As indicated in my last week’s column, I was privileged to have been invited to participate in the University College of Cayman Islands Caribbean Anti-Corruption Conference held on 19-21 March 2014. I made two presentations: ‘Accountability at the Crossroads – the Guyana experience’; and another highlighting the work of Transparency Institute Guyana Inc.
Today, I present for the benefit of readers a summarized version of my presentation on the first topic.
Background
Guyana’s history of public accountability since it attained its Independence has been a sad one. A culture of ‘non-accountability’ had developed at almost all levels of government, so much so that by 1981 accountability was brought to a standstill. Although accountability was restored from 1992, the ten-year gap remains a significant blemish for the country. Since the late 1990s, however, there has been a marked deterioration in our system of accountability, as highlighted in successive reports of the Auditor General.
Accountability in perspective
The UN General Assembly provides an elaborate definition of accountability. It is sufficient to state that accountability is enriched if it is seen as a moral act and a personal responsibility, voluntarily given rather than being imposed. Imposed accountability is likely to result in minimum compliance or in some cases non-compliance.
An effective system of public accountability requires financial management policies and practices that are in conformity with international best practice. This must be supported by: (a) an independent, competent and credible Legislative Audit serving the public interest; (b) an impartial and dedicated parliamentary committee with responsibility for monitoring the public accountability processes; and (c) a responsive and enlightened government that is meaningfully committed and willing to act on agreed recommendations for improvement. These are indispensable to the maintenance of the highest standards of public accountability.
The Guyana experience: 1966-1992
Guyana inherited a sound system of accountability from the British. Audited public accounts were laid in the Legislature within the prescribed deadlines. Systems and procedures were so sound that they remain in place to the present time, with little or no modifications over the years. After 47 years, however, they have become outmoded and cumbersome and are not reflective of international best practice.
Democracy and accountability are the twin sides of the same coin. Democracy leads to accountability which in turn leads to development. A lack of democracy leads to a lack of accountability which in turn hinders development. Accountability starts with the casting of the ballot in a free and fair election. If that process is tampered with, then the highest form of accountability – accountability to the people – would be compromised, and all other forms of accountability are likely to collapse around it.
This is true of Guyana during the period 1968 to 1985 where successive elections were manipulated in favour of the then ruling party. Accountability at all levels of government began to deteriorate rapidly. By 1981, the country was unable to service its external debts and was declared technically bankrupt. When the then President died in 1985, he left an economy shattered and a country in virtual ruin. Financial accountability was seven years in arrears.
It took a herculean effort by the new President Hoyte to turn the country’s fortunes. His administration abandoned socialism, replaced it with a market economy, and entered into an economic recovery programme with the IMF. It was a painful period of austerity but a necessary one to correct the adverse effects of embracing socialist tenets and of authoritarian rule. Hoyte’s administration completed an additional five years of financial reporting and audit, after which accountability was brought to a standstill in 1991.
The Guyana experience: 1992 to 2000
With the collapse of the Soviet Union, free and fair elections were restored in 1992 that saw a change in administration. The new administration continued with the Hoyte policies. Public accountability was restored. However, efforts to bridge the gap between 1981 and 1992 proved unsuccessful.
In 1992, 70 per cent of the country’s revenues went to the repayment and servicing of the public debt. Through a vigorous campaign at debt relief, most of the debts were either rescheduled or cancelled. GDP growth during 1992 to 1997 averaged 7.1 per cent, one of the fastest growth rates in the region and among low income countries. However, it began to fall dramatically, reaching a negative 1.4 per cent in 2000.
The Guyana experience: 2001 to present date
The growth rate remained depressed during the period 2001 to 2005, averaging 0.5 per cent. During the period 2006 to 2012, improvements were recorded averaging 4.4 per cent. However, successive Auditor General’s reports identified significant discrepancies in the awarding of public contracts, overpayments to contractors, and defective public works. In addition, the Government has also not accounted for the expenditure on: (a) the Great Flood of 2005; 2007 World Cup Cricket; and Carifesta X which took place in 2008. Other disturbing features are discussed below.
Creation of a parallel Treasury
NICIL is a state-owned company established in 1990 to monitor Government’s privatization programme and to ensure that all proceeds are paid over to the Treasury. However, since 2002, in violation of the Constitution, NICIL assumed the role of a parallel Treasury through the diversion of certain state revenues into its coffers. These include dividends from public enterprises; proceeds from the sale of state properties and other assets to favoured individuals at concessional prices; and transfers from other state institutions.
NICIL also uses the proceeds to meet expenditure without parliamentary approval, another constitutional violation, and there is a lack of transparency. Examples include the construction of the Marriott brand hotel; the aborted Amaila Falls Hydro Project; and the Berbice River Bridge. As a result, the National Assembly passed a resolution almost two years ago, calling on the Minister of Finance, to, among others: (a) account for the properties that NICIL has been entrusted with; (b) explain the basis upon which such properties were disposed of; and (c) hand over the monies and excess funds to the Treasury. To date, the Minister, who is also the Chairman of NICIL, is yet to comply.
Lack of transparency in the award of contracts
The Government entered into several large contractual arrangements over the last five years or so that lacked adequate transparency and competitiveness, particularly in the run-up to the November 2011 elections. Examples include the construction of the US$200 million Skeldon Estate Factory that is operating at significantly below its capacity and is currently undergoing major overhaul at significant cost; the Marriott brand hotel without any proper feasibility study; the Specialty Hospital where the selected contractor lacked the requisite experience; and the expansion of our international airport, again without a proper feasibility study.
The procurement of drugs and medical supplies, estimated at US$25 million annually, is also biased in favour of a local supplier with a connection with the ruling party. That supplier provides about 80 per cent of the Government’s requirements.
Perceptions of corruption
Guyana continued to score very poorly on the Corruption Perceptions Index (CPI). In 2013, it ranked of 136 out of 177 countries with a score of 27 out of 100. Since 2005 when Guyana was first assessed, similar ranking and scores were recorded without evidence of efforts being made to address the problem. The Government remains in a state of denial, continues to ‘circle the wagons,’ and displays hostility to those who speak out on this matter.
Non-functioning Integrity Commission
The continued failure over the last eight years to have a properly functioning Integrity Commission remains a source of concern. With Guyana’s poor assessment on the CPI, a Commission provided with adequate resources; and staffed by independent, and technically and professionally competent persons can have a positive impact on the CPI. There are too many public officials in position of authority flaunting unexplained wealth in the eyes of citizens with impunity.
Non-establishment of the Public Procurement Commission
The Constitution was amended in 2001 to provide for the establishment of the Public Procurement Commission to ensure that the procurement of goods and services and the execution of works are conducted in a fair, equitable, transparent, competitive and cost-effective manner. This was in response to persistent criticisms from the Auditor General of the systems and procedures and of the several violations. Many stakeholders also held the view that the system in place did not provide them with confidence as to the fairness and transparency in the award of contracts.
After 13 years, the Commission is yet to be established mainly due to the insistence of the Government that Cabinet should continue to be involved in the procurement process. The constitutional amendment removes that involvement and vests it with the Commission.
Creation of a parallel Public Service
Some 20 per cent of public servants are employed on a contractual basis at emoluments and conditions of service superior to those of the regular public servants. There is also a lack of transparency, as the Public Service Commission is not involved to ensure competiveness and fairness in the recruitment process. Most of the contracted employees are handpicked, some of whom are retained beyond their retirement age. There is also no Public Service Appellate Tribunal since 1995 to address the grievances of state workers. A fully functioning Tribunal is likely to reduce significantly the workload of the Ombudsman who was appointed recently after an eight-year gap.
To be continued
