By Rawle Lucas
Rawle Lucas is a Guyanese-born Certified Public Accountant and Assistant Vice President of the Lending Services Division.
Rawle Lucas is a Guyanese-born Certified Public Accountant and Assistant Vice President of the Lending Services Division.
Mr. Lucas has agreed to serve as a columnist with the Stabroek Business and will be contributing articles on economic, financial and development matters.
Good Stuff
I have been trying to find out the reason why the administration is making a big fuss about signing the Economic Partnership Agreement (EPA) negotiated between the European Union (EU) and the CARIFORUM states but to no avail. I have seen no specific reasons advanced by the administration for objecting to the document even though it has taken a position on the matter apparently with the support of the private sector. With the use of Internet technology, I gained access to the EPA document to be signed by the two sides to see if I could determine the reason or reasons why the administration is suddenly up in arms about the section of the document that deals with services. . I am baffled by the position of the administration since a read of the document tells me that, in spite of its flaws, the agreement is replete with good stuff that supports a variety of activities currently being pursued by the government. Despite the criticisms of the document from various quarters, it is my view that, once the Guyanese people get to learn of the many useful provisions of the agreement, they would be delighted with it and would urge the administration to sign it.
Personal Financial Benefits
Admittedly, the document is no spy thriller but those Guyanese with an interest in development matters will see that the EPA, in some parts, is an agreement that speaks directly to them. With several provisions catering to micro and small business, Guyanese will also see that the EPA gives them an opportunity to enjoy economic and financial freedom if they are prepared to take responsibility for their own development. Other provisions allow professional Guyanese trained in disciplines such as engineering, architecture, midwifery and so on to take advantage of business or work opportunities that may arise in Guyana and in European markets with the help of European or CARIFORUM investors.
Apart from the personal financial benefits that such opportunities harbor, they enable Guyanese to learn new techniques and hone existing skills that could be transferred easily at far less cost than bringing one or two “experts” at a time. The personal and public payoff is enormous, something of which the administration may not have thought or cared as it complained of the agreement.
In addition, the pressure to adopt corrupt practices to make ends meet could ease as increasing numbers of professional Guyanese get to earn money that could help improve their lifestyles and enable them to save for a satisfactory retirement.
Guyanese, however, have to prepare themselves for these opportunities and make the required effort if they want to benefit from the relevant provisions of the agreement.
Little Recourse
Beyond the personal benefits of the EPA, there are the broader investment, economic, financial and trade transactions that can bring much needed change to the Guyana economy and to the lives of Guyanese as a whole. The potential for trade and foreign investment is huge. Yet, by refusing to sign the EPA, the administration is acting as if this is a small matter.
According to current estimates, over 30 percent of the goods exported by Guyana go to the EU. If Guyana is cutoff from the EU market for not signing the agreement, the options available to it are not very good. Guyana could find itself scrambling for markets among countries that either produce the same products or can buy them cheaper from elsewhere. Knowing this makes it more baffling as to why the administration, with very little recourse outside the dispute resolution provisions of the agreement, would threaten to stay out of the agreement and publicly try to offend the EU and other CARICOM countries.
EU Support
Within the last two years, the administration has been quite vociferous about building up the competitive position of Guyanese businesses and diversifying the Guyana economy. The pursuit of these goals is laudable even though the interest in doing so is not new. What is different is that there is a real chance of strengthening the competitive capacity of Guyanese businesses and of broadening the economy with tangible support from external donors and investors.
The Inter-American Development Bank (IDB) has already contributed to this effort. Additional financial and technical contributions are possible from the EU through the workings of the EPA. Indeed, a central feature of the EPA is to support the efforts of CARIFORUM states to build up the capacity of private sector businesses to compete in regional and global markets.
The beauty about the EU commitment is that it is not limited to any one sector or a given size of business. Micro, small and medium sized businesses all have the opportunity to access whatever resources the EU is prepared to put into the economies of the states. Public officials have already stated that the Guyana economy is dominated by small business. Consequently, the provisions of the EPA could reach deep into the Guyana economy and help change the lives of ordinary Guyanese. It would appear, therefore, that a small business with a vision and a desire to succeed could become a big time and long-term player in the Guyana economy with EU help and investment.
Additionally, amidst a range of trade, business and investment activities, the EU has pledged to support eco-innovation and to facilitate the production and commercialization of innovation across the board. Further, it is prepared to support research and development in science and technology that could have a positive impact on innovation and creativity. In addition, the EU is willing to engage in joint ventures and joint activities with local businesses from the CARIFORUM states, and assist in developing process quality.
Potential for Job Creation
Through all these efforts, the potential for job creation is enormous. In light of such possibilities, it is hard to imagine what arguments the administration could have advanced to convince the private sector and other parts of civil society to accept a position of resistance to the EPA. The private sector stands to benefit from engaging with the firms and other actors in the EU.
Individuals stand to benefit from skill development, advances in science and technology and work opportunities at higher pay. Businesses also stand to benefit from market opportunities and access to resources. Any reasonable person with interest in this matter would therefore want to know what is driving the administration to oppose the EPA.
Accountability
As I see it, several provisions of the EPA could put the administration in a position that it abhors, being accountable to anyone, least of all the Guyanese people. Accountability and transparency are integral to the operation of the EPA and the people of Guyana should believe that their presence in the agreement could force behavioral change in the administration. In the absence of a clear explanation as to why it opposes the agreement, it is reasonable to speculate that the administration is fearful that its wings will be clipped if Guyana signs the EPA.
For example, the EPA requires each CARIFORUM country to establish a competition commission and to notify the joint EU-CARIFORUM Council when it was done. The EPA anticipates that the competition commission will conduct itself appropriately and if it does not, the competition commission could be challenged in the joint council. As readers probably know, the administration passed competition legislation over two years ago and has still not established the competition commission.
In addition, for five years now the private sector has been waiting on the administration to establish the Public Procurement Commission mandated by the Guyana constitution, and expected with the passage of the Procurement Act of 2003. If the administration continues to resist creating the commission, that too could be brought to the attention of the joint EU-CARIFORUM Council for resolution.
The preceding examples are only two in a series of administrative and policy actions contained in the EPA that could finally force the administration to start working on behalf of all the Guyanese people. The existence of the EPA looks like a blessing in disguise and may turn out to be the best thing that has happened to Guyana in a long time.
Thus, the administration faces an interesting dilemma, join the EPA and reform or stay out and face economic retribution. The ball is now in the administration’s court. Let us see what it does on behalf of the people of Guyana.
