Dear Editor,
The grim reports of alleged irregularities in relation to major projects as well as procurement have cost these projects legitimacy with great sections of the populace.
What is being drowned out in the cacophonous din is the meritorious value these projects have in the process of transforming our economy. This is unfortunate as what ought to be signature projects of national pride have become serious bones of contention. However, as with most, if not all, national political duels in post-independence Guyana, the root of the debate over these projects can be traced to the unfortunate bi-communal race conundrum in which Guyana finds itself.
To see how the political maelstrom can overshadow development considerations, take the large-scale procurement of drugs by the public health sector from the New GPC INC. Setting not unimportant finer elements of procurement procedures aside, any developing country worth its salt would certainly extend state patronage to local entrepreneurs engaging in higher-order economic activity, such as pharmaceuticals. An economy stands to benefit greatly from the positive spillover effects of the research and development (R&D) activities of firms in its locale. While the value of such spillover effects may be difficult to quantify, they can be illustrated thus: pharmaceutical manufacturing techniques can be passed onto Amerindian communities, for example, so that they may process indigenous medicinal flora into marketable products.
Furthermore, Guyana is not the first to extend state patronage to sectors of strategic importance; economies across the spectrum have engaged in it. Brazil, for example, has strongly justified this position. In a statement quoted by the London Economist, Eike Batista, Brazil’s wealthiest man and its de facto salesman-in-chief, defended the Brazilian government’s mandate that the state-owned oil company, Petrobras, should buy its oil exploration kits locally.
Remarks Mr Batista, “You think Brazil can lose this chance and not build a ship industry?”
In addition to Brazil, China aggressively lends state support to its firms – in fact, one of the Chinese state’s prodigies, China Commun-ications Construction Company, has been nurtured into a global giant. Even the United States, a major advocate of free-market policy, uses a publicly-funded Export-Import Bank to underwrite international transactions undertaken by the American aerospace firm, Boeing.
However, as a result of its glacial pace in achieving acceptable levels of transparency, the government’s decision to procure from New GPC INC is not being seen as positive stimulus to a sector with tremendous productivity potential. Instead, the deal is being seen as a provision of enrichment opportunities to the New GPC CEO, an associate of the former head of state.
Meanwhile, as the drug procurement controversy continues to spiral, a similar hullabaloo over the proposed CJIA expansion works is underway. The upgrading of the Cheddi Jagan International Airport entails a significant extension of the runway, a new terminal building and eight new boarding gates. As this has been conceived, this upgrading stands to improve airlift, and at best, realize Guyana’s fabled prospect of being a hub and the gateway to South America.
From a technical and economic standpoint, the new runway would cater to large wide-bodied aircraft. As articulated by CHEC’s Senior Business Development Manager, Mr Colvin Heath-London, wide-bodied aircraft carry a larger payload relative to fuel consumption as compared to their smaller counterparts. What this means is that they can carry more passengers and cargo at a lower average cost than the smaller craft. Should these lower costs be passed on to passengers and traders, one logically anticipates that a larger volume of trade and travel will ensue.
The aforementioned direct economic benefits aside, an upgraded airport, and the concomitant expected facelift, will finally put the airport aesthetically on par with those in other Caricom states. The international airport is the first stop of any flying traveller to Guyana, and, as things stand, the comparatively unappealing façade fails to make an initial impression of Guyana’s modernity and developmental thrust. To investors and tourists, first impressions can be that psychological catalyst or damper.
Instead of a spotlight on all these economic possibilities, what we have is a distracting firestorm of criticism. This has been ignited by the government’s shirking of its obligations to exercise governance best practices of multi-stakeholder engagement before signing off on contracts of this magnitude. Such prior engagement would have averted the Shakespearean Comedy of Errors-style confusion that supervened when the contractor prematurely trumpeted its successful conclusion of the new deal with the Cooperative Republic to the Jamaican Observer before the Guyana Government got around to notifying the nation.
The government’s zealousness for secrecy has engendered a wave of quasi-hysteria and self-enrichment theses. Widely publicized ‘scandals,’ notably the Fip Motilall fiasco, have bred a broadly held perception that all projects are being executed to enrich a few government-linked special interest groups. What is worthy of note is that other than being a staple for media lore, the perception of rampant corruption and nepotism has gained traction in academic circles and found a niche in academic literature. More and more, the perception is being postulated and reproduced.
Editor, this adversarial state of our political economy, while bequeathed us through known US and British machinations, has been reinforced by lack of transparency, and it does have tangible consequences for our economy. For instance, with new charges of corruption and threats of accompanying probes and investigations, these projects’ realization become subject to a lot of uncertainty and risk which, as any economist would tell you, reduces their expected gains. In addition, the projects could be scrapped if hostilities persist and financiers and investors’ patience wears thin; for instance, the World Bank, citing charges of corruption, scrapped its US$1.2B line of credit to Bangladesh for the construction of a bridge.
And therein lies the government’s failing; though they may emphasize these projects’ legality, there remains a shroud over their legitimacy. Unless steps are taken to rectify governance issues and sell these projects within a comprehensive developmental framework, we will wind up with edifices that will not be seen as boons to the transformation of the economy but rather monuments to waste and corruption.
Yours faithfully,
Saieed I Khalil
Richard N Rambarran
