Antigua St John's - The Divestment Unit has now responded to ALP Chairman Gaston Browne's suggestions for the State Insurance Corporation (SIC), which run counter to the government's plans for divestment.
In its release, reprinted below, the Unit pointed out the differences between SIC and Sagicor. This followed Finance Minister Harold Lovell's initial response to Browne's proposal.
DIVESTMENT UNIT RESPONDS TO ALP CHAIRMAN:
SIC & SAGICOR SITUATIONS DIFFERENT
The Divestment Unit in the Office of the Prime Minister has taken note of a statement by ALP Chairman Gaston Browne, headlined “Transform State Insurance Corporation into a Globally Competitive Publicly-Traded Company.”
We will confine our response primarily to the section of that statement which points to the International Finance Corporation’s (IFC) “recent investment of US$100 million in the Barbadian-based Sagicor Financial Corporation (SFC), to `bolster market confidence in the insurance industry and to expand insurance services in the Caribbean.’”
The situation with State Insurance Corporation (SIC) is not comparable to the one that existed at Sagicor. The same solution could not, therefore, be applied at SIC. It is important to highlight differences that exist between the Sagicor and SIC situations:
• Sagicor, which used to be a mutual corporation, is now a publicly traded organization. The conversion from a mutual to a private sector-led corporation took place many years ago, and Sagicor has grown since that time into an entity which operates in more than 20 countries throughout the Caribbean, as well as in the U.S. and the U.K. In the Caribbean region, Sagicor is one of the market leaders, operating an organization, which features wide governance and shareholding.
• While SIC is arguably a market leader in Antigua & Barbuda, the corporation is not as ready as it needs to be in order to diversify its business risks, either regionally or globally
• IFC has indicated that so long as the Government of Antigua & Barbuda maintains majority ownership in SIC, it would not be able to invest in the organisation, since IFC, as the private sector arm of the World Bank, lends to private sector-led entities.
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50 Comments In This Article
speaking of Clico
..
tenman
@ Devil's left hand
Gaston
INCONSISTENT
"
The Devil's Left hand
@morris
Gaston Browne
@Skyewill
Dig It
My Take (4)
Morris
My Take (3)
• Government no longer receives profits (if it was previously profitable); therefore, the revenue accruing to the government from public sector enterprises becomes shortened as a result of divestment.
• Divestment may decrease safety due to greater profit incentives.
• In extremely unavoidable cases, staff down-sizing could result to workers lay-off, and then unemployment rises. This aptly results to more crimes and social vices because ‘an idle hand is a devil’s workshop’.
• Prices may actually rise if the service was previously subsidized by the government. This is a common experience after a successful divestment process. This becomes imperative in a bid to provide qualitative service, improve efficiency and profitability.
• Divestment alone may not lead to better quality or cost reduction in public service delivery.
Morris
My take (2)
• It stops loss-making public sector enterprises from adding to government debts.
• It gives new businesses access to investment capital that government cannot provide.
• It raises more money for government through taxing former public sector enterprises.
• Government can raise funds to pay off other debts fast because of relieve from financial burden of the public sector enterprises being divested.
• Profit incentive may deliver better outcomes, for example, staff down-sizing to increase efficiency, more staff motivation, and cheaper prices to be competitive.
• If floated on the stock exchange at a good price, investors can make a lot of money through increased business revenue, efficiency and profitability.
• It removes government’s monopolistic status and inability to be responsive to citizens' needs, resulting in inefficient, one-size-fits-a ll services.
Morris
My take
Morris
@ Gaston,
Skyewill
strange country
..
tenman
@Professor
..
tenman
@Beauty,
..
tenman
@ Tenman
Beauty
@ Tenman
It is alleged that MP Lxxxxl has been eating from the Hadeed table for some time now, so I was not surprised when I saw him in a mini skirt being a cheerleader for the government giveaway.
But what is even more interesting is the loudness of the silence comming from the ALP camp ... you know they have very close relations with the campaign financing arm of the Hadeed dynasty.
Professor
@ Tenman
Tenman the SC's in the budget estimates are those who depend on the government for any subvention. The ones you listed do not depend on the government for any subvention at all since they generate all their funds to operate. I think once money is leaving the treasury, it should be reported in the estimates. I may be wrong but this is what I am thinking. However, even with this reasoning, I am not sure how Social Security is in the budget estimates.
Beauty
@Observer Overseas *& Beauty
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tenman
@Professor,
..
tenman
@ Observer Overseas
Beauty
What does ownership mean?
Observer Overseas
@Professor
..
tenman
@Beauty,
..
tenman
Dig it & Tenman
The problem is that nobody in Antigua really cares about poor people, it's all about lip service. The Pimpernel proposal is such a good idea for the poor that the middle class and rich who live off the blood of the poor will begin to find fault.
Professor
Cool Ruler
@beauty
So let the debate continue and comment on the merit or demerit of the ideas.
Fred
@ Divestment Unit
1. Antigua Barbuda Tourism Authority
2. Antigua Barbuda Investment Authority
3. Antigua Agricultural Development Corporation
4. Antigua Barbuda Free Trade & Processing Zone
Beauty
Question to everyone
Two points I have here; 1. Other insurance companies in Antigua premiums are comparable to SIC insurance (Is it that the other companies are using SIC as benchmark? so without SIC, premiums will skyrocket?)and 2. SIC has not being paying in their profit into treasury annually in both the ALP and UPP governments. Please inform me how.
Beauty
Beauty
In the first place this corporation should not be sold. I ask that these minister remember this and when we younger people get into office to serve the people of the united islands, i beg we correct and handle the situation. assets will all be seize if one sign of corruption.
Th e people come first, make it public, give all of us a bite of the apple. share it, so we can eat it, if you will not listen to us about not selling it.
my way of helping
Fred
@No name
Dig It
@Tenman pt. 2
Dig It
@Tenman pt. 1
Tenman, we the issue with the government rejecting Fannie Mae and Freddie Mac argument by the opposition, in which the Divestment Unit said "there is no conflict between government being the owner of State Insurance Corporation [SIC] and also a regulator of the insurance business." http://www.ab.gov.ag/gov_v4/article_details.php?id=1185&category=38
Dig It
UPP Supporter
Gaston
@ Tenman
With that being the case, the government needs to actively participate in diverse commercial activities to acquire the revenues it needs to run the country or it will be forced to tax the people to death.
The government cannot wait on the private sector to absorb its surplus workers, it has to get its hands dirty and create the businesses that will absorb them.
Professor
Gaston Browne
@Professor,
..
tenman
@ Digit
No Name
WRONG & STRONG
To say that SIC is not ready to diversify its business risk regionally or globally is the precise reason why it should not yet be divested. The right approach is to prune and fertilize SIC in order to put it into a competitive position to undertake the process of expanding into regional and global markets just like Sagicor did.
It is obvious that these arguments are merely justifications to be wrong and strong ... Divesting SIC is a BAD IDEA whether you do it the government's way or the Gaston's way.
Professor
Dig IT
..
tenman
All is clueless
Dig It
Achieve best value on behalf of their friends not people of A&B
Dig It
pt 3
Skyewill
part 2
Skyewill
DO MORE WITH LESS AND IMPROVE SIC pt1
Skyewill
go Gaston.
lethal.
Lovells Folly
Niaomi
The Pretender to the throne
James
Only a defence for Lovell
Tomas
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