The new government should reduce the role of state enterprises

Dear Editor,

For most of Guyana’s post-independence history the state has played a paramount role in shaping and controlling the country’s development paradigm. The end result of this statism has been the persistent underdevelopment of the society and the institutionalization of undemocratic governance. After almost one half of a century of political independence there remains a highly imperfect democracy, widespread poverty, rampant corruption and a diminished sense of nationhood that would take time to rebuild. An activist state system has over the years arrogated to itself the right to own far too many state enterprises, solely dictate economic policy and planning, and in other ways muscle into existence a plethora of restrictive laws and regulations that limit democratic involvement in the country’s development narrative. This statist development paradigm has provided a fertile and irresistible breeding ground for massive corruption by ruling politicians and government officials. Public property has been used for private enrichment and the laws of the land are honed to support the greed of a venal state elite. Private individuals seeking to establish their own businesses or do business with the state have been confronted with the demands for duck curry and El Dorado rum as appetizers and preludes to cash payoffs. You either bribe or you bust! Pay or there will be endless delay.

The Granger-Nagamootoo administration should take a serious look at the role of the state in the economic lives of the Guyanese people. As currently manifest, the paramount role of the state in the economic life of the country is both excessive and dysfunctional. Further, this statist dominance of economic life has deepened authoritarian governance and unfreedom in the society. The Granger-Nagamooto administration should trust and liberate the Guyanese people, both at home and abroad, to create enterprises and economic initiatives to develop the country. The administration should divest as many as they can of the state-owned enterprises that have been primary sources for corruption by public officials and will inevitably continue to be.

State enterprises are also poorly managed; some are even bankrupt and others unsustainable. Why does the government have to own radio stations, television stations and newspapers? These state-owned enterprises were established and sustained to control the public flow and access to information by earlier authoritarian regimes. The internet and social media have since largely limited the effectiveness of this authoritarian policy. Sell these state media enterprises and save the taxpayers paying to subsidize them. This would bring in much needed revenue and stem the steady growth of grey hairs by officials of the new government saddled with managing these state-owned enterprises. It would certainly reduce corruption considerably. The new government should largely leave business to business and focus on goal-setting for a new development paradigm.

The private sector should be freed up and empowered to play a leading role in the economy instead of the anaemic support casting to which it has been confined. State ownership of business enterprises has not worked in the past and it will not work going forward. Sell GuySuCo and collect taxes from its new owner rather than continuing to pay large subsidies from the depleted public coffers to sustain this dying dinosaur. Selling such public enterprises will provide funding to fix the University of Guyana and the rest of the educational system, build public infrastructure and in general provide training for employment to the large numbers of unemployed and restless youth.

The Granger-Nagamootoo administration is still in its honeymoon phase and should act boldy rather second guessing itself, tinkering with things and maintaining the status quo while giving lip service to change.

Low paid government employees are victims of the government’s statist economic ownership. Public revenues are being diverted to sustain poorly managed public enterprises while government workers are being paid pennies. The new administration should bite the bullet and pay government workers the promised ten per cent salary increases at this time. If the administration can subsidize state corporations, it can pay the government workers and discourage the proclivity for inefficiency and corruption.

Foreign direct investment must be actively sought. The problem in the past is that such investments have been courted in ways that almost exclusively benefited the investors rather than the people of Guyana. Investors such as Omai Gold Mines had lengthy tax free and duty free concessions and damaged the environment leaving without any significant benefit to the country. Other foreign businesses are largely unchecked in their operations and have major concessions that rob our country of revenue and resources. The new administration should revisit these foreign investments that are taking out our natural resources for little revenue and learn from the mistakes made, if not also correct them.

Foreign Minister Carl Greenidge has wisely called for an advisory board of Guyanese expatriates to assist in the crafting and implementation of foreign policy. The Granger-Nagamootoo administration should also establish such an advisory board for the economic sphere. Advisory boards as a tool of governance should be broad based drawing not only on expatriates or ‘come back-fuh-go back’ Guyanese, but also informed and competent resident locals. For example, Distinguished Professor C Y Thomas should be a part of any Economic Development Advisory Board. Such boards should comprise people from all political and ideological spectrums. The new Parliament can also establish an economic council to provide empirical analysis of the economy if one does not already exist.

The new Guyana government has a choice: To persist with the bankrupt statist policies or to pursue a new paradigm of development for the country with a much reduced role for state-owned enterprises. The choice is between development for the Guyanese people or duck curry for a privileged few.

 

Yours faithfully,
Ken Danns

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