In 2011 the IDB published a study on competitiveness in the Caribbean which concluded that tax rates, crime and theft, corruption and poor work ethics were the four most problematic factors holding back business in Guyana. At the time of the Tripartite meetings in December 2011, President Ramotar established a committee to consider calls for the
reduction of the VAT and to have a more equitable tax
Last Friday week (Nov 11) the Guyana Private Sector Commission spokesman expressed concern about the likely impact of parliamentary deadlock on national stability. ‘Politicians’ were called on to “put the national interest” above narrow party interests. This Friday, (26th) the President of the GCCI claimed that foreign investment in Guyana was being discouraged by politics and not crime.
The non-state actors (NSAs), which include the private sector, have throughout the modern era played a very important role in our development and our politicians accept that sustained growth requires a vibrant and enterprising business sector. Pronouncements on government policy have therefore always been accepted as part of the NSA role. Indeed, most of those pronouncements have been on matters of direct interest to the NSA and business sectors and they have often forced changes in policy by those interventions. In the rest of the region, however, the influence of these bodies has been far greater than in Guyana. It would be interesting to explore the reason for this anomaly.
The suggestion that foreign investors are straining at the leash and but for the politicians would carry us off into nirvana is silly. In addition to the competitiveness study I have already cited, there are dozens of studies on Guyana and on the post-1997 growth trough in which we have found ourselves. The IMF, World Bank, US and IDB have explored reasons for this state of affairs and they include low levels of investment (not only foreign) relative to GDP, a decline in the labour force, low expenditure on education (the lowest as a percentage of GDP in the region). While the government boasts a national illiteracy rate of 1%, the secondary school completion rate and mathematics performance scores are the lowest in the Caribbean. Guyana’s GDP loss due to emigration of skilled persons is more than thrice the monetary gains from remittances. Undeveloped infrastructure, including the absence of a deep water port, the fact that only 7.4% of all our roads are paved, and the most expensive and inefficient electricity services are also causes. There are, in addition, institutional problems and inability to marshal and analyse our data.
Secondly, it may well be true that many businessmen would be willing to invest in Guyana were it not for the politicians. Who, however, are those investors that would be less bothered by crime than by the politicians? Such foreign businessmen have been here before, in a manner of speaking, and have also helped to get many states in this region the title of ‘Banana Republics.‘
A people’s welfare is not about the wishes of foreign investors. It is about governance, it concerns the quality and phasing of the investment, the availability of supporting services, the rule of law and the discouragement of racism and discrimination, etc. It is about having people such as Roger Khan off the streets.
In the wake of the July 18 Linden killings I was invited to an informal chat with some representatives of the private sector. In response to a question about the utility or wisdom of trying to play such a role, I urged them to give careful thought to the topics on which they chose to offer advice. An honest broker, the role that non-state actors can play in the political arena, needs to be credible. Credibility does not result from trying to be clever by supporting one side with fine words that sound reasonable and unpartisan but which when examined closely reflect either ignorance of reality or are supportive of one party.
Political stability requires timely as well as balanced policies and it is indeed rare for a matter not to have a history. Stability is not a matter of having a silent or pliable opposition. In that sense the type of coded messages from private sector spokesmen wrapped up as an attack on politicians who have neither the national interest or more than their egos at heart and who are preventing economic progress can only be read as interventions in support of the government and PPP positions.
I have never heard of a government spokesman who did not argue that government policies would shortly lead to nirvana. The PPP regime has the presidency but a minority of votes and seats in the Parliament and therefore needs to consult with the majority. It cannot do as it wishes and should not try. The outcome of the 2011 general and regional elections clearly indicated that the electorate was fed up with their approach as well as the resultant crime and corruption. It was also fed up with a pliable opposition. The Parliament has a responsibility to pressure the government to implement policies that reduce, if not halt, the rate at which Guyanese are forced to leave these shores in search of better lives. Poor investment can compound our problems and the fact that it might originate with foreigners is not an advantage. We have countless examples of the PPP’s faith in foreigners being misplaced and not being based on any due diligence. The case of former New York City Police Commissioner Bernard Kerik found guilty of federal tax and wire-tapping conspiracy charges in the United States is only the most spectacular in a long series.
Businessmen and politicians, like musicians, need to be heedful of timing as well as place. If a traveller’s pocket has been picked by a stranger, it can hardly be helpful for an observer to call on the victim to refrain from using force to restrain the fellow passenger, the pickpocket, who is about to get off the bus. Such an intervention helps only one party because it is untimely and partial. It will benefit only the culprit! As the saying goes, ‘The road to hell is paved with good intentions.’ A mediator’s intervention based only on good intentions will not be welcome, let alone accepted.
In Guyana the PPP has committed itself to unfair competition, ignoring constitutional requirements and promotes deals in which the government refuses to consider any investment project unless some side deal involving one of theirs is involved. The spokesmen for the main private sector organizations are inclined to be silent in the face of such government abuse of power even when it harms their collective interest – the award of contracts to a few favoured individuals in defiance of the laws on procurement, the photocopying of textbooks and the infringement of copyright that it involves, etc. Instead of addressing those problems, they call for a peaceful climate which is in principle in everyone’s interest. But a little reflection will show that ignoring the action of the pickpocket while intervening to restrain the victim would merely facilitate further abuse and more importantly it undermines the peacemaker’s credibility.
Why has there been no private sector outcry against these practices? The answer is obvious. In too much of the private sector, the beneficiaries have no interest, victims are intimidated and the majority is too cynical about the usefulness of public statements. Those spokesmen who are not beneficiaries of the lawlessness of the PPP regime give cover to those who are. This is therefore not the voice of the entire business élite.
The problem in Guyana as regards the business sector is that the majority has allowed a few privileged persons and businesses to capture the leadership of their service. Can it be true that businesses are not concerned about crime, government corruption or the shooting of innocent people in Linden. Far from it. The political parties which all depend on business contributions to fund their activities have a large business constituency which has been calling for an end to lawlessness and corruption.
It is the same story with the leadership of Guyana’s cricket. The very people who have brought corruption, crime and violence to the noble sport seek to have the WICB ignore those crimes in the interest of getting a few games played in Guyana as quickly as possible.
The professed private sector position stands in marked contrast to that of the head of the T&T Transparency Institute, Mr Deryck Murray, a West Indies cricketing icon, who addressed the annual fund-raising dinner of the Guyana Transparency Institute last Friday evening. Murray urged the majority not to remain silent and not to entertain the types of contradictions which the speeches of the Guyana private sector spokesmen expose. He rejected the idea that the corruption we witness harms no-one.
Only, when the spokesmen for the sector are willing to speak out in the same forthright manner against government’s failure to honour the provisions of the constitution and abuse of tax collection powers, for example, will they be taken seriously. Most opposition politicians are fighting for the government to respect such rights.
Let me close with a few observations on the matter of economic growth and investment. Studies on competitiveness in Guyana – our ability to deliver goods and services and compete at reasonable prices in international markets – conclude that we are hampered by the widespread lack of transparency in decision-making, cumbersome policies, unnecessary bureaucratic procedures and stifling red tape. Studies on investment across the world and those on the Caribbean point to the need to respect the rule of law, uphold contracts, have reliable Deeds and Lands Registries, etc. The annual index on the Ease of Doing Business shows how poorly the PPP regime has performed on all the measured fronts. The same applies to governance. Guyana’s overall ranking fell from 101 in 2009 to 114 this year! Over the last year a big deterioration was experienced in indices for ‘starting a business’, ‘getting electricity’, ‘registering property’ and believe it or not, ‘paying taxes’. All of this should be of direct interest to the private sector. The national interest therefore requires them to call on the government to remedy these matters and bring the decline to a halt. Yet, I can recall seeing not a single comment from the GCCI or PSC, although the commission the President established to look into the tax regime has never met and the 2013 budget is in the course of preparation.
Only when the leaders of the Guyana private sector service agencies recognize the role of consistency and balance in their views, will they exercise the influence that their counterparts in the region and further afield exercise. In business, as in politics, the constituency eventually gets fed up with pliable leaders.
It is not my intention to be unkind to the business leaders but the circumstances of the politicians are not too dissimilar from their own.
Carl B Greenidge