David Clarke
Posted By Stabroek staff On December 6, 2009 @ 5:01 am In Editorial | 6 Comments
“…when you finish writing your memoir I would like to read it,” said US Judge Raymond Dearie to David Clarke prior to sentencing him. Well wouldn’t we all. However, no doubt we need not hold our collective breaths; there will be no reminiscences emanating from that quarter any time soon – at least not on any of the subjects in which most of the citizens of the Co-operative Republic have an interest. Mr Clarke’s testimony, the local wags presume, might be needed again by the federal authorities, in which case discretion will be forced upon him. In any case, he may also have personal safety issues to consider.
Judge Dearie appears to have been impressed by the defendant – one presumes because he did not fit the profile of the average drug trafficker who normally passes through his courtroom. “This is a remarkable case,” he observed, apparently repeating at other points that it was one of the more interesting ones which had come before him. While it was clearly a remarkable case for the judge, it was even more so for Guyanese, who knew – and still know – hardly anything about either the former major or his trafficking activities. Neither the GDF nor the Government of Guyana saw fit to even inform them that he had been indicted by the United States in 2006, and that he had voluntarily turned himself in; the information that he was incarcerated in the US on drug charges was revealed much later by this newspaper.
It was that revelation which miraculously unsealed the President’s lips, since he then informed the press that when Mr Clarke had been in charge of Operation Tourniquet in Buxton during the notorious years of 2002-03, the then captain had been in league with the criminals. “… the information on Clarke came from people whom I know in Buxton,” he said, “And I would never ever, ever betray their confidence because they told me this in confidence.” It might be added that Mr Roger Khan had made a similar accusation, but against this has to be juxtaposed the fact that the US considered that he and the former army officer were co-conspirators in the export of drugs. This appeared to receive confirmation when Mr Simels (Mr Khan’s former attorney) identified Mr Clarke as the prime candidate for ‘neutralization’ because he was a critical witness in the case against his client.
Whatever he was doing when based in Buxton, Mr Clarke, who reiterated his apologies to his family and the American people when he spoke in court, directed not a word of contrition towards his homeland and his Guyanese compatriots, whose trust he had betrayed and who had provided the opportunities for him to rise – opportunities, it must be said, which he had squandered.
Mr Clarke is now free because of time served, and what is more surprising, he is not to be deported. For the gossips in this country that means that he was very helpful to the prosecution, and/or as suggested above, that his evidence might be required in other cases. And according to the federal prosecutor Ms Shannon Jones, Mr Clarke’s brother and a dozen others were sheltering in Guyana out of reach of the US authorities. If the President signs the Fugitive Offenders (Amendment) Bill into law, then that could allow the institution of extradition proceedings potentially with results more palatable to American justice than what obtains at present. We can only wait and see whether the long arm of US law will be in fact be able to reach directly into Guyana at last.
But we come to a more fundamental point, and that is that the highest profile Guyanese criminals risk facing justice in the United States, but not in Guyana. The government can talk blue cheese about its commitment to fighting narcotics trafficking, and it can churn out as many drug master plans as it pleases, but in the end it has produced zilch in terms of results. The only thing our local drug barons have to fear is that they will end up in a federal courtroom, because the probability that they will ever have to defend themselves in the High Court on Avenue of the Republic is so low as to be almost non-existent. And the worst of it is the government seems totally unconcerned about this.
And there is the extraordinary silence on the part of the administration about what has emerged from these New York trials in general, and from this last one in particular. Apart from the President’s brief interlude of garrulousness occasioned by the revelation from Stabroek News that Mr Clarke was being held in the United States, the authorities here have been silent on the case. What was so secret about the army officer’s arrest that the citizenry could not be told? And why were proceedings not instituted against him here? Mr Jagdeo’s remarks about protecting his Buxton sources (it must have come as a surprise in many quarters that he personally knows people in Buxton who would give him sensitive information of that kind), surely makes no sense. Ways could have been found to pursue investigations without the source of the information ever being disclosed.
If on the basis of intelligence received law enforcement cannot build a case that someone is in league with criminals then something is really wrong. As it was, Mr Clarke was allowed to remain in the army, although the President did block his promotion and recalled him in the middle of a training stint in the US, of all places. The fact that he was put on trial in the United States, Mr Jagdeo thought, vindicated his actions re the recall, etc. Well, not quite. With all that information to which the President was privy and which the joint services could have followed up, he still ended up being held on an American indictment and not on a Guyanese warrant. This seems to be an instance of total incompetence on the part of the authorities; other than that, they open themselves to the accusation that they did not want to arrest him for some reason. And if they didn’t want to pursue a case against him, then why not? Clearly there is a lot more yet to be uncovered in this matter.
Last week Parliament passed the Mutual Assistance in Criminal Matters Bill, which makes it easier for Guyana to seek help from Commonwealth countries or other countries with which Guyana has a treaty concerning such assistance. As PNCR MP Debra Backer commented, this was the second time round for this bill, which had been passed unanimously by the House in March 2006, but which had not received presidential assent.
So now three-and-a-half years later, it has made its second entrance, and presumably the President has every intention of signing it this time, although he never explained why he didn’t sign it on the first occasion. While as Ms Backer said, it will enable the government to seek information on the drug cases against Roger Khan, David Clarke and others, whether it actually acts is another matter entirely. As in the case of Mr Clarke’s memoir, no one should hold their breath.
6 Comments (Open | Close)
6 Comments To "David Clarke"
#1 Comment By La Dorada On December 6, 2009 @ 6:38 am
Prez didn’t sign the Bill. Hmmm, must be just one of those things….like the marriage certificate.
#2 Comment By MXQBH On December 6, 2009 @ 7:47 am
Blue cheese! Very bad metaphor, ed-op writer. I can think of some more appropriate metaphors, non even vaguely edible, but not blue cheese. Blue cheese is considered a delightful delicacy among cheeese aficionados.
#3 Comment By Raj On December 6, 2009 @ 9:41 am
SN go after this story and expose it for all its worth. A key piece of the government role is when Khan told Simels to nutralize Clarke but don’t kill his mother because the government will be upset. Why would Khan say that if the government is not complicit in Khan/Clarke association or at least know something.
#4 Comment By Carl On December 6, 2009 @ 11:51 am
Lest it seems that David Clarke or Roger Khan voluntarily chose to apologize only to Americans for their crimes, I’d like to advise readers that an apology to the U.S. is required as part of a plea deal.
Besides, no criminal would apologize for crimes committed in a jurisdiction in which he/she is yet to be charged. After all, almost everyone always claims to be innocent after being charged with a crime. And neither Clarke nor Khan is ready to offer apologies that could be immediately construed as guilt.
#5 Comment By Blackrattlesnake On December 6, 2009 @ 5:04 pm
La Dorada…..the Prez always on the move…..he’s jetsetter with plenty frequent flyer miles…..Guyana is where he changes his suitcases and clothes……no time for trivial things like signing stuff here……as a ‘finance’ man…..his pens are only for signing ‘money’ matters.
#6 Comment By Blackrattlesnake On December 6, 2009 @ 5:11 pm
MXQBH….them really meant to use the expression…’talk til them blue in the face’…..proof-reader lapse…..
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/editorial/12/06/david-clarke/
Sunday, December 6, 2009
Saturday, December 5, 2009
Finance Minister seeking another US$25M from nation's coffers
Kaieteur News news item, Friday 04 December 2009 - "Finance Minister seeking another US$25M from nation's coffers …to extend fence, build roads, fuel for joint operations, etc" - http://www.kaieteurnewsonline.com/2009/12/04/finance-minister-seeking-another-us25m-from-nation%e2%80%99s-coffers/
By Gary Eleazar
Finance Minister Dr Ashni Singh, by way of two supplementary papers tabled in the National Assembly, is seeking another $4,677,208,405 (the equivalent of US$25M) from the nation’s coffers.
Dr Singh yesterday tabled the documents asking that it be debated at the next sitting of the House.
According to financial paper three with the schedule of supplementary provision on the current and capital estimates totaling $2.2B, some $28M was allocated in the voted provision in this year’s budget, and now the Guyana Defence Force is gearing to receive another $22M for the extension of a fence at Camp Groomes on the Soesdyke Linden Highway.
The GDF is also slated for an additional $135M under ‘Legend’ fuel and lubricants and it is explained that the money is required to meet additional expenditure.
The Defence Force will also be receiving under the description “other” an additional $273.8M
And this too is listed to meet expenditure for joint operations.
Added to the $14.5M that was given to Office of the President for the purchase of equipment another $5.6M is being requested.
The Public Works Ministry is also slated to benefit from some $1.2B in addition to the $67M it had already received.
Office of the President-Presidential Advisory is in line for a generous boost of $50M in addition to its original allocation of 413.6M.
The document that was tabled by Dr Singh stated that the money is to meet expenditure in relation to the Office of Climate Change and the Low Carbon Development Strategy.
The Agriculture sector is also slated for just under half off a billion dollars with $10M of that identified for hinterland communities affected by El Nino.
Included too in that sum is the $400M that will be going to the Guyana Rice Development Board which was announced earlier this year by head of State Bharrat Jagdeo to assist rice farmers.
Another $40M will be shared between the National Agriculture Research Institute and the New Guyana Marketing Corporation.
On the supplementary provision of the capital estimates on financial paper four, the Guyana Sugar Corporation will be the beneficiaries of another $1.4B in addition to the $1.8B for the construction of the packaging plant at Enmore.
The two papers make their way to the House shortly after the National Assembly approved more than $2B in addition to what was voted for in the 2009 Budget.
The Minister in August successfully tabled the First Schedule of Supplementary Provision on the current and Capital Estimates totaling $247.4 million for the period from July 16 to December 31 this year.
The monies requested at that time for current estimates included funds for the Amerindian Affairs Ministry for items such as rental of buildings, print and non print materials, fuel and lubricants, vehicles spares and services, other transport travel and postage, electricity charges, training (including Scholarships) and another item line named ‘other’.
As it relates to the rental of buildings, no money was voted for in the budget and the Finance Minister had sought some $2.5M on their behalf.
For the Ministry of Health, in addition to the $7.3M voted for the maintenance of buildings, an additional $30M was received and it is said to be used for the refurbishing of offices, electrical installation and plumbing to existing buildings to house staff of the Ministry of Health that formerly occupied the building that was destroyed by fire.
Under the Agency, Guyana Defence Force Defence Headquarters, below the description of ‘other’ an initial $350,000 was voted and another $115M was sought to meet expenditure for joint operations.
Under capital estimates, a total of $93.9M was allocated to the Ministries of Foreign Affairs, Amerindian Affairs and Education.
There was also the second supplementary provision paper for the period ending yesterday for $2.5B.
Out of that the Finance Ministry secured some $473M for the Guyana Sugar Corporation.
That was in addition to the more than $1.8B that was already been provided to GuySuCo for additional inflows.
The Ministry of Agriculture received $125M which went to hydrometeorology and provided for additional inflows.
The Ministry of Public Works and Communication benefited from more than $700M for various projects that target sea defences, roads and government buildings.
The Ministry of Education under that second supplementary paper received an additional $573M in addition to the $497.7M it had already received for the BEAMS programme.
The Ministry of Housing at that time was provided with $400M as was expected, given that President Jagdeo had earlier in the year announced the Low Cost Housing programme revolving fund and the money has been identified for this purpose.
By Gary Eleazar
Finance Minister Dr Ashni Singh, by way of two supplementary papers tabled in the National Assembly, is seeking another $4,677,208,405 (the equivalent of US$25M) from the nation’s coffers.
Dr Singh yesterday tabled the documents asking that it be debated at the next sitting of the House.
According to financial paper three with the schedule of supplementary provision on the current and capital estimates totaling $2.2B, some $28M was allocated in the voted provision in this year’s budget, and now the Guyana Defence Force is gearing to receive another $22M for the extension of a fence at Camp Groomes on the Soesdyke Linden Highway.
The GDF is also slated for an additional $135M under ‘Legend’ fuel and lubricants and it is explained that the money is required to meet additional expenditure.
The Defence Force will also be receiving under the description “other” an additional $273.8M
And this too is listed to meet expenditure for joint operations.
Added to the $14.5M that was given to Office of the President for the purchase of equipment another $5.6M is being requested.
The Public Works Ministry is also slated to benefit from some $1.2B in addition to the $67M it had already received.
Office of the President-Presidential Advisory is in line for a generous boost of $50M in addition to its original allocation of 413.6M.
The document that was tabled by Dr Singh stated that the money is to meet expenditure in relation to the Office of Climate Change and the Low Carbon Development Strategy.
The Agriculture sector is also slated for just under half off a billion dollars with $10M of that identified for hinterland communities affected by El Nino.
Included too in that sum is the $400M that will be going to the Guyana Rice Development Board which was announced earlier this year by head of State Bharrat Jagdeo to assist rice farmers.
Another $40M will be shared between the National Agriculture Research Institute and the New Guyana Marketing Corporation.
On the supplementary provision of the capital estimates on financial paper four, the Guyana Sugar Corporation will be the beneficiaries of another $1.4B in addition to the $1.8B for the construction of the packaging plant at Enmore.
The two papers make their way to the House shortly after the National Assembly approved more than $2B in addition to what was voted for in the 2009 Budget.
The Minister in August successfully tabled the First Schedule of Supplementary Provision on the current and Capital Estimates totaling $247.4 million for the period from July 16 to December 31 this year.
The monies requested at that time for current estimates included funds for the Amerindian Affairs Ministry for items such as rental of buildings, print and non print materials, fuel and lubricants, vehicles spares and services, other transport travel and postage, electricity charges, training (including Scholarships) and another item line named ‘other’.
As it relates to the rental of buildings, no money was voted for in the budget and the Finance Minister had sought some $2.5M on their behalf.
For the Ministry of Health, in addition to the $7.3M voted for the maintenance of buildings, an additional $30M was received and it is said to be used for the refurbishing of offices, electrical installation and plumbing to existing buildings to house staff of the Ministry of Health that formerly occupied the building that was destroyed by fire.
Under the Agency, Guyana Defence Force Defence Headquarters, below the description of ‘other’ an initial $350,000 was voted and another $115M was sought to meet expenditure for joint operations.
Under capital estimates, a total of $93.9M was allocated to the Ministries of Foreign Affairs, Amerindian Affairs and Education.
There was also the second supplementary provision paper for the period ending yesterday for $2.5B.
Out of that the Finance Ministry secured some $473M for the Guyana Sugar Corporation.
That was in addition to the more than $1.8B that was already been provided to GuySuCo for additional inflows.
The Ministry of Agriculture received $125M which went to hydrometeorology and provided for additional inflows.
The Ministry of Public Works and Communication benefited from more than $700M for various projects that target sea defences, roads and government buildings.
The Ministry of Education under that second supplementary paper received an additional $573M in addition to the $497.7M it had already received for the BEAMS programme.
The Ministry of Housing at that time was provided with $400M as was expected, given that President Jagdeo had earlier in the year announced the Low Cost Housing programme revolving fund and the money has been identified for this purpose.
Tuesday, December 1, 2009
Crime is the main deterrent to investment in Guyana - AFC
Kaieteur News news item, Tuesday 01 December 2009 - "Crime is the main deterrent to investment in Guyana - AFC" - http://www.kaieteurnewsonline.com/2009/12/01/crime-is-the-main-deterrent-to-investment-in-guyana-afc/
Opposition parliamentary party, the Alliance For Change (AFC) is insisting that crime is the main deterrent to investments in Guyana.
This is despite claims otherwise by the ruling People’s Progressive Party (PPP).
General Secretary of the People’s Progressive Party, Donald Ramotar, has described the AFC’s negative position on investors coming into Guyana as “absolute nonsense.”
Ramotar opined that even though there should be more investors entering Guyana, the absence of large scale investors “has to do with infrastructure”.
This was a response to Chief Executive Officer of the AFC, Peter Ramsaroop, who had said that the current crime situation and general absence of rule of law are warding off any massive investments in the agriculture sector.
Yesterday, the AFC maintained its position. The party said it sees the Diaspora as a key resource for skills, ideas and investments for the development of Guyana.
“The Diaspora is most influenced by crimes. Importantly also, the Diaspora is influenced by the fact that too many crimes/murders are never solved and too few criminals are convicted,” the AFC stated.
These important and valuable Guyanese will never return home as long as there is no credibility in the police, the AFC added.
Crimes also retard business formation, the party said, while it was noted that drug dealers can launder funds while legitimate businesses must borrow from the commercial banks at 15% interest rate.
“Legitimate business folks have also been threatened and killed by the drug pushers,” the AFC claimed.
Crime, the party stated, also destroys and corrupts key institutions that are needed for development; such as the legal institutions.
“Investments are retarded because of the lack of strong laws and the enforcement of these laws. Take for instance the infringement of copyright in Guyana. It has killed the creative and cultural industries. Why write a poem, a song or story when others will abuse them?”
The party said serious crimes also force our people to migrate.
“Many of these Guyanese are educated, technically skilled, investors and entrepreneurs. Therefore, crimes lead to shortage of investors/risk-takers and depletes our human capital,” the AFC stated.
The AFC is of the view that the following are the key binding constraints that impede investments in Guyana: (i) Lack of infrastructure (energy and other infrastructure like farm to market roads). (ii) Lack of reasonable financing. (iii) Crime and the lack of credibility within the police force. (iv) A severe shortage of human capital. (v) Lack of suitable institutions/laws (and the enforcement of these laws) that can stimulate the creative and cultural industries. (vi) A limited role and focus on research and development.
Opposition parliamentary party, the Alliance For Change (AFC) is insisting that crime is the main deterrent to investments in Guyana.
This is despite claims otherwise by the ruling People’s Progressive Party (PPP).
General Secretary of the People’s Progressive Party, Donald Ramotar, has described the AFC’s negative position on investors coming into Guyana as “absolute nonsense.”
Ramotar opined that even though there should be more investors entering Guyana, the absence of large scale investors “has to do with infrastructure”.
This was a response to Chief Executive Officer of the AFC, Peter Ramsaroop, who had said that the current crime situation and general absence of rule of law are warding off any massive investments in the agriculture sector.
Yesterday, the AFC maintained its position. The party said it sees the Diaspora as a key resource for skills, ideas and investments for the development of Guyana.
“The Diaspora is most influenced by crimes. Importantly also, the Diaspora is influenced by the fact that too many crimes/murders are never solved and too few criminals are convicted,” the AFC stated.
These important and valuable Guyanese will never return home as long as there is no credibility in the police, the AFC added.
Crimes also retard business formation, the party said, while it was noted that drug dealers can launder funds while legitimate businesses must borrow from the commercial banks at 15% interest rate.
“Legitimate business folks have also been threatened and killed by the drug pushers,” the AFC claimed.
Crime, the party stated, also destroys and corrupts key institutions that are needed for development; such as the legal institutions.
“Investments are retarded because of the lack of strong laws and the enforcement of these laws. Take for instance the infringement of copyright in Guyana. It has killed the creative and cultural industries. Why write a poem, a song or story when others will abuse them?”
The party said serious crimes also force our people to migrate.
“Many of these Guyanese are educated, technically skilled, investors and entrepreneurs. Therefore, crimes lead to shortage of investors/risk-takers and depletes our human capital,” the AFC stated.
The AFC is of the view that the following are the key binding constraints that impede investments in Guyana: (i) Lack of infrastructure (energy and other infrastructure like farm to market roads). (ii) Lack of reasonable financing. (iii) Crime and the lack of credibility within the police force. (iv) A severe shortage of human capital. (v) Lack of suitable institutions/laws (and the enforcement of these laws) that can stimulate the creative and cultural industries. (vi) A limited role and focus on research and development.
Monday, November 30, 2009
Corrupt politicians and functionaries of the state
Corrupt politicians and functionaries of the state
Posted By Stabroek staff On November 27, 2009 @ 5:06 am In Business | No Comments
It is pretty clear from Transparency Internation-al’s 2009 Global Report on Corruption that the taking of bribes and kickbacks by politicians in developing countries is a well-established and institutionalized practice. In fact, even allowing for the kind of inexactitude that understandably derives from estimates, the figure of between US$20 million and US$40 million is staggering. These sums, the TI report says, must be shared by public officials, expeditors of one sort or another, public officers of limited means who are in fact that people that administer those state services for which people are prepared to pay.
So endemic has corruption become in some countries – frequently, the poorer they are the more corrupt their politicians and public officials tend to be – that some aspiring politicians have actually been known to make significant “investments” in finding themselves in positions of influence. Politicians’ substantive pay is not usually anything to shout about. The “bonus,” the kickback worth several times the salaries of politician lies in the fact that their position of influence allows for the selling of state services at bumper prices. The significance of this, of course, is that it raises serious questions about the motives of so many politicians who use the hustings to proffer altruistic motives for seeking election when in fact their only real motive is to plunder the state.
Over time we in Guyana have come to know of several notorious cases of corrupt politicians in other countries who fabulously enriched themselves at the expense of the state – Jean Bedel Bokassa of the Central African Republic and Mobutu Sese Seko of Zaire come readily to mind. Both are said to have plundered their countries mostly by simply possessing state assets and the former, having sufficiently enriched, then assumed the title Emperor Bokassa 1.
In our part of the world we hear rather less of the exploits of corrupt politicians though in some cases patterns of conspicuous consumption and ‘good living’ coincide with entry into politics to provide a dead giveaway. Most of the corruption-related scandals are associated with relationships between public servants and businessmen, the former driven by considerations of both greed and poor pay and the latter by a preparedness to pay well mostly for the privilege of acquiring official favours and circumventing their obligations – mostly financial ones to the state.
An interesting feature of the 2009 TI Corruption Report is the extent to which it lays the blame at the door of the international business community for the scale of corruption in poor countries. Some businesses, it seems, place a high value on corrupting officers of the state and while their respective annual reports and accounts are unlikely to show it, there are numerous cases in which corrupt public servants are on the permanent payrolls of people in the various business communities. Here too, suspicions of corruption invariably envelop public servants whose life styles cannot be sustained on their public service salaries.
Much of this, of course, is familiar to Guyana. Corruption – mostly transactions involving state functionaries and businessmen – has become so commonplace that discussions on the issue tend to dwell on issues of scale rather than whether or not the practice actually exists. Those commentators with an interest in defending the status quo would of course contend that the scale of corrupt practices is rather less than is said to be the case though when one thinks of the opportunities for corrupt practices across the spectrum of state resources and services which are in demand, we can do more than speculate as to the real scale of corruption.
Then there is of course the issue of whether or not our state bureaucracies are not themselves tailor-made for corruption. One can find numerous examples of basic services – licenses, permits, certificates etc, the preparation of which is preceded by fairly routine procedures but the acquisition of which is enmeshed in thickets of bureaucracy that have the effect of inflating the value of these services and attaching bribes and kickbacks to their acquisition. Oddly enough, despite the fact that the complexity of these systems is often linked to corrupt practices, little if any effort is made to render them less complex. Who among us is not familiar with those state agencies that attract long queues, large crowds, endless delays and needless paperwork, all of which, deliberately or otherwise, are tailor-made for corrupt practices.
Interestingly, states on the whole have little appetite for the scandal associated with revelations of corruption, particularly when high officials including politicians are implicated. If finger pointing and suspicion often tends to go in the direction of persons in authority the blanket of guilt all to frequently descends on lesser functionaries who cost the political administration little or not political capital. This too is an issue with which we in Guyana are familiar. Considerations of mistrust hopelessly compromise the credibility of official investigations while suspicions about the veracity of corruption investigations are even more deeply entrenched by the frequent exoneration of those who, ironically, are best-positioned to become involved in corrupt practices.
All of this, of course, amounts to the further weakening of both the economic resilience and moral outlook of countries most prone to corruption. Not only are the state coffers plundered and national resources sold off but – particularly for ordinary people – the cost of living is literally and sometimes significantly inflated by a sudden and unplanned necessity to pay bribes for services provided by the state. From the standpoint of what is perhaps best described as national moral fibre there has long occurred a coming to terms with the reality of bribery and corruption, the acceptance of the practice of kickbacks and backhanders as a norm rather than an aberration. That, perhaps, is the most disturbing thing of all.
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/business/11/27/corrupt-politicians-and-functionaries-of-the-state/
Posted By Stabroek staff On November 27, 2009 @ 5:06 am In Business | No Comments
It is pretty clear from Transparency Internation-al’s 2009 Global Report on Corruption that the taking of bribes and kickbacks by politicians in developing countries is a well-established and institutionalized practice. In fact, even allowing for the kind of inexactitude that understandably derives from estimates, the figure of between US$20 million and US$40 million is staggering. These sums, the TI report says, must be shared by public officials, expeditors of one sort or another, public officers of limited means who are in fact that people that administer those state services for which people are prepared to pay.
So endemic has corruption become in some countries – frequently, the poorer they are the more corrupt their politicians and public officials tend to be – that some aspiring politicians have actually been known to make significant “investments” in finding themselves in positions of influence. Politicians’ substantive pay is not usually anything to shout about. The “bonus,” the kickback worth several times the salaries of politician lies in the fact that their position of influence allows for the selling of state services at bumper prices. The significance of this, of course, is that it raises serious questions about the motives of so many politicians who use the hustings to proffer altruistic motives for seeking election when in fact their only real motive is to plunder the state.
Over time we in Guyana have come to know of several notorious cases of corrupt politicians in other countries who fabulously enriched themselves at the expense of the state – Jean Bedel Bokassa of the Central African Republic and Mobutu Sese Seko of Zaire come readily to mind. Both are said to have plundered their countries mostly by simply possessing state assets and the former, having sufficiently enriched, then assumed the title Emperor Bokassa 1.
In our part of the world we hear rather less of the exploits of corrupt politicians though in some cases patterns of conspicuous consumption and ‘good living’ coincide with entry into politics to provide a dead giveaway. Most of the corruption-related scandals are associated with relationships between public servants and businessmen, the former driven by considerations of both greed and poor pay and the latter by a preparedness to pay well mostly for the privilege of acquiring official favours and circumventing their obligations – mostly financial ones to the state.
An interesting feature of the 2009 TI Corruption Report is the extent to which it lays the blame at the door of the international business community for the scale of corruption in poor countries. Some businesses, it seems, place a high value on corrupting officers of the state and while their respective annual reports and accounts are unlikely to show it, there are numerous cases in which corrupt public servants are on the permanent payrolls of people in the various business communities. Here too, suspicions of corruption invariably envelop public servants whose life styles cannot be sustained on their public service salaries.
Much of this, of course, is familiar to Guyana. Corruption – mostly transactions involving state functionaries and businessmen – has become so commonplace that discussions on the issue tend to dwell on issues of scale rather than whether or not the practice actually exists. Those commentators with an interest in defending the status quo would of course contend that the scale of corrupt practices is rather less than is said to be the case though when one thinks of the opportunities for corrupt practices across the spectrum of state resources and services which are in demand, we can do more than speculate as to the real scale of corruption.
Then there is of course the issue of whether or not our state bureaucracies are not themselves tailor-made for corruption. One can find numerous examples of basic services – licenses, permits, certificates etc, the preparation of which is preceded by fairly routine procedures but the acquisition of which is enmeshed in thickets of bureaucracy that have the effect of inflating the value of these services and attaching bribes and kickbacks to their acquisition. Oddly enough, despite the fact that the complexity of these systems is often linked to corrupt practices, little if any effort is made to render them less complex. Who among us is not familiar with those state agencies that attract long queues, large crowds, endless delays and needless paperwork, all of which, deliberately or otherwise, are tailor-made for corrupt practices.
Interestingly, states on the whole have little appetite for the scandal associated with revelations of corruption, particularly when high officials including politicians are implicated. If finger pointing and suspicion often tends to go in the direction of persons in authority the blanket of guilt all to frequently descends on lesser functionaries who cost the political administration little or not political capital. This too is an issue with which we in Guyana are familiar. Considerations of mistrust hopelessly compromise the credibility of official investigations while suspicions about the veracity of corruption investigations are even more deeply entrenched by the frequent exoneration of those who, ironically, are best-positioned to become involved in corrupt practices.
All of this, of course, amounts to the further weakening of both the economic resilience and moral outlook of countries most prone to corruption. Not only are the state coffers plundered and national resources sold off but – particularly for ordinary people – the cost of living is literally and sometimes significantly inflated by a sudden and unplanned necessity to pay bribes for services provided by the state. From the standpoint of what is perhaps best described as national moral fibre there has long occurred a coming to terms with the reality of bribery and corruption, the acceptance of the practice of kickbacks and backhanders as a norm rather than an aberration. That, perhaps, is the most disturbing thing of all.
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/business/11/27/corrupt-politicians-and-functionaries-of-the-state/
“Small and medium enterprises: challenges in combating corruption
“Small and medium enterprises: challenges in combating corruption
Posted By Stabroek staff On November 27, 2009 @ 5:02 am In Business | No Comments
By Elaine Burns
Small and medium enterprises (SMEs) are of huge importance to the global economy, representing over 95 per cent of businesses worldwide and even more than 99 per cent of the business sector in countries such as Belgium, Greece, Italy and South Korea. Operating, as many do, in difficult developing markets and supporting major industries as crucial links in their supply chains, SMEs are vulnerable to the threat of corruption. As a European Bank for Reconstruction and Development (EBRD)/World Bank survey has revealed, more than 70 per cent of SMEs perceive corruption as an impediment to their business, compared to around 60 per cent of large companies.
What can an SME do to avoid bribery when a customs official demands a bribe in order to allow the import of a perishable product? Where can a supplier get help when the buyer for a major retailer expects ‘encouragement’ when awarding contracts? Assisting SMEs to resist corruption is an essential component of any comprehensive anti-corruption initiative and can prevent them from becoming the weakest link.
SMEs can be as small as a sole trader or a family business of twenty, but they can also reach the size of a company with several hundred employees. Each of these categories of SME, however, whatever its size or structure, faces four main challenges, albeit to varying extents.
* It is possible that the culture of bribery may be so much a part of the business scene that SMEs are under pressure to submit or fail. In some contexts bribery may be seen as just another business device, a necessary short cut that would be an overwhelming challenge to the company to counter. A business run on bribery is not only acting illegally, however, but also exposing itself to penalties. Such vulnerabilities can further increase the pressure on SMEs to succumb to the demands of corruption.
* SMEs may often not recognise or understand the complexities or grey areas of corruption. There may be uncertainty as to when a gift or entertainment is intended as inducement; when a donation to a political party or charity might be used as a bribe; and what the consequences of undetected conflicts of interest could be. An OECD analysis of some major export countries, for example, reports that even when SMEs represented the majority of exporting businesses they still tended to be poorly informed about anti-bribery laws.
* Limited resources are also a major challenge. The amount of people, time and money needed to create anti-bribery programmes will generally be more restricted than in larger organisations, but there is already considerable pressure on many SMEs just to make enough profit to survive, let alone find additional resources to resist corruption.
* SMEs have little support when dealing with extortion – demands for money, goods or services – and as a result they are often unable to offer much resistance. While there may be good intentions and good practice among many SMEs, there are few networks of support for such organisations and little consistency in anti-bribery measures.
In order to meet the specific challenges above, SMEs need to be made aware of the clear margins of corruption, be provided with knowledge on how to resist it and be supported in doing so. As an incentive to resist bribery, businesses need to understand the damage that it causes – such as loss of control and reputation and potential penalties and convictions – as well as recognise that the money paid in bribes has a direct impact on the economic availability of companies, by eating away at the bottom line. Furthermore, as the wider business environment becomes more aware of the risks involved in corruption, SMEs need to catch up: a reputation for integrity and anti-bribery activism is becoming increasingly important in making companies attractive to financial institutions and in the selection processes for becoming part of supply chains for larger companies.
As such, it is essential that SMEs begin tackling the issue of corruption in a concerted and coordinated fashion. In order to do this, they will need support from governments, primarily through the committed enforcement of anti-bribery legislation, and also from government procurement agencies, which can establish integrity pacts for bidders and contractors as agreements on transparency and accountability prior to entering into contracts with SMEs. Incentives from banks, such as a favourable interest rate for businesses that have implemented anti-bribery plans, could also encourage SMEs to invest in anti-corruption initiatives. Importantly, assistance from large companies, which can use their experience in supporting their suppliers through training and resources, would help SMEs prepare for bribery situations.
There is also assistance being offered by civil society. Transparency International has recently developed a tool for use by SMEs that sets out clear guidance and gives practical examples of the issues involved and how to set up an anti-bribery programme.
Bribery can also be resisted in imaginative, cost-effective ways. In some countries, SMEs have formed cooperatives in order to fight corruption through mutual support and by developing their own collective anti-corruption plans. When one voice may be insubstantial or ineffective, many are strong. In another initiative, sponsored by the Danish International Development Agency through the Confederation of Tanzanian Industries, SMEs in Tanzania fought back against fraudulent tax demands by referring them to a dedicated phone number manned by a small staff who deluged callers with questions concerning the demands, requiring names, reference numbers, department heads and telephone numbers, until the scam eventually stopped, drowned out by the detai1. With all this activity, the OECD statement in its Anti-Bribery Convention, that ‘corruption is no longer business as usual’, is starting to become more convincing, even in the complex environment in which SMEs work.?
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/business/11/27/%e2%80%9csmall-and-medium-enterprises-challenges-in-combating-corruption/
Posted By Stabroek staff On November 27, 2009 @ 5:02 am In Business | No Comments
By Elaine Burns
Small and medium enterprises (SMEs) are of huge importance to the global economy, representing over 95 per cent of businesses worldwide and even more than 99 per cent of the business sector in countries such as Belgium, Greece, Italy and South Korea. Operating, as many do, in difficult developing markets and supporting major industries as crucial links in their supply chains, SMEs are vulnerable to the threat of corruption. As a European Bank for Reconstruction and Development (EBRD)/World Bank survey has revealed, more than 70 per cent of SMEs perceive corruption as an impediment to their business, compared to around 60 per cent of large companies.
What can an SME do to avoid bribery when a customs official demands a bribe in order to allow the import of a perishable product? Where can a supplier get help when the buyer for a major retailer expects ‘encouragement’ when awarding contracts? Assisting SMEs to resist corruption is an essential component of any comprehensive anti-corruption initiative and can prevent them from becoming the weakest link.
SMEs can be as small as a sole trader or a family business of twenty, but they can also reach the size of a company with several hundred employees. Each of these categories of SME, however, whatever its size or structure, faces four main challenges, albeit to varying extents.
* It is possible that the culture of bribery may be so much a part of the business scene that SMEs are under pressure to submit or fail. In some contexts bribery may be seen as just another business device, a necessary short cut that would be an overwhelming challenge to the company to counter. A business run on bribery is not only acting illegally, however, but also exposing itself to penalties. Such vulnerabilities can further increase the pressure on SMEs to succumb to the demands of corruption.
* SMEs may often not recognise or understand the complexities or grey areas of corruption. There may be uncertainty as to when a gift or entertainment is intended as inducement; when a donation to a political party or charity might be used as a bribe; and what the consequences of undetected conflicts of interest could be. An OECD analysis of some major export countries, for example, reports that even when SMEs represented the majority of exporting businesses they still tended to be poorly informed about anti-bribery laws.
* Limited resources are also a major challenge. The amount of people, time and money needed to create anti-bribery programmes will generally be more restricted than in larger organisations, but there is already considerable pressure on many SMEs just to make enough profit to survive, let alone find additional resources to resist corruption.
* SMEs have little support when dealing with extortion – demands for money, goods or services – and as a result they are often unable to offer much resistance. While there may be good intentions and good practice among many SMEs, there are few networks of support for such organisations and little consistency in anti-bribery measures.
In order to meet the specific challenges above, SMEs need to be made aware of the clear margins of corruption, be provided with knowledge on how to resist it and be supported in doing so. As an incentive to resist bribery, businesses need to understand the damage that it causes – such as loss of control and reputation and potential penalties and convictions – as well as recognise that the money paid in bribes has a direct impact on the economic availability of companies, by eating away at the bottom line. Furthermore, as the wider business environment becomes more aware of the risks involved in corruption, SMEs need to catch up: a reputation for integrity and anti-bribery activism is becoming increasingly important in making companies attractive to financial institutions and in the selection processes for becoming part of supply chains for larger companies.
As such, it is essential that SMEs begin tackling the issue of corruption in a concerted and coordinated fashion. In order to do this, they will need support from governments, primarily through the committed enforcement of anti-bribery legislation, and also from government procurement agencies, which can establish integrity pacts for bidders and contractors as agreements on transparency and accountability prior to entering into contracts with SMEs. Incentives from banks, such as a favourable interest rate for businesses that have implemented anti-bribery plans, could also encourage SMEs to invest in anti-corruption initiatives. Importantly, assistance from large companies, which can use their experience in supporting their suppliers through training and resources, would help SMEs prepare for bribery situations.
There is also assistance being offered by civil society. Transparency International has recently developed a tool for use by SMEs that sets out clear guidance and gives practical examples of the issues involved and how to set up an anti-bribery programme.
Bribery can also be resisted in imaginative, cost-effective ways. In some countries, SMEs have formed cooperatives in order to fight corruption through mutual support and by developing their own collective anti-corruption plans. When one voice may be insubstantial or ineffective, many are strong. In another initiative, sponsored by the Danish International Development Agency through the Confederation of Tanzanian Industries, SMEs in Tanzania fought back against fraudulent tax demands by referring them to a dedicated phone number manned by a small staff who deluged callers with questions concerning the demands, requiring names, reference numbers, department heads and telephone numbers, until the scam eventually stopped, drowned out by the detai1. With all this activity, the OECD statement in its Anti-Bribery Convention, that ‘corruption is no longer business as usual’, is starting to become more convincing, even in the complex environment in which SMEs work.?
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/business/11/27/%e2%80%9csmall-and-medium-enterprises-challenges-in-combating-corruption/
Corruption can be reduced by reducing closed-door approvals for state services – GCCI President
Corruption can be reduced by reducing closed-door approvals for state services – GCCI President
Posted By Stabroek staff On November 27, 2009 @ 5:08 am In Business | No Comments
- says procedures must be driven by transparency
— will engage Customs on any chamber member corruption-related concern
Simplification and transparency of systems and procedures within state agencies that provide important services can go a far way towards reducing the level of corruption in the relationships between those state agencies and the people seeking their services. “We need to make changes to complex systems. We need to make them simpler, more transparent, more accessible, President of the Georgetown Chamber of Commerce and Industry (GCCI) Chandradat Chintamani.
The GCCI President was at the time providing an invited comment to a question raised by this newspaper regarding the assertion in the recently published 2009 Transparency International Global Corruption Report regarding the collection of billions of dollars in bribes and kickbacks by politicians and public servants from businessmen seeking various services from the state.
Georgetown Chamber of Commerce and Industry (GCCI) Chandradat Chintamani [1]
Georgetown Chamber of Commerce and Industry (GCCI) Chandradat Chintamani
And according to Chintamani, state systems and procedures that are particularly vulnerable to corrupt practices must rely to a greater extent on technology that minimizes human intervention. “We need to enhance the use of technology. We need to reduce our dependence on sustained involvement and intervention by people. The truth of the matter that where there is involvement by people in these processes we become vulnerable to corrupt practices,” Chintamani said.
The GCCI President told Stabroek Business that he believed his views on the increased application of technology in state-run service systems was particularly relevant tothe Customs and Trade Administration which is widely believed to be particularly vulnerable to corrupt practices involving Customs officials and businessmen.
“I have said before that as far as Customs is concerned we should consider finding an area on each wharf where surveillance systems can be set up to monitor the processing of containers of cargo,” Chintamani said. “What this does is to create a system that allows for monitoring from an office. The process allows you to see what is inside the container from where you are so that you are in a position to provide quicker clearance. I believe that what this does is to lay the system open, to lay it bare. The room for corruption is created when you have two or three persons sitting behind closed doors making decisions about the clearance of goods.”
Meanwhile, Chintamani told Stabroek Business that he believed the allusion in the Transparency International Report to the complicity of businessmen in the bribes and kickbacks applied to some transactions here in Guyana. “Some of us in the private sector who may have to pay a liability of $2 million are prepared to pay bribes to the level of maybe $1.5 million. The preferable thing to do of course is to let that $2 million go to the state so that we can see that money utilized to the benefit of the country. Of course there is another side to this. There are some people who might question the way in which the money is used by the state. In such cases they would pay that bribe and simply close the door or the transaction.”
And while the GCCI President says he believes that there are still loopholes that can be closed in order to reduce the scale of corruption, he feels nonetheless, that some systems have been put in place within the Customs and Trade Administration “and within the wider GRA” to reduce the level of corrupt practices. “The process has improved tremendously. I can say this both as President of the Chamber and as a businessman. Within a few days of a container arriving it is processed and in my warehouse. A number of other members of the Chamber have also reported improvements in the quality of service that they receive from Customs.”
Meanwhile, Chintamani told Stabroek Business that he believed the issue of the payment of bribes and kickbacks for services provided by state agencies was “a significant challenge but one which we have to confront.” The Chamber President told Stabroek Business that the frequent pronouncements that have been made by President Bharrat Jagdeo on his administration’s posture towards corruption did not appear to be attended by speedy action. “I happen to believe that the President is sincere in his attitude to corruption. The problem is that it some times does not appear that the people whose job it is to close the door on corruption are acting in accordance with the wishes of the President,” he added.
Chintamani said he is prepared to approach the Guyana Revenue Authority on any corruption-related or other matter raised with the Chamber. “I am willing to take these issues up with the Customs. At the same time, however, I need to be careful that when I approach the head of the GRA he does not pull a file on the person who I am purporting to represent and point to irregularities in that person’s dealings with Customs.”
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/business/11/27/corruption-can-be-reduced-by-reducing-closed-door-approvals-for-state-services-gcci-president/
Posted By Stabroek staff On November 27, 2009 @ 5:08 am In Business | No Comments
- says procedures must be driven by transparency
— will engage Customs on any chamber member corruption-related concern
Simplification and transparency of systems and procedures within state agencies that provide important services can go a far way towards reducing the level of corruption in the relationships between those state agencies and the people seeking their services. “We need to make changes to complex systems. We need to make them simpler, more transparent, more accessible, President of the Georgetown Chamber of Commerce and Industry (GCCI) Chandradat Chintamani.
The GCCI President was at the time providing an invited comment to a question raised by this newspaper regarding the assertion in the recently published 2009 Transparency International Global Corruption Report regarding the collection of billions of dollars in bribes and kickbacks by politicians and public servants from businessmen seeking various services from the state.
Georgetown Chamber of Commerce and Industry (GCCI) Chandradat Chintamani [1]
Georgetown Chamber of Commerce and Industry (GCCI) Chandradat Chintamani
And according to Chintamani, state systems and procedures that are particularly vulnerable to corrupt practices must rely to a greater extent on technology that minimizes human intervention. “We need to enhance the use of technology. We need to reduce our dependence on sustained involvement and intervention by people. The truth of the matter that where there is involvement by people in these processes we become vulnerable to corrupt practices,” Chintamani said.
The GCCI President told Stabroek Business that he believed his views on the increased application of technology in state-run service systems was particularly relevant tothe Customs and Trade Administration which is widely believed to be particularly vulnerable to corrupt practices involving Customs officials and businessmen.
“I have said before that as far as Customs is concerned we should consider finding an area on each wharf where surveillance systems can be set up to monitor the processing of containers of cargo,” Chintamani said. “What this does is to create a system that allows for monitoring from an office. The process allows you to see what is inside the container from where you are so that you are in a position to provide quicker clearance. I believe that what this does is to lay the system open, to lay it bare. The room for corruption is created when you have two or three persons sitting behind closed doors making decisions about the clearance of goods.”
Meanwhile, Chintamani told Stabroek Business that he believed the allusion in the Transparency International Report to the complicity of businessmen in the bribes and kickbacks applied to some transactions here in Guyana. “Some of us in the private sector who may have to pay a liability of $2 million are prepared to pay bribes to the level of maybe $1.5 million. The preferable thing to do of course is to let that $2 million go to the state so that we can see that money utilized to the benefit of the country. Of course there is another side to this. There are some people who might question the way in which the money is used by the state. In such cases they would pay that bribe and simply close the door or the transaction.”
And while the GCCI President says he believes that there are still loopholes that can be closed in order to reduce the scale of corruption, he feels nonetheless, that some systems have been put in place within the Customs and Trade Administration “and within the wider GRA” to reduce the level of corrupt practices. “The process has improved tremendously. I can say this both as President of the Chamber and as a businessman. Within a few days of a container arriving it is processed and in my warehouse. A number of other members of the Chamber have also reported improvements in the quality of service that they receive from Customs.”
Meanwhile, Chintamani told Stabroek Business that he believed the issue of the payment of bribes and kickbacks for services provided by state agencies was “a significant challenge but one which we have to confront.” The Chamber President told Stabroek Business that the frequent pronouncements that have been made by President Bharrat Jagdeo on his administration’s posture towards corruption did not appear to be attended by speedy action. “I happen to believe that the President is sincere in his attitude to corruption. The problem is that it some times does not appear that the people whose job it is to close the door on corruption are acting in accordance with the wishes of the President,” he added.
Chintamani said he is prepared to approach the Guyana Revenue Authority on any corruption-related or other matter raised with the Chamber. “I am willing to take these issues up with the Customs. At the same time, however, I need to be careful that when I approach the head of the GRA he does not pull a file on the person who I am purporting to represent and point to irregularities in that person’s dealings with Customs.”
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/business/11/27/corruption-can-be-reduced-by-reducing-closed-door-approvals-for-state-services-gcci-president/
Economy firewall malfunctions
Economy firewall malfunctions
Posted By Christopher Ram On November 29, 2009 @ 5:11 am In Features, Sunday | 1 Comment
Business Page
Business Page is dedicated to providing objective information and opinion on issues of interest to the business community and the public at large. The articles in Business Page are prepared and contributed by Christopher Ram who is the Managing Partner of Ram & McRae, Chartered Accountants, Professional Service Firm. This and previous columns can be found at www.chrisram.net [1]
Part 2
Introduction
During the past week, I received the Bank of Guyana (BOG) Report for the first half of 2009 which the bank is required under the law to submit to the Minister of Finance. As usual the report is comprehensive, contains valuable economic data, is very professionally written and therefore considered generally quite reliable. I will take into account the contents of that report as I continue my review of the 2009 mid-year report of the Minister of Finance, but before doing so, let me draw attention to certain matters touched on last week that are also addressed in the BOG report.
Christopher Ram [2]
Christopher Ram
The first and perhaps the most important relates to performance of the economy in the first six months of the year. The Minister of Finance reported in unambiguous terms that the economy declined in 2009 by 1.4%, supporting this in Appendix A1 of his report, sourced to the Bureau of Statistics. The Bank of Guyana on the other hand, reports, both in narrative form and in a graph, a positive growth of an identical percentage and projects that the economy will “continue to grow during the second half of the year.”
There is an obvious conflict between the numbers and it is disappointing that the Minister of Finance did not detect the discrepancy on such a fundamental matter, given that the BOG’s half-year report is submitted to him. This failure suggests either gross carelessness, or, heaven forbid, that the Minister did not read the BOG report, both of which would be sad indeed. The country would no doubt expect a clarification from one or both of the parties responsible for these reports.
Another issue is the different approaches to inflation. While the BOG uses the identical percentage of 1.3% reported by the Minister of Finance, its report describes the inflation number specifically as the Georgetown Urban Consumer Price Index which is obviously different from a national inflation rate. The Minister of Finance on the other hand, was not as specific and importantly, gave only an estimate of inflation, inevitably inviting speculation about the margin of error.
In last week’s column, there was a comment that sugar was becoming the scapegoat for the poor performance of the economy with its field workers being increasingly blamed not only for the industry’s, but also the country’s economic woes. The BOG report offers some perspective. While the number of work stoppages increased by 22.9% to 102 from 83 in the corresponding period last year, the number of man days lost was only 18,785 compared with 33,389 in half-year 2008, a 44% drop in production days lost.
The BOG also informs us that exports to the European Union accounted for 97.5% of Guysuco’s exports, up from 91.7% in 2008. For all the noise that the President made about the EPA and its adverse effects on sugar prices, our dependence on the EU market in 2009 was practically total, despite the corporation’s attempt at market diversification. It would seem unfair to place that at the feet of the field workers.
Expenditure
When the 2009 National Budget was presented earlier this year it was followed by the usual chorus of the biggest budget ever, no consideration given to the absorptive capacity of the economy. Business Page of November 16 last year in commenting on the expenditure side of the 2008 mid-year report, noted that it was “a matter of speculation why only 38% of the full year budget has been expended on what a table in the report described as key sectors.” That column went on to draw attention to the Health, Infrastructure and Agriculture sectors where only 41%, 27% and 33% respectively, had been spent in the first half of the year and asked whether the country was “going to see a mad and irresponsible rush to spend during the second half of the year, simply because the money has been allocated.” That indeed is what appears to have taken place in 2008.
Mid-year expenditure of Key Sectors – G$ million
20091129table [3]
Source: Mid Year Report 2009
Note: H1 refers to the first six months.
As the table above shows, we are faced with a very similar situation in 2009, even as the number of sectors identified as “key” is reduced from nine in 2008 to five in 2009. Those excluded this year are Culture, Office of the President, Public Service Ministry and Social Welfare for which billions were allocated in the 2009 Budget. The Minister’s report did not indicate why he considered that these were no longer “key” and his discussion was therefore more than limited in this regard. In 2008 the expenditure on the Minister’s key sectors in 2008 accounted for 37% of the full-year budget allocation, compared with 34.6% this year. Yet, the Minister did not think it necessary to make any significant adjustment to the full-year projections, in fact marginally increasing the total non-interest budget expenses for the full year. If technical and administrative skills are regarded as critical to delivering on the 2009 Budget programmes, it is difficult to see how those programmes could be achieved given that there is no greater implementation capacity in the second half 2009 than in the first half.
Many of the numbers speak for themselves but with all the contracts being awarded, the almost daily appearances in the press of some of the ministers and the extent to which we have committed the country to borrowings, it is difficult to understand the low spending on these sectors, particularly given that several line items are of a fixed and constant nature. To put the figures in context, it means that Agriculture would have to spend in the current half of 2009 four dollars for every dollar spent in the first half. The same applies to Infrastructure, while for Education and Housing and Water it is a more modest $1.5 for every dollar.
The drug bonanza
Health is interesting. Successive annual reports from the Audit Office remind us that cabinet has hand-picked for unlawful but very lucrative, multi-billion procurement contracts to supply the government with drugs and medical supplies, one of the companies of the Ramroop Group, with which President Jagdeo announced he has a friendly relationship and for which new tax concession laws were passed in 2008. As if the selection by the President’s cabinet were not enough, the government makes up-front payment on those contracts. Perhaps not surprisingly therefore, of the $2.5 billion budgeted for Drugs and Medical Supplies, 66.5 % was spent in the first six months of the year, up from 53% for the corresponding period in 2008.
With this kind of abuse, the government ought not to be surprised that Guyana is ranked at 126 among 180 countries listed in the Transparency International (TI) Report, along with seven other countries that include war-ravaged countries such as Eritrea, Ethiopia, Honduras, Mozambique and Uganda. The government’s protestations about TI’s methodology would have credibility and resonance if the country was convinced that it had any interest in halting the abuses attendant on the procurement of drugs and other products and services and the Lotto funds, pursuing those who contribute to its party while engaging in the worst forms of corruption of revenue officers, keeping its promise on a Freedom of Information Act and observing good governance and the rule of law in all their forms and manifestations.
With corruption and the absence of any culture of accountability and transparency in religion, the trade union movement, civil society, the private and NGO sectors, the political parties, sports, in national and local government – in short in every area of life – many Guyanese find it hard to believe that there are countries more corrupt than Guyana. The fact is, however, that there are and we need to ensure that we do not slip further to the bottom. Like the rotting of the fish, the disintegration from corruption begins at the head.
Bloating the public sector
Another interesting line item is what is referred to in Appendix E4 to the Mid-year Report as Contracted Employees. There too we have spending very much on track as the government selectively employs more and more persons at the public expense. The 2009 Budget allocation for wages and salaries of contracted employees is $3.2 billion which the Minister projects will be exceeded, no doubt because more than 50% has already been spent in the first six months of the year. The Office of the President in particular now has a number of advisers and consultants, some of whose designations and functions are by no means clear, and who seem to be paid either for their past service to the party or to do political work on behalf of the party. The contracted employees do not come cheap. Some of them are paid in real currency, have 24-hour security, chauffeur, administrative support, enjoy valuable tax and duty concessions – all paid for by the poor taxpayers or financed by the donors who seem to be salivating at the prospect of giving to a poor country.
How much of the further $2.2 billion dollars in benefits and allowances goes to the contracted employees is not determinable but what is interesting is that the wages and salaries of the contracted employees exceeds that of the total administrative staff of the central government by more than 15%. And it is because of these contracted employees including permanent secretaries, many politically appointed, that the Public Service Commission is becoming increasingly sidelined and irrelevant. Is it because of the chauffeur-driven and state-provided vehicles that the Public Service Ministry has not seen it fit or necessary to revise the 1995 rates of travel allowances paid to public officers, many of them lower level operatives not important to the new order governing public finances in the country?
To be continued
1 Comment (Open | Close)
1 Comment To "Economy firewall malfunctions"
#1 Comment By tkhemraj On November 29, 2009 @ 10:19 am
Mr Ram,
I will make sure I save these columns for history. You have done a remarkable job to show how the PPP has exceeded PNC level corruption. Well done!
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/features/11/29/economy-firewall-malfunctions/
Posted By Christopher Ram On November 29, 2009 @ 5:11 am In Features, Sunday | 1 Comment
Business Page
Business Page is dedicated to providing objective information and opinion on issues of interest to the business community and the public at large. The articles in Business Page are prepared and contributed by Christopher Ram who is the Managing Partner of Ram & McRae, Chartered Accountants, Professional Service Firm. This and previous columns can be found at www.chrisram.net [1]
Part 2
Introduction
During the past week, I received the Bank of Guyana (BOG) Report for the first half of 2009 which the bank is required under the law to submit to the Minister of Finance. As usual the report is comprehensive, contains valuable economic data, is very professionally written and therefore considered generally quite reliable. I will take into account the contents of that report as I continue my review of the 2009 mid-year report of the Minister of Finance, but before doing so, let me draw attention to certain matters touched on last week that are also addressed in the BOG report.
Christopher Ram [2]
Christopher Ram
The first and perhaps the most important relates to performance of the economy in the first six months of the year. The Minister of Finance reported in unambiguous terms that the economy declined in 2009 by 1.4%, supporting this in Appendix A1 of his report, sourced to the Bureau of Statistics. The Bank of Guyana on the other hand, reports, both in narrative form and in a graph, a positive growth of an identical percentage and projects that the economy will “continue to grow during the second half of the year.”
There is an obvious conflict between the numbers and it is disappointing that the Minister of Finance did not detect the discrepancy on such a fundamental matter, given that the BOG’s half-year report is submitted to him. This failure suggests either gross carelessness, or, heaven forbid, that the Minister did not read the BOG report, both of which would be sad indeed. The country would no doubt expect a clarification from one or both of the parties responsible for these reports.
Another issue is the different approaches to inflation. While the BOG uses the identical percentage of 1.3% reported by the Minister of Finance, its report describes the inflation number specifically as the Georgetown Urban Consumer Price Index which is obviously different from a national inflation rate. The Minister of Finance on the other hand, was not as specific and importantly, gave only an estimate of inflation, inevitably inviting speculation about the margin of error.
In last week’s column, there was a comment that sugar was becoming the scapegoat for the poor performance of the economy with its field workers being increasingly blamed not only for the industry’s, but also the country’s economic woes. The BOG report offers some perspective. While the number of work stoppages increased by 22.9% to 102 from 83 in the corresponding period last year, the number of man days lost was only 18,785 compared with 33,389 in half-year 2008, a 44% drop in production days lost.
The BOG also informs us that exports to the European Union accounted for 97.5% of Guysuco’s exports, up from 91.7% in 2008. For all the noise that the President made about the EPA and its adverse effects on sugar prices, our dependence on the EU market in 2009 was practically total, despite the corporation’s attempt at market diversification. It would seem unfair to place that at the feet of the field workers.
Expenditure
When the 2009 National Budget was presented earlier this year it was followed by the usual chorus of the biggest budget ever, no consideration given to the absorptive capacity of the economy. Business Page of November 16 last year in commenting on the expenditure side of the 2008 mid-year report, noted that it was “a matter of speculation why only 38% of the full year budget has been expended on what a table in the report described as key sectors.” That column went on to draw attention to the Health, Infrastructure and Agriculture sectors where only 41%, 27% and 33% respectively, had been spent in the first half of the year and asked whether the country was “going to see a mad and irresponsible rush to spend during the second half of the year, simply because the money has been allocated.” That indeed is what appears to have taken place in 2008.
Mid-year expenditure of Key Sectors – G$ million
20091129table [3]
Source: Mid Year Report 2009
Note: H1 refers to the first six months.
As the table above shows, we are faced with a very similar situation in 2009, even as the number of sectors identified as “key” is reduced from nine in 2008 to five in 2009. Those excluded this year are Culture, Office of the President, Public Service Ministry and Social Welfare for which billions were allocated in the 2009 Budget. The Minister’s report did not indicate why he considered that these were no longer “key” and his discussion was therefore more than limited in this regard. In 2008 the expenditure on the Minister’s key sectors in 2008 accounted for 37% of the full-year budget allocation, compared with 34.6% this year. Yet, the Minister did not think it necessary to make any significant adjustment to the full-year projections, in fact marginally increasing the total non-interest budget expenses for the full year. If technical and administrative skills are regarded as critical to delivering on the 2009 Budget programmes, it is difficult to see how those programmes could be achieved given that there is no greater implementation capacity in the second half 2009 than in the first half.
Many of the numbers speak for themselves but with all the contracts being awarded, the almost daily appearances in the press of some of the ministers and the extent to which we have committed the country to borrowings, it is difficult to understand the low spending on these sectors, particularly given that several line items are of a fixed and constant nature. To put the figures in context, it means that Agriculture would have to spend in the current half of 2009 four dollars for every dollar spent in the first half. The same applies to Infrastructure, while for Education and Housing and Water it is a more modest $1.5 for every dollar.
The drug bonanza
Health is interesting. Successive annual reports from the Audit Office remind us that cabinet has hand-picked for unlawful but very lucrative, multi-billion procurement contracts to supply the government with drugs and medical supplies, one of the companies of the Ramroop Group, with which President Jagdeo announced he has a friendly relationship and for which new tax concession laws were passed in 2008. As if the selection by the President’s cabinet were not enough, the government makes up-front payment on those contracts. Perhaps not surprisingly therefore, of the $2.5 billion budgeted for Drugs and Medical Supplies, 66.5 % was spent in the first six months of the year, up from 53% for the corresponding period in 2008.
With this kind of abuse, the government ought not to be surprised that Guyana is ranked at 126 among 180 countries listed in the Transparency International (TI) Report, along with seven other countries that include war-ravaged countries such as Eritrea, Ethiopia, Honduras, Mozambique and Uganda. The government’s protestations about TI’s methodology would have credibility and resonance if the country was convinced that it had any interest in halting the abuses attendant on the procurement of drugs and other products and services and the Lotto funds, pursuing those who contribute to its party while engaging in the worst forms of corruption of revenue officers, keeping its promise on a Freedom of Information Act and observing good governance and the rule of law in all their forms and manifestations.
With corruption and the absence of any culture of accountability and transparency in religion, the trade union movement, civil society, the private and NGO sectors, the political parties, sports, in national and local government – in short in every area of life – many Guyanese find it hard to believe that there are countries more corrupt than Guyana. The fact is, however, that there are and we need to ensure that we do not slip further to the bottom. Like the rotting of the fish, the disintegration from corruption begins at the head.
Bloating the public sector
Another interesting line item is what is referred to in Appendix E4 to the Mid-year Report as Contracted Employees. There too we have spending very much on track as the government selectively employs more and more persons at the public expense. The 2009 Budget allocation for wages and salaries of contracted employees is $3.2 billion which the Minister projects will be exceeded, no doubt because more than 50% has already been spent in the first six months of the year. The Office of the President in particular now has a number of advisers and consultants, some of whose designations and functions are by no means clear, and who seem to be paid either for their past service to the party or to do political work on behalf of the party. The contracted employees do not come cheap. Some of them are paid in real currency, have 24-hour security, chauffeur, administrative support, enjoy valuable tax and duty concessions – all paid for by the poor taxpayers or financed by the donors who seem to be salivating at the prospect of giving to a poor country.
How much of the further $2.2 billion dollars in benefits and allowances goes to the contracted employees is not determinable but what is interesting is that the wages and salaries of the contracted employees exceeds that of the total administrative staff of the central government by more than 15%. And it is because of these contracted employees including permanent secretaries, many politically appointed, that the Public Service Commission is becoming increasingly sidelined and irrelevant. Is it because of the chauffeur-driven and state-provided vehicles that the Public Service Ministry has not seen it fit or necessary to revise the 1995 rates of travel allowances paid to public officers, many of them lower level operatives not important to the new order governing public finances in the country?
To be continued
1 Comment (Open | Close)
1 Comment To "Economy firewall malfunctions"
#1 Comment By tkhemraj On November 29, 2009 @ 10:19 am
Mr Ram,
I will make sure I save these columns for history. You have done a remarkable job to show how the PPP has exceeded PNC level corruption. Well done!
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/2009/features/11/29/economy-firewall-malfunctions/
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