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Former Central Bank governor says HSF’s $913M loss a “grave fiscal irresponsibility”

Former Central Bank governor Jwala Rambarran has described the loss of US$913.5 million by the Heritage and Stabilisation Fund (HSF) in 2022 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 on Sunday, Rambarran, who served as the board’s director in 2012, said the revelation should “disturb us all.”

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“We, therefore, must have an interest in how much money is placed in the HSF, how much money is withdrawn from the Fund and for what purpose, how its resources are invested, and, most importantly, what is the investment performance of the fund.”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