A review of Jagdeo’s hefty $3M monthly pension package
March 14, 2012
(By Mohamed Khan)
Some contend it is $3,000,000 per month or $36, 000,000 per year, while one side argues that it will be $1,000,000 per month, or $12,000,000 per year. The actual figure of President Bharrat Jagdeo’s pension and other benefits as a former president is still a conundrum for most Guyanese, and while we all deserve to know the statistical truth, we can in the meantime examine the legislation which is at the centre of this debate- the Former Presidents (Benefits and Other Facilities) Bill 2009.
More than just having a similar title, the Former Presidents (Benefits and Other Facilities) Bill 2009 is, in my opinion, a rudimentary reflection of the Former Presidents Act (FPA) enacted in 1958, and which governs federal pension and retirement benefits of former Presidents in the United States. As a matter of fact, the Former Presidents (Benefits and Other Facilities) Bill 2009 gives the impression that it was hastily designed since it enumerates the former presidents’ entitlements in a wholly generalized manner. Comparing the two bills evokes certain questions about the Former Presidents’ Bill 2009.
The key areas of comparison between these two pieces of legislation can be summarized as medical treatment, clerical provisions, travel benefits, security arrangements and former presidents’ pension. For ease of reference, I will abbreviate the two bills as the FPA 1958 and FPB 2009.
On the matter of medical treatment, the FPA 1958 authorizes medical attendance for a former president, spouse/widow (er) and minor children at any military hospital. The FPB 2009 grants similar privileges to former presidents of this country, with the exception that a former president is unrestricted as to where s/he wishes to receive medical treatment. If President Jagdeo opts for medical treatment overseas, he can certainly exercise that right with all expenses paid by the people of Guyana. He can also extend his medical benefits to “dependants” who are not defined in the FPB 2009 and who, like the former president will receive lifelong medical attention. It is noticeable that even a former president’s children in the US will not access such care for life. Since President Jagdeo currently has neither children nor spouse, can Guyanese be told if “dependants” encompasses siblings or relatives? If President Jagdeo utilizes his personal funds for such treatment, he will be reimbursed in full, whereas a former president of the US will be reimbursed at an “interagency reimbursement rate”. Is there a reason why the architects of the FPB 2009 did not introduce a similar limitation? After all, are checks and balances not necessary for burgeoning and mature democracies alike?
Such specifications might have been particularly useful in the clerical and personal staffing arrangements for our former presidents here. The FPB 2009 does not detail how many personal and household staff former presidents may hire, nor does it prescribe criteria for clerical and technical staff which the former head of state might need. The latter benefit is entirely at the behest of the former president, but what if that president requires consultants from overseas? What rules circumscribe the hiring of technical personnel and for what periods? Or is it expected that Guyanese will incur the expenses whatever those are? In the FPA 1958 the General Services Administration (GSA) oversees the staffing and clerical privileges owing to the former president as well as all expenses attaching thereto. From restricting the amounts which can be spent on staff for a year to deciding a standard level user charge for rental of office space, the GSA monitors the spending of the former president without interfering with the entitlements. If a former president, for instance, wishes to hire additional staff which will exceed the staff budget of US$150,000 per year, such payments will be personally borne by that president. As stated, the FPB 2009 does not introduce such a framework, so the former president can hire any number of technical and personal staff without once having to utilize personal funds. If President Jagdeo continues advocating from the platform of climate change and privatization, he will surely requisition technical assistance, which no doubt will come at a significant price to Guyanese taxpayers. Additionally, the FPB 2009 exempts former presidents from expenses of all utilities. This might seem a reasonable dispensation for a former president of any country, but should Guyanese be burdened with expenses attaching to the personal enjoyment of former presidents? Or is not more responsible for such expenses to be paid only for conduct of the professional duties by a former president? After all, a former president will be earning much more than ordinary citizens with multiple avenues of earning an income, so why, from both a moralistic and economic standpoint, should that individual not at least pay utilities for personal convenience?
The FPA 1958 makes this distinction between “office” and “home” by suggesting that “former presidents and their dependents may enroll in private health plans at their own expense”. In addressing travel benefits accorded to former presidents of the US, this Act stipulates that the GSA will meet all expenses for the former president and two staff, while they are on official travel. This is yet another differentiation between funding provided for professional duties and funding provided for personal enjoyment. The FPB 2009, by contrast, grants an allowance which is “equivalent to the cost of two first class return airfares” as similarly provided to members of the Judiciary. Once again, the architects of the FPB 2009 do not distinguish between financial entitlements for the conduct of professional duties and allowances for personal relaxation by former presidents. Shall President Jagdeo, for instance, be required to use his travel allowance to travel overseas on business engagements? And, if the President opts to use his allowance only for personal relaxation, then who pays for his official travel? Further, how will such allowance be calculated, or is currently calculated, when destinations change? I think here of first class airfare to China versus first class airfare to Trinidad and Tobago as an example.
The issue of security for former presidents is perhaps the least generalized of the benefits in the FPB 2009, but there are still looming questions. As an example, once again, President Jagdeo will have “full time personal security and services of the Presidential Guard Services at the place of residence”. This differs slightly with the FPA 1958 where former presidents and their spouses in the US after January 1, 1997 receive only 10 years of protection from the Secret Service. What needs to be asked is, will such security be provided to President Jagdeo should he be travelling overseas? And if so, who pays, since the Act recommends security at “the place of residence”?
Finally is the comparison of the respective pensions. Under the FPA 1958, a former president of the US as at 2008 received US$191,300 per annum or $38, 260,000. This further approximates to US$15, 941 or G$3,188,000. The FPB 2009 does not offer any reference to computations since the Pensions (President, Parliamentary and Special Offices) Act does so stating that “The President’s pension and Prime Minister’s pension shall be seven eighths of the highest annual rate of salary paid to such person”. Since I do not know of either the Chancellor’s or President’s salary, both of which are the same, I cannot deduce the seven eighths spoken about. However, if we accept what the Alliance For Change is insisting, then President Jagdeo stands to earn $3,000,000 per month of $36,000,000 per annum which converted at the current exchange rate will be US$15,000 per month or US$ 180,000 per annum.
That figure would mean that President Jagdeo will be earning $115, 384 for 26 days of work per month. And if that monthly amount is divided by a full 24 hours, it would mean that the President would receive $ 4,807 for every hour worked. Of course, the President would not be able to work 24 hours so factoring in a 12 hour work day, and the hourly earnings of the President can be roughly computed to $9, 615 per hour. That will be US$48.07 per hour, which is a more than a decent rate of remuneration even in developed nations. If the AFC figure is right, then President Jagdeo will inherit a pension comparable to that of a former president of the US. Perhaps that is why some sections of Guyana are so outraged; our GDP and rate of economic growth simply cannot permit such a relatively exorbitant pension for former presidents.
On the flip side, if we accept that President Jagdeo will earn $1,000,000 per month or $12,000,000 per annum, then like Office of the President, we see U$5000 per month or US$60,000 per annum as reasonable, if not negligible. However, even at US$ 5000 per month, the former presidents’ pension can be deemed extravagant if such benefits are to be decided within the context of a country’s nominal GDP, as I think they should. According to the World Bank, Guyana’s nominal GDP was US$ 2.2 billion in 2010 compared to US$2.246 trillion in the United Kingdom and US$14. 582 trillion in the United States for the same year. There is hardly a doubt as to the economic chasm which exists between our country and those developed nations. Yet, in terms of nominal GDP, former leaders in those countries hardly receive a super inflated pension. As stated, George Bush’s pension is approximately $3,000,000 per month and it is taxable. Former Prime Minister Tony Blair earns roughly $4,439,000 per month which includes both pension and office allowances. And here in Guyana, even if we accept that former presidents, including President Bharrat Jagdeo, will receive $1,000,000 per month, we can see the disregard for GDP as a necessary context in deciding pension. Granted that Tony Blair and George Bush receive emoluments from sources such as guest lectures and memoirs, President Jagdeo’s pension is almost 1/3 that of these two former leaders of two highly developed nations. Further, even if we choose not to compare legislation or pensions received by other leaders, but choose instead to aggregate the current President’s expected earnings based on a life expectancy of at least 80 years, then it will be shown that in the next 33 years, President Jagdeo, receiving $12,000,000 per annum, will aggregate G$396,000,000! The AFC will no doubt be enraged when they use 33 years x $3,000,000. They will arrive at $ 1.188 billion dollars!
Those figures precipitate a kind of dizziness especially the prospect of a former president earning half of the current GDP in 33 years. The debates will no doubt continue onward to elections, and it is, as always, the ordinary Guyanese, the empowered voter, who can, by exercise of common sense effect positive, all-inheriting change. One such change has to be an urgent amendment of the Former Presidents Bill 2009. No other influential and consequential Bill in this country is punctuated with so many generalities, non- specificity and vulnerability to overindulgence.
