUP was in opposition they condemned the concept of the Eleanor Hall Building, and now they want to build two more like it. (If the PUP lied, well, politicians do a lot of that; and if they have come to their senses, maybe they are to be congratulated.)

UDP 2nd deputy leader, Ms. Beverly Williams said a special purpose vehicle is already in place for projects like these, that the new structure the PUP is creating looks secretive, and she expressed a concern that the SSB might be getting too low a return on its loan. (The special purpose vehicle Ms. Williams referred to that the past government set up is Belize Infrastructure Ltd. (BIL). For its part, the PUP have claimed that BIL was a corrupt vehicle, that the projects were steered to select companies, and that it had saved the country millions of dollars off BIL projects since it had taken office.)

After 30 years the buildings will belong to GoB; and UDP vice-chairman, Mr. Alberto August said the private entity involved with the project will “be walking away with $144 million on a $30 million investment” over that period. (Looking past the sweets for the private entities here, one conclusion to be drawn from Mr. August’s comments is that this project is a winner, in respect to the security of our SSB funds.)

Disappointingly, the UDP didn’t send its top economists to discuss the demerits of this project, and Belize’s non-party affiliated economists are yet to weigh in to help us better understand what the government is up to. There are some obvious thoughts that come to mind, beside the queries of the UDP about the private entities that will be cashing in, and the security/maximizing of our SSB funds.

One concern is wherefrom we will get renters for two more massive administrative buildings beside the Eleanor Hall. Will non-government businesses be seeking office space away from central and shoreline Belize City as the impacts of climate change increase? But that concern might pale against the fact that in the immediate, cash that is sitting in the banks will create opportunities for businesses, and put architects, truckers, masons, carpenters, plumbers, electricians, and others to work.

The US and UK must stop talking the impossible and declare the Palestinian State

On October 7, the Palestinian group, Hamas, launched a savage attack on Israel. Now Israel, which is far stronger militarily, has retaliated with a mass-scale slaughter and infrastructure destruction of far greater proportions.

Commenting on the situation on October 8, Minister of Foreign Affairs, Hon. Eamon Courtenay called on his social media page for a de-escalation of the hostilities, and for “a Palestinian state with all rights including East Jerusalem as its capital, and the right of return.”

The Council on Foreign Relations (a US foreign policy and international relations think tank founded in 1921) says President Biden (prior to the recent attack by Hamas) had reaffirmed the US position “for separate Israeli and Palestinian states with borders resembling those that existed before the 1967 war”, territory that included the Gaza Strip, the West Bank, and parts of East Jerusalem, but that “despite its long-standing support for a two-state solution, the United States has traditionally not supported Palestinian bids for statehood at the United Nations, saying this matter should only be decided through negotiations with Israel.”

A February 21, 2022 report from the House of Commons Library (UK Parliament) stated: “In recent months, the UK has continued to reiterate its long-standing position that it would only recognise a State of Palestine at the ‘right time’ in the peace process with Israel. In February 2021, the Foreign, Commonwealth and Development Office said: ‘The UK will recognise a Palestinian state at a time of our choosing, and when it best serves the objective of peace’. In September 2020, the Government said: ‘We are clear that we want to see the creation of a sovereign, independent and viable Palestinian state – living in peace and security, side by side with Israel’”.

Both the US and the UK aren’t making sense. In 1948, the UN sanctioned the carving out of a state for the Jews, mainly from the diaspora in Europe, in the then British-controlled region. When a country for the Jews was created, several hundred thousand Palestinians were uprooted. War broke out in the area in 1967, and Israel, with the support of the US, not only won, but it extended its borders, effectively rubbing salt into a festering wound. Hostilities in the perennially troubled area have escalated since, with Israel ruling the area with an iron hand.

Most countries in the world believe Israel should return the land it gained in that war. In the European world, Sweden, Bulgaria, Slovakia, Hungary, Poland and Romania showed the British and Americans the right path a long time ago. They understand that for there to be any kind of peace, first the Palestinian state must be “carved” out, with the pre-1967 borders. They also know that it is the right thing to do.

When SSB came under the microscope

In the capitalist state, cash is king; and in our little country few or none have more cash than the Social Security Board (SSB). The SSB collects weekly from employers and employees, and in return the SSB provides sickness and injury benefits for insured persons and a small pension on their retirement. It’s a beautiful scheme. Young, healthy workers and their employers contribute to the fund. When workers start getting old and feeble, or sustain an injury, there’s a little something to tide them over; and when they can’t go anymore, have served their country well and no longer have the energy to get out of their hammock in the morning, the SSB injects a little cash into their bank accounts monthly.

To function properly, this beautiful scheme depends on economic growth — more young, healthy workers and thriving businesses that make their proper contributions. AND it must invest its surplus cash wisely. There is no risk for the SSB on what it collects. The law mandates that workers and employers make their contribution. All the risk for the SSB is in its investments of the people’s money.

Initially, there wasn’t much scrutiny when SSB invested our funds, but today everyone keeps a close eye on its ventures: retirees out of concern for their pensions, and workers and employers because any failure of the SSB to not invest properly will result in the government mandating that they increase their contributions. SSB has been under the microscope ever since the 1998-2008 PUP governments apparently got too excited and started steering SSB into rather huge investments, many in businesses that were owned by people close to the government. When a few of these investments crashed or appeared suspect, the days of the unscrutinized SSB ended.

The faulty investments were at the core of strikes and demonstrations during the 2003-2008 PUP government, and that led to a Special Inquiry, open air, into SSB’s management. While a report on that investigation hasn’t been published, important changes were made in the management structure of the SSB. In the present structure, 4 of the 9-member management board are independent of government, 2 are from the trade unions (NTUCB), 2 are workers representatives; and of the 4 members of the Investment Committee, 2 are independent, 1 is from the NTUCB and 1 is from the private sector (BCCI).

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