Corruption: a public-private partnership

Infamous Offenders
Even as a reconfigured parliament begins the slow but necessary process of forcing changes to the bad management practices of the government and bringing increased accountability to the use of public funds, Guyanese must again endure the embarrassment of being among some of the worst perpetrators of corruption.  The most recent report of Transparency International (TI) leaves Guyana in the company of some infamous offenders of accountability and among countries with bad reputations in the world.  With its revelation that Guyana has not lifted itself up from the lower rungs of the corruption ladder, the TI report could not come at a better time for the Public Accounts Committee (PAC) of the Guyana Parliament which is currently engaged in the review of a series of reports of the Auditor-General as part of its oversight responsibility.  The report reminds us of what a serious problem Guyana has in handling its public finances.

The convergence of what is emerging as a serious review of the public accounts by the PAC and the release of the TI report with its assertions about corruption in the public sector should assure Guyanese that good things are beginning to happen as a result of their decision at the polls November 28 last year to create a divided government.  As unglamorous as it might be, the current work of the PAC might help Guyanese to understand that corruption is not necessarily the actions of one bad person, but unauthorized market transactions involving members of the public and the private sector.  It involves money or favours in exchange for goods or services.  Corruption in the public sector is in effect a public-private partnership.

Grievous Consequences
Corruption has been flourishing with grievous consequences for the rewards of labour, equity in income, stability in the cost of living, as well as for life and limb.  According to Professor Clive Thomas et al in their study of the underground economy of Guyana, the drivers of corruption in Guyana were many, but in recent years, the drivers were dominated by factors linked to the rise and influence of the narcotics trade, money laundering and the trafficking of persons.  The general conclusion of Professor Thomas and his colleagues was that more than one-third of the output of the Guyana economy was the result of improper or illegal activities.  That finding related to a time period as recent as 2008.  With the continuous interception of shipments of illegal drugs from Guyana since 2008 to the inexplicable export and loss of a whopping 476 pounds of gold in Curacao one week ago, the underground economy remains robust, and perhaps larger than estimated by the study.

High Profile Items
Moreover, the ease with which sizable quantities of high profile items like cocaine and gold could escape the attention of the responsible public officials expose the weaknesses of the country’s administration and undermine its repeated denials of the prevalence of corruption in Guyana.  It is indeed incomprehensible as to how the administration could make such claims while the evidence keeps popping up all around it.  Instead of trying to tackle the problem at the agency level, it seeks to put the blame at the feet of politics.  Linked to this unfortunate situation is the apparent inability or unwillingness of the Guyana Police Force and the judicial system to do a better job at deterring corruption. Neither institution seems to be in a position to help bring the situation under control and to mete out punishment that has the ability to change behaviour. These failings of law enforcement are unfortunate and leave Guyanese insecure and vulnerable to suspicion, ridicule and mistreatment by countries.  Other manifestations of corruption are reflected in the unchecked recklessness of mini-bus drivers on the roadways of Guyana. Apart from overloading their buses with passengers, among which could be found persons dressed in police uniform, they drive their buses as if passengers have an assisted-suicide pact with them. Speed and wildness, things to be managed and controlled by the traffic police and judicial system, are commonplace among these drivers and continue unabated.  The general conclusion is that the unauthorized public-private exchange makes such unsatisfactory behavior possible.

Solving the Corruption Problem
Yet, there is hope now that Guyana can begin the task of seriously dealing with corruption and taking the necessary action to discourage it and dismantle the structures that support it.  The responsibility for taking action rests with the administration, but with strong oversight coming from the PAC, the intransigence for which the administration is famous becomes increasingly difficult to sustain.  For the first time in its 20 years of rule, the PPP/C led administration cannot ignore or mishandle the findings of the Auditor-General and the observations and conclusions of the PAC without fear of political reprisal.  Parliament has already signaled to the administration, with its action against the Minister of Home Affairs, that it will not tolerate intransigence or incompetence, factors that might be contributing to too many police running into trouble with the law.

Extravagant Taxi Bill
Now the PAC is adding its weight to the effort to strengthen accountability in the public sector.  Under the guidance of Carl Greenidge, the PAC has begun its review of the Auditor-General’s report.  No doubt that by the time the exercise is over, there will be many discoveries that will alarm the public.  Already, there is an extravagant taxi bill of the Ministry of Tourism that has caught the attention of the PAC and the public.  Even if the Ministry has invoices and receipts to prove that it used the taxi services, the volume of demand by the Ministry for transport services remains a legitimate question that should be answered to help validate the authenticity of its claims.  The magnitude of its demand for taxi services seems abnormally high.  Based on current taxi fares for drops around the city limits, the Ministry would have purchased an average of 79 drops per day in a 365-day work year.  In an 8-hour day, that is a consumption rate of 10 drops per hour.  The number of working days in Guyana is estimated at 261, given weekends and holidays.  This means that under such circumstances the Ministry would have purchased 122 taxi rides per day or 15 taxi rides per hour.  That is plentiful and leaves the public to wonder if the staff members of the Ministry are really public servants or tourists.

Big Favour
The reaction of the taxi services suggests that the public-private exchange does not always go good for everyone involved.  The taxi services are not under scrutiny by the PAC, yet the PAC’s work might be of benefit to them given that the public disclosure of the amount of money paid for transportation over a three-year period seems to surprise the three taxi services themselves.  Until an investigation takes place no one knows for sure what happened.  But, the PAC might have pointed the taxi services to a sub-plot that was centred in the taxi services and induced by poor internal controls.

Taxi drivers might be performing work for the Ministry under the name of the taxi service without making full disclosures to their management. Or, as some have pointed out, It might be a case of the taxi services ducking for cover from the tax authorities. The PAC might have done the taxi services a big favour.

Cautious Optimism
The PAC might not have the ability to bring charges against the administration, but it can force change in behavior through the limited tools of censure and surcharge that it has.  That is all the public might have to be satisfied with until the Public Procurement Commission is established.  Until such time, the public can replace its skepticism with cautious optimism now that the PAC is better equipped to perform its oversight responsibilities.

LUCAS STOCK INDEX

The Lucas Stock Index (LSI) gained 1.44 percent in the first week of trading in the month of December 2012 amidst mixed performance by the three stocks that traded this week.  The stocks of Guyana Bank for Trade and Industry (BTI) rose 10 percent while those of DDL declined 0.79 percent.  The stocks of Demerara Bank Limited (DBL) recorded no change from the previous trading session.  Notwithstanding the positive movement, the LSI remained below the 40 percentage point advantage that it enjoyed over the yield of the 364-day Treasury Bills.

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