If the PPP really wanted the Anti-Money Laundering and Countering the Financing of Terrorism bill (AML/CFT) it would have been passed since 2011 when it had the majority. It is obvious Freedom House is uncomfortable with the bill; therefore, it brought the bill to Parliament just months before the deadline knowing that the opposition will delay its passage. As expected the opposition voted down the bill and attached several demands for its support. In so doing the strategists at Freedom House were able to shift the blame to the opposition and distract from very pressing issues of the day, most notably the depreciation of the Guyana dollar relative to the US$.
The backward economic and foreign policies of the PPP were bound to bring the economy to crisis. These include an asinine foreign policy that places an opportunistic left-wing agenda before the country’s best interests. The PPP has drifted away from the West and moved closer to several tyrannical and kleptocratic regimes around the world. It gambled on a rice barter arrangement with Venezuela just because a populist left-wing government is in power. As it stands, the Venezuelan right-wing, should it depose Mr Maduro, will very likely repeal Petro Caribe, an event that will cause a major shock to the Guyanese economy and several other Caribbean states. Sustaining Petro Caribe at this point depends on the suppression of dissenters in Venezuela. The PPP came out and declared it supports Mr Maduro, thus implicitly supporting the oppression of dissenting voices. If Mr Maduro loses power, the right-wing will create trouble over Essequibo. It is unlikely China
can be of help here because any new government in Venezuela will be closer to the United States. Will deeper economic cooperation with Brazil help to rebuff Venezuela’s claims and potential sabotage of the Mazaruni hydro project that was recently in the news? As we know, in the name of a confused ideology, kleptocratic Marxism-Leninism, the PPP has done a good job alienating itself from the United States and Great Britain.
The Low Carbon Development Strategy is yet another example of backward and opportunistic economic policy making. The PPP has done nothing to clean up the environment, push for balanced renewable energy, regulate large gas guzzling vehicles, enhance the aesthetics of Georgetown and the villages, yet it insists a useless hotel with a secret investor is consistent with a low carbon strategy. It insists that a new airport terminal is in line with a low carbon agenda. A comprehensive review and upgrading of the drainage system is not a priority in this policy framework. The one attempt at renewable energy, Amaila hydroelectric plant, was not going to solve the fossil energy problem in spite of the price of US$1 billion. The dry season would have reduced the generation of electricity, thereby making it necessary to continue operating heavy fuel polluting engines to keep up with electricity demand.
The country went deeper into gold extraction chasing a gold price bubble. The neutral private sector is penalized. The legal system does not ensure that a neutral unconnected investor will enjoy the fruits of his/her investments. Private property rights are not guaranteed by the legal system, which seems to be a magnet for status seekers instead of people with a strong desire to serve. Business opportunities are divvyed up to a few friends and family of the government – hence the oligarchic exploitative relationship between some in the private sector and the government. The rise of narco trading perverts the incentive structure causing many young people to ditch education in favour of a quick hustle. Scarce human resources are being diverted to narco and money
laundering activities. Money laundering and smuggling (of legal and illegal goods) add to the cost of doing business for those who want to be legitimate.
Various foreign inflows such as foreign aid and FDIs are slowly drying up, according to the data. This was inevitable given the backward economic and foreign policies. These also compound the reduction in foreign exchange flows. It was just a matter of time before the exchange rate came under pressure (although it is not very difficult to maintain a de facto fixed rate in Guyana). When there is devaluation the government of the day gets the blame. However, the PPP has already shifted the blame to the opposition. It has the propaganda machinery to inundate the public with this latest swindle. It controls the taxpayer-funded state media and through kleptocratic manoeuvres it controls most of the private media.
A previous Development Watch column provided data to show that the recent shortage of foreign exchange preceded the date when Parliament refused to pass the anti-money laundering bill. Hence the depreciation has nothing to do with the opposition and everything to do with bad economic and foreign policies of the government. The PPP has always had one strategy: blame the PNC for everything whether it is crimes or now for the shortage of foreign exchange. Another red-herring – the Inquiry into the death of Dr Walter Rodney – was launched this week. Suddenly after 21 years the PPP launched the commission. This is intended to deflect from the economic problems and discount APNU’s call for an Inquiry into more recent crimes on the East Coast and in particular the murder of Minister Sawh and his family.
The opposition boxed itself in by attaching rigid demands for support of the AML/CFT such as the Public Procurement Commission (PPC). The marginal cost associated with opposing the bill is much greater than the marginal benefits at this point. In a democracy in which no side has an absolute majority, no side will ever get everything it wants. Moreover, attaching the PPC would likely result in a weak PPC, which must be negotiated as an all-important institutional mechanism for ensuring fairness in the distribution of government contracts. APNU’s original demand of an effective Financial Intelligence Unit is reasonable showing that the party has an escape route once blacklisting occurs. The AFC needs to be less susceptible to populists without a backup plan.
Blacklisting will worsen the cost of doing business for legal enterprises. Overseas counterpart banks will slow down payments to and from Guyana. Of course, the objective is to make it hard for the illegal traders. But it is recklessness for any politician to make it harder for people to do legal businesses. Legitimate businesses face numerous hindrances already and they should not have to bear another one.
Politicians must not conflate anti-money laundering and anti-narcotics with anti-business or appear to be doing so. While not becoming too mesmerized with free market ideology, the politicians of this country need to exorcise the left-wing jumbies that have made this country the quintessential donkey cart economy it is today. Where is the pragmatism from the political class? The success of the workers will depend on vibrant and successful businesses and the ability of government to redistribute to the less fortunate. Imagine the opposition allows the kleptocratic communist party of Guyana to claim the right of being pro-business. That is incompetence, especially after all the Hoyte administration did to turn around business investments after the devastating impact of opportunistic socialism known as party paramountcy.
In my next column, I will finally discuss the idea of Caribbean economic convergence.
Comments: tkhemraj@ncf.edu
