Dear Editor,
To restructure an organisation, according to Google, is to reorganise that company with the view to achieving greater efficiency and profit; or, simply put, adapt to a changing world. This is exactly what I would like us to focus our attention on today. That is, the restructuring of The National Insurance Corporation, NIS.
The NIS in Guyana is a corporation that has been operating as a welfare organisation; that is, strictly based on welfare principles and laws. When an organisation is run along those lines, it means that pretty soon its financial standing would become a problem. Except that institution can receive funding from multi-sources, which in the Guyana situation it is not, its viability would soon be in jeopardy.
Guyana is already in that bankruptcy zone, with much of its inflows being siphoned off into large payouts, this is something that the National Insurance Scheme would not be able to sustain on a long-term basis. Greater still, it does not augur well for the institution. There are two inhibiting factors facing the institution: (a) People are living longer, hence they would be benefiting longer from the scheme than their contribution years would have afforded them. And (b) the vagaries of cash inflows with situations such as COVID-19 or unscrupulous employers who do not send in workers’ contributions. These factors place great strain on the cash inflows to the corporation.
Now, there are several options available to the authorities, which they can explore. First of these is to raise the age of retirement from 55 to 60 years. In so doing, there will be a surety of many more years of contributions, as well as a buildup of a robust cash base. The simple math of that is: let’s say 100 persons would be retiring at the end of this year, it would mean a curtailment of 500 years of contributions. I am talking about 100 x 5 = 500 cumulative years of contributions.
Cash inflows should also be encouraged from the self-employed sector of the economy. An aggressive programme should be embarked upon to get those members of the self-employed to come on board and into the contributing network. Workshops and other such outreaches ought to be held to educate those contributors on the benefits to be accrued from enlisting into the NIS Scheme.
Finally, the NIS should be restructured to bring it into the modern age, wherein the institution becomes a robust savings bank. There must be the exploration of sound economic investment programmes to cater for additional income. We are here talking about prudent fiscal investments in areas of national development. In this way, we will be moving into the modern era of development.
What I have highlighted above will make the NIS into a strong and healthy financial institution, all geared towards the financial stability of the country on the whole. All it takes is the political willpower of the executive to do it.
Guyana must move forward, and the time for that upward mobility is now.
Respectfully,
Neil Adams
