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Sam Hinds warns of “unsustainable” spending; denies existence of secret accounts

Former Prime Minister, Samuel Hinds Saturday warned that the movement of billions of dollars from a number of state-owned entities and commercial banks to the Consolidated Fund and subsequent spending would once again lead to an economic downturn.

“The danger is that it would be used to raise recurring current expenditure to unsustainable (at this time) levels putting us at risk of again getting on a path to a downward inflationary spiral such as we got on soon after Independence and only very painfully began working ourselves out of in the late 1980s,” said Hinds in a letter to the media.

Hinds, who also served as President for a brief period, further cautioned against the withdrawal of billions of dollars from commercial banks and their deposition in the Consolidated Fund would affect lending.  “Additionally, more immediately, the stated intention to withdraw all these billions in accounts in the banks would reduce the ability of the banks to lend and further constrain our economy,” he said.

He said the PPP/C and Guyanese across the political spectrum hope that those dangers would be avoided. No one would want a return to the 1970s and 1980s.

sam_hinds

Former Prime Minister Samuel Hinds.

That period had been characterised by double-digit inflation, devaluation of the Guyana dollar, high interest rates and the banning and restriction and shortage of basic food items and other basic necessities such as toilet tissue.

He also denied that the People’s Progressive Party Civic (PPPC)-led administration hid billions of dollars in secret bank accounts, saying that they were actually the accounts of autonomous and semi-autonomous agencies like the Guyana Geology and Mines Commission (GGMC).

“First, those accounts were not unknown, not hidden, not secret, not unlawful. Second, the fact that there are billions in these accounts should raise questions about whether there was any stealing at all,” said Hinds, a former Chairman of the Privatisation Unit/NICIL.

The former Prime Minister suggested that the 23-year long PPPC administration had no apology to make for spending monies from agencies like the GGMC for “off-set budget financing” for some time after assuming office in 1992. “And yes, particularly in the earlier years we needed to and did use such accounts for what is known internationally as “off-budget financing”. In our first years, Guyana’s economic position was so bad and the international strictures on various budget ratios so tight, we had to have the GGMC fund maintenance of the air corps of our GDF, as prepayments for servicing greater monitoring of mining across our hinterland. Again, with a good reason in hand I had the GGMC fund the extension of the MMC minibus-grade trail into Madhia transforming the outlook and prospects for that community.

Whatever the wrongdoing in such actions, I and members of the Cabinet then, are ready and willing to pay the price. We of the PPP/C, citizens of Guyana, no more so or less so than others, hope that those dangers would be avoided. No one would want a return to the 1970s and 1980s,” he said.

Apparently countering claims by the APNU, AFC and former Auditor General, Anand Goolsarran that PU/NICIL had allegedly violated the law by not transferring billions of dollars to the Consolidated Fund, Hinds said the records show differently. “It is an achievement of note that there are surplus funds in bodies which before drew from the Consolidated Fund…the records would show that without fanfare, billions of dollars had been transferred steadily, from time to time over the years to the CF from these accounts including the accounts of PU/NICIL,” he said.

The former Prime Minister echoed sentiments by former President Donald Ramotar that Brassington has not violated any law. “What evidence is there? In all that I have seen and heard I have not sensed any criminal act: there is no indication ofany money flowing to any of their pockets. The CEO’s crime (and that of PU/NICIL as an institution along with all its employees) seems to have been that he did his able best to carry out the policies and programmes of our PPP/C administration, accepting them and pursuing them rather than taking his cue from the then opposition,” he said.

Instead, he praised PU/NICIL for playing a major role in bringing a number of projects like the Marriott Hotel to fruition, despite criticisms and allegations by APNU and AFC in opposition and government.

  • geeteerebel

    The GOG playing with these ppl.. just like in every other civilized society your taxes paid and income declared should tell where your money came from…

  • Jinnah Rahman

    SAM HINDS AND OTHERS PREPARING FOR JAIL : “Whatever the wrongdoing in such actions, I and members of the Cabinet then, are ready and willing to pay the price”. These are words of the former Prime Minister, who is among the many- that enriched himself on the backs of the Guyanese people.

    Sam Hinds and the PPP “acrobatic” leadership are terrified of the consequences of their absolute MISUSE of POWER during their period of rule. The time has come – JUDGEMENT DAY is here and they are alledgingly snitching against each other in secret – and in public trying to present a unitied front against the background of wrong-doings committed against the nation.

    There has been no TRANSPARENCY in government and in their private lives. The PPP offered no real leadership in government. They did not care about the consequences of their ACTIONS or IN-ACTIONS – and they showed no remorse. They misused everything that they could get their hands on. They abused everyone. Disrespected and violated every law in the country. Today – the “chickens have come home to roost” !

    Sam Hinds and Donald Ramotar – maybe the lesser of the evils in the PPP – are desperately trying to cover-up for all the WRONG-DOINGS of the PPP and its period of goverance. Sam Hinds – is asking for mercy from the Guyanese people, but they to refer to him as “Sam Blind” – due to his inability to offer transparent and constructive leadership.

    Donald Ramotar on the other hand became President by default – through the “good will” of JAGDEO, who thought that he could have manipulated him, as the Russian President Putin did to his colleague and former President, who replaced him for one term in office. Donald could not complete his 5 years term and was forced to demit office.

    Guyana cannot allow this type of CORRUPT government to return and every step is being made – with some resistence from certain elite groupings in and out of government – to establish JUSTICE and ACCOUNTIBILITY.

    The PPP has openly attacked Professor Clive Thomas, the head of SARU (State Asset Recovery Unit), whose agency will eventually present the EVIDENCE of CORRUPTION, NEPOTISM, SQUANDERMANIA and IMMORALITY. When the new Laws are passed to establish the unit – as a permanent agency – with all the powers necessary to investigate and prosecute – the PPP will have no room to hide their ill-gotton wealth.

    The idle boast and bragging by the PPP that they did not commit any CRIME will come to an abrupt end. The nation will then know the TRUTH and nothing but the truth – that the PPP LEADERSHIP is TOTALLY UNFIT to run the country.,

    If the PPP leadership has nothing to fear and as they claim they “have done no WRONG, then they should not interfere with the on-going process of finding out the TRUTH and dispense JUSTICE to all concern.

  • Emile_Mervin

    First, Sam does not realize his warning is useless to both the coalition and the PPP, because he lacks political relevance to both.
    He just does not grasp the enormous national and international embarrassment the PPP slapped on him when it refused to make him President under a PPP government, then unceremoniously dumped him at short notice when the party knew it was facing defeat in the May 11 polls.

    Second, how can the movement of public funds sitting in unnamed accounts all over the place into Consolidated Fund lead to an economic bust, unless the funds were being used by banks to lend to favored borrowers? It is a dangerous economic practice for government to engage in financial skullduggery to make the economy look good, because that means government, not the private sector, is the real engine of economic growth.

    Jagdeo has hypnotized and brainwashed seemingly bright people.

    • SeeLochan Beharry

      Hi Emile,
      Accurate.
      The last paragraph is hilarious. Not sure they were brainwashed, most did it for wealth. The then VC of UG, Dr James Rose, willingly served Mr Jagdeo. He was even on the campaign trail with Mr Jagdeo. The VC and DVC all defended the then Govt’s action at UG. This has cost us years and destroyed so many of our youths. The then PNC parliamentarians were all silent. We asked Mr Vincent Alexander to support us – he was silent too. Some think he did not know what was going on where he was registrar!!
      Most of the followers of Mr Jagdeo were fools, tools and stools. They all profit handsomely. They were all bought.
      Chances are the same cast of characters will be engaged to work for the new Govt. as we see already happening.

      Seelochan Beharry

    • weir

      Emiile , the agreement with PPP and Civic Coalition is that PPP gets the Presidency while Civic gets the Prime Minister.Same goes to APNU and AFC.

      If the situation is the same with Nagamootoo as it was with Hinds ,would you like or would it be morally correct for Nagamootoo to be the President when Cummingsburg Accord dictates otherwise?
      Mr. Hinds is correct when laments about the possibility of economic down turn as it relates to Government over spending.If Expenditure exceeds Income there will be Deficit.
      It is the Private Sector that is the fuel of the economy. When the Private Sector does well, the economy strive better and so the country.There will be more money circulating, spending will be enhanced by citizens/consumers hence more taxes/revenue will be collected thus economic growth.

      I have never worked under The PPP/C Government but I can tell you the latter part of PNC was terrible. I don,t know if you or the others who usually criticized PPP/C Government know your history well. I would appreciate if you do a holistic comparative analysis of the socio-economic aspect of Guyana pre and post1992 to May 2015 and let you conscience be your guide.
      Let constructive criticism prevail.

      • Emile_Mervin

        1. There was no 1990 PPP accord with GUARD, which produced Sam Hinds, who was recommended by Yesu as Cheddi’s running mate. So there is no comparison between that 1990 verbal agreement and anything hammered out in the 2015 Cummingsburg Accord.

        2. Hinds is warning about unsustainable spending without adverting to specific areas of overspending by the coalition regime. Now, do you know of any area of unsustainable spending by the coalition regime?

        3. Under the PPP, two sets of money were circulating to sustain the economy: a) government funds from exports and b) money laundering. And there was even an element of government funds to contractors being laundered by no-show contractors.

        4. The PNC left a US$2.1b debt, but most of it was written off when Jagdeo followed Hoyte’s ERP. Jagdeo then went on a fresh borrowing spree, so together with money launderers and shady foreign investments fro Asia, the informal economy was a major part of the formal economy. Fear of an economic collapse, therefore, is premised on the assumption that these illegal monetary flows will dry up under the coalition.

        5. I am well aware of both the Burnham -Hoyte PNC eras and Jagan-Jagdeo-Ramotar PPP eras, and believe me when I tell you that a corruption-fueled informal economy made Jagdeo look good, as he and his cronies treated the treasury and resources as personal piggy banks.

        • weir

          Emile,my morals does not take me to the part of being a pessimist.However, it is wise to criticize when you have the right solution to any problem identified . At the end of the day it is what you achieved or what you experienced .With all the corruption being talked about I still see the same thing is going on under this new government and all the critique are silent .Why don,t you criticize to the extent as you normally do, issues such the 50% increase in salary, the employing of friends by Van West Charles, the non forensic audit of MCC, Mr Welch still on the job at GPL, just to name a few.

  • SeeLochan Beharry

    Mr Sam Hinds never knew what went on, never knew what is going on and what will never know what will go on.
    All these years, he never spoke up on behalf of the University, did nothing as President and Prime Minister. He covered his eyes, ears and nose (the University stinks). All these years he did nothing to prepare our youths for the future. Like other PPP members, their children were educated overseas. The poor Guyanese, if lucky enough had to make do with an understaffed, under-qualified and underfunded UG. Our Youths were sent to Cuba to be underschooled.
    No one has any respect for Mr Hinds – he has danced to please his masters in the PPP. This man has danced to the tune of Mr Jagdeo.
    How can you look at yourself in the mirror, Mr. Hinds?
    History will not be kind to you Mr Hinds!
    Seelochan Beharry