APOLOGY - In today's Gleaner, an article written by Dawn Ritch "Travesty of Justice", which contained certain allegations relating to the transparency of the operations of FINSAC Limited. We are satisfied that the allegations made are without factual basis. The Sunday Gleaner and Miss Ritch therefore apologise to FINSAC Limited, its management and board and sincerely regret any embarassment that may have ben caused.
Dawn Ritch, Contributor
I HAVE in my possession a private letter from National Commercial Bank head office to two gentlemen who later became PNP Members of Parliament, and a third who is a private businessman.
It concerns a bank liability balance of $259,048,921. In it the bank offers to settle for $24 million.
The letter however, dated October 4, 1995, gives no clue whatsoever, as to what might have been the grounds for the write-off. This I find most strange, even stranger than the proposed write-off of less than 10 cents in the dollar. At the time NCB was indubitably in the private sector. Dr. Marshall Hall was then chairman, and NCB had just merged with Mutual Life in which Jamaica National Building Society had a financial interest. Not until the following year however, in mid-1996 did the Government admit to how disastrous affairs had become at Mutual Life, and intervened in NCB.
The present NCB managing director, the Englishman Chris Lowe, was not in place at the time, so I called Dunbar McFarlane, who is currently the organisation's deputy chairman. I asked whether or not he wished to make a comment. He replied he had "...a guarded comment from the point of view that privacy in the banker/client relationship should be insisted upon."
He then went on to say that the bank agreed to a settlement of the debt, that the "two public officials" settled, but the "third gentleman" did not. Mr. McFarlane also said that as far as NCB was concerned, the two public officials had discharged their responsibility to NCB fully.
In 1998, Mr. McFarlane said the bank "would have sold the remnants of the debt to FINSAC" which he said was now the concern of the third gentleman.
David Blackwood in a letter to this newspaper last week, described my most recent attack on the Government and specifically FINSAC, as "malicious" as though I have some concealed motive. He also took issue with my describing its operations as "arbitrary".
For the record therefore, I had no shares or savings in any of the so-called "failed financial institutions" which FINSAC took over, so they seized nothing of mine. Furthermore, I am not indebted to FINSAC, nor is any member of my family. Even without debt however, everyone's ability to get a job in Jamaica, or own an asset, is disastrously affected by the Government's economic policies.
FINSAC disgusts me, therefore, not because I'm directly involved. I attack it purely on principle. It is the odious creature of an equally odious Government, who are themselves entirely responsible for the historical antecedents that created this travesty of justice.
When the People's National Party won state power in 1989 they found the United States dollar worth about six Jamaican dollars. They also found Net International Reserves (NIR) of about US$600 million negative. In 1990-91 the Government made the decision to grow the NIR. The Bank of Jamaica had its agents everywhere buying U.S. dollars. By September 1991 the U.S. dollar had slipped to over 16:1.
Today in 2001 the NIR stands at US$1.1 billion, courtesy of this administration. During the period under review, as is well known, the PNP Government had no budget surpluses with which to buy U.S. dollars.
Printed money
This gargantuan purchase was facilitated therefore not with earnings, but by the printing of Jamaican dollars. The Jamaican dollars they printed chased the U.S. dollar, whether in the Government's hands or those of private individuals, who saw the Jamaican dollar declining before their very eyes as a store of value.
This created high and cruel inflation, and 2.5 million Jamaicans paid the price for that irresponsible decision. They saw the cost of goods and services leap out of reach for all but the tiniest minority. The Government next set upon a national course of high interest rates to bring down inflation numbers, and mop up the money in circulation. Years of high interest rates made Jamaican businesses lose money, so they cut expenditure by laying off staff.
The redundancies in employment led to a dramatic fall in consumer demand, which in turn caused more businesses to lay off more workers. A vicious cycle was begun. The worker who bought a car on loan and was laid off, saw his car repossessed. His friend who bought a house, not for speculative reasons but to be her family residence, was also laid off. Now her loan is among the many, many thousands of non-performing mortgages not only in FINSAC, but in all building societies.
The carefully deliberate economic policies of this Government forced the economic contraction, forced the downturn in the economy which has affected business, home and car-owners alike. It was official action, not any bad businessman or group of them, irrespective of political affiliation or the level of skulduggery, which sank the Jamaican economy. The businessman can't print money, neither could the erstwhile owners of the domestic financial sector.
Only the Bank of Jamaica can do that. These people could not raise interest rates either, or keep them for a decade the highest on earth. Only the Bank of Jamaica can, and did do that.
Wrong policies
These are wrong policies, and the Government of Jamaica has a moral responsibility to the people of the country to correct what it did wrong. Not only do they steadfastly refuse however, to take responsibility for this, but they doubly compound the injury by seizing people's assets with FINSAC, and giving these away, along with loan write-offs, to their friends and foreigners. The people whose houses have been auctioned under power of mortgage, aren't non-performing because of anything they did, or didn't do.
They are losing their homes, very simply, because they live in Jamaica. Is it their fault that they did not get loan and interest write-offs? Or is it the fault of the remaining private lending institutions, still staggering under the load of non-performing loans and mortgages?
All week long I've been getting calls from distraught FINSAC debtors, hearing tales of reasonable offers refused, and last chances lost. I can't imagine therefore with what sense of justice or moral superiority this Government presumes to make those governed bankrupt and homeless. It is a bitter, bitter pill.
