(Part II)
Last week, we carried the presentation I had made at the University College of the Cayman Islands Caribbean Anti-Corruption Conference held on 19-21 March 2014. However, because of space constraints, the entire presentation could not have been published. Today’s column relates to the second part of my presentation which highlights further disturbing features in our system of governance, transparency and accountability.
Prolonged acting appointments
Several holders of important positions remain in acting positions after several years, in particular, the Chancellor of the Judiciary and the Chief Justice who have been acting for over eight years. The Auditor General was only recently confirmed after acting since 2005.
The prolonged acting arrangements involving holders of important constitutional positions are likely to militate against their ability to perform their duties in an independent, objective and professional manner. The Constitution guarantees their independence from the Executive. For example, Article 223 requires the Auditor General in the exercise of functions to be under the direction and control of no person or authority. The said article also states that there shall be an Auditor General for Guyana, implying a substantive appointment. Any acting arrangement therefore should be for a period not exceeding, say, six months to allow time for the recruitment of a replacement.
Prevalence of conflicts of interest
Several instances of apparent conflicts of interest have been highlighted from time to time in the independent media. In particular, there is an urgent need to promulgate specific rules in the area of public financial management to avoid, among others, situations where close family relations are responsible for preparing, certifying and transmitting financial statements for audit on the one hand, and overseeing the audit of those statements on the other hand. Appearance of recusal is not an option, especially when one occupies a position of influence in the audit entity, and is more than likely to raise questions of credibility in terms of the results. This is more so when one considers that public accountability is far more rigorous, stringent and demanding than that which prevails in the private sector.
Local government elections and accountability
Since 1994, no local government elections were held although the law requires such elections every three years. When the Government is unhappy with the performance of the elected officials, the councils are disbanded and replaced with interim management committees comprising handpicked loyalists. Recently, the National Assembly passed a resolution calling for the holding of elections by 1 August 2014 but the Government has been resisting efforts to do so. Only recently, the ABC countries (USA, Britain and Canada) joined forces with local civil society organizations, calling on the authorities to address urgently the issue of having such elections without further delay.
The six municipalities have not produced audited accounts for on average 15 years while 52 of the 65 Neighbourhood Democratic Councils (NDC) have not had their accounts audited and reported on for the past five years. In addition, 18 NDCs failed to produce audited accounts since they were established in 1994. This is despite the fact that both the municipalities and NDCs are in receipt of significant sums of money from the Treasury in the form of subsidies. The capital of Georgetown is in a state of disrepair, with deteriorating roads, clogged drains, piles of garbage left unattended with unbearable stench, sewers overflowing, and flooding after a few hours of moderate rainfall, all because of a fierce wrestle for political control.
Granting of radio and TV licences
Prior to 1992, the Government held the monopoly over the two radio stations. Coverage of events and programmes was heavily slanted in favour of the Administration to the exclusion of activities, commentaries and views that were critical or not supportive of the Government. When the present Govern-ment took office, public expectation was that it would free up the airwaves provide private radio stations with an opportunity to operate and to facilitate a more balanced coverage.
The Government, however, continued for 21 years in the same vein, perhaps in a more intense way. It uses the State radio, television and newspaper as well as other pro-government media outlets as the medium for personal attacks and vilifications, including character assassinations, against independent-minded persons and those who are critical of the way the Government administers the affairs of the State.
Because of this biased coverage, the Assembly had reduced the budgets of the state-owned National Communications Network and the Government Information Agency to $1 each for two consecutive years.
In 1997, the former President and the then Opposition Leader agreed that no radio licences would be issued until a Broadcasting Authority is established. The former President also gave the assurance that no such licences would be issued before the national elections of 28 November 2011. This was in response to a 2009 Court ruling that the Government consider all applications received at the time.
The Authority came into being in September 2011. However, just before the elections, and at a time when he was about to demit office, the former President approved of ten radio licences to a close relative, a close friend and the ruling party’s newspaper.
They were each granted five frequencies. At the same time, applications from several established media houses were denied. The Government made no public announcement on what appeared to have been a closely guarded state secret.
After 15 months, in response to a question from a Member of Parliament, the Prime Minister was forced to make the disclosure to a shocked nation. The nation also learned that in December 2010, two other persons, who are close associates of the ruling party, received licences for television and internet services.
Budget cuts and the Chief Justice’s ruling
The Opposition controlled National Assembly approved of a reduction in the Estimates of Expenditure for 2012 by ten per cent. This prompted the Government to challenge the Assembly’s decision on the grounds that: (a) the Assembly acted unconstitutionally; and (b) the Assembly could either approve the budget or reject it, but not reduce it. The acting Chief Justice upheld the Government’s position on both grounds. He also ruled that the Standing Orders, which the National Assembly uses as a basis for amending the Estimates, do not have the force of law.
The Court granted no relief (except in one case) since the Government validated the Assembly’s action by making the necessary amendments. It also declared that only an Appropriation Act could authorise withdrawals from the Consolidated Fund. The Government, however, went ahead and restored the original budget through withdrawals from the Consolidated Fund. This action not only undermined the authority of Parliament to approve of public expenditure but it is also a serious constitutional violation. As it now stands, expenditure totalling G$1.797 billion incurred in 2012 and 2013 remain unauthorized. The 2014 Estimates are due at the end of the month, and it is uncertain what is likely to happen. If the Assembly rejects the Estimates, this could precipitate a constitutional crisis.
Anti-money laundering legislation
The Caribbean Financial Action Task Force (CATF) was very critical of the Guyana’s anti-money laundering legislation since it does not conform to the standard recommendations used to evaluate countries’ efforts to combat money laundering and terrorist financing. Almost ten months after the CFATF drew attention to the deficiencies in the legislation, and faced with the threat of sanctions, the Government tabled the related amendments.
It wanted an urgent passage of the amendments as presented, contending that: (a) they addressed all the concerns that the CFATF had raised; and (b) if the amendments were not approved, Guyana would be blacklisted.
The combined Opposition felt that the opportunity should be taken to carry out a more comprehensive review of the legislation in view of Guyana being a transit country for cocaine destined for North America, Europe and West Africa. In addition, money laundering is linked to trafficking in drugs, firearms and persons as well as corruption and fraud, and appears to prop up the economy.
The Government was, however, unwilling to consider other aspects of the legislation and insisted that its concern was only with the deficiencies identified by CFATF.
Only recently, Guyana once again made the international news following the arrest in the United States and Italy of at least two dozen persons attached to criminal networks in New York, Mexico, Southern Italy and Malaysia for planning to ship 1,000 lbs of cocaine from Guyana valued at US$1 billion. Quite recently also, Guyana reportedly joined Mozambique at the bottom of the list of 55 countries that had been evaluated in terms of their anti-money laundering efforts. As of now, there is still no agreement on the proposed amendments.
Financial difficulties of major State-owned entities
The sugar industry was the main source of export earnings. However, due to poor management and political interference, it is on the verge of collapse. Instead of being a contributor to the Treasury, it has become a burden. For almost a decade, the company’s operations were subsidised annually by billions of Guyana dollars through the national budget. The same applies the Guyana Power and Light where technical and commercial losses account for approximately one-third of its power generation, and power outages are a frequent occurrence. This is despite the billions from the Treasury to assist in upgrading its operations in addition to loans from the Inter-American Development Bank.
Finally, the National Insurance Scheme has been making significant losses over the last few years. According to the actuaries, if remedial actions are not taken urgently, the Scheme’s reserves are likely to be depleted in a few years’ time. The Scheme had invested 20 per cent of its assets with the Colonial Life Insurance Company that collapsed, resulting in a loss of US$30 million.
Conclusion
Guyana’s problems are grounded in ethnic considerations that result in the infrequent change of government, coupled with flawed constitutional arrangements that put the President above the law. The “winner take all” arrangement has also contributed significantly to the present state of affairs.
The two main political parties derive their support essentially from one or the other major ethnic group.
This has resulted in Guyana experiencing: (a) 28 years of dominance by one political party through the tampering of the electoral process; and (b) with the ushering of free and fair elections in 1992, the other major political party ascending to the reins of power uninterrupted so far for 22 years. In the circumstances, accountability to the people has become a secondary issue.
