Jwala Rambarran on HSF US$913.5m loss: This should disturb us all

Ex-Central Bank governor Jwala Rambarran says the loss of US$913.5 million incurred by the Heritage and Stabilisation Fund (HSF) in 2022 should "disturb us all."

He described it as a "grave fiscal irresponsibility."

In its annual report last week, the HSF revealed that it recorded its first-ever loss at a total of US$913,456,918.

It said from that total, US$908,481,002 was a result of loss from investments.

In a release, Rambarran, who served as the board's director in 2012, said the revelation reminded him of the Urdu word, barrakat.

He said it is used to describe the ability to earn wealth and keep it and was often used by his grandparents.

The loss, he said, reminded him "that the old idea of barrakat still has relevance today as the Rowley PNM government continues to show their hands have not been blessed to create wealth."

He said the government waited nine months to disclose this loss which is equivalent to almost 20 per cent of the HSF's outstanding balance at the end of September 2022.

"Think about that for a moment. It took about five years for our HSF, in its previous informal incarnation as the interim revenue and stabilisation fund, to build up a balance of over US$900 million.

"The Rowley PNM government has lost this amount from the HSF in just one year...Talk about having no barrakat."

He said the rightful owners of the HSF are citizens and that it is not a "trophy backup line of credit for the Minister of Finance to do as he pleases.

"The HSF is a national heritage fund created from excess energy revenue for the people of TT.

"The HSF belongs to you, your children and your children’s children.

"We, therefore, must have an interest in how much money is placed in the HSF, how much money is withdrawn from the Fund and for what purpose, how its resources are invested, and, most importantly, what is the investment performance of the fund."

In the report, HSF chairman Ewart Williams said over the past three years, the HSF "confronted a series of challenges that have tested its resilience and threatened its sustainability."

These challenges include the covid19 pandemic, and the Russia/Ukraine war, among other things.

Rambarran said "Nothing could be further from the truth," and added that events in the global financial markets "have simply revealed the incompetence of the HSF board.

"In this turbulent environment, the HSF Board must be adept enough to shield the fund from the worst effects of the financial risks associated with such events. This requires a proactive approach, constant monitoring of the markets, mature reflection and deliberate judgement to act.

"This historic, large, first loss of the HSF shows an egregious breach of fiduciary duty on the part of the current HSF board members. By law, these board members have a fiduciary responsibility to the owners of the HSF, the people of TT."

He said in any other country, the current HSF board members would have resigned, but that integrity does not seem to live in TT.

"Surely, the Rowley PNM government should not expect us to go lightly on them for such grave fiscal irresponsibility.

"They were voted into office twice, giving the electorate the assurance they had all the answers to run the country and make it better. However, as barrakat slips more and more out of the Rowley PNM government’s hands, their legacy will not be one of development but a decade of decay."

In October 2022, Rambarran was awarded $5.4 million in compensatory damages for wrongful dismissal.

He was fired as Central Bank governor on December 23, 2015, after his appointment was revoked by then-acting president Christine Kangaloo on the advice of the Cabinet.

He was removed for being “discourteous” to the Government by making public details of foreign exchange.

Opposition MP Dr Roodal Moonilal told Newsday the loss was not surprising.

"The UNC and Opposition Leader Kamla Persad-Bissessar warned the county that Rowley and the PNM had gotten their claws on the HSF and were determined to raid the fund as daylight bandits."

In a morbid way, he said, the covid19 pandemic was like a boom to the government as it "gave them an excuse to raid the HSF.

"The citizens cannot find anything to show where this over $6 billion went. Many are without social support and countless businesses closed as a result of absolutely no help from the government during the covid19 period.

"We got a significant amount of vaccines free so clearly $6 billion did not go for vaccines. The question is where did the money go?"

Moonilal called for a commission of enquiry into the management of the pandemic and the "plunder of the HSF."

"Mrs Persad-Bissessar has promised this investigation very early into the life of the incoming UNC administration. The answers to these questions above on this first historic and exorbitant loss might be more shocking."

Newsday tried to contact Finance Minister Colm Imbert for a comment but all calls and messages went unanswered.

Newsday also contacted the Prime Minister via WhatsApp, who replied: "You need a new source of information."