Seven days and counting

One-party state

It is seven days now that Guyana is being managed without its parliament playing a role in the management process. No one knows how long this unsatisfactory situation will last, but the people of Guyana have the knowledge that the nightmare will have to end in six months. This state of affairs arose because the President decided to invoke a provision of the constitution that enabled him to prorogue the 10th Parliament. In other words, the government decided to suspend the representatives of the people, as if they were schoolchildren, from engaging in the management of the business of this country. The curiosity and tenacity of the 10th parliament, a hallmark of democracy and an outcome of the 2011 general elections, had become a bugbear for the government which decided that democracy was too much to handle and finally chose to declare openly its preference to rule Guyana as a dictatorship and a one-party state. The economic consequences of that choice are of interest to this article.

True feelings

The prorogation of the 10th Parliament is a historic event in the young life of an independent Guyana with both political and economic ramifications for the future of the nation. Two years short of Guyana’s 50th anniversary as an independent nation, the PPP/C government has decided to reveal its true feelings about how the lives of Guyanese should be managed. The drastic political decision of President Ramotar equals his drastic economic decision to let the Amaila Falls hydropower project go at a time when it was possible. The prorogation of parliament, coupled with the failure of letting Guyanese have cheap renewable energy, demonstrates the preference of the PPP/C to sacrifice Guyana’s economic fortunes at the altar of political expedience.

Insensitive

The motive for the decision could be understood when set in its political context and when evaluated constitutionally. Yet, it appears insensitive to the economic aspirations of the country. It is the PPP/C alone now that will determine the faith of the country having abrogated the right of the elected officials of the people to continue their work in the 10th Parliament. The effect of the government’s action is to convert itself into the sole arbiter of the affairs of state. Politics and economics are two sides of the same coin. Its inability to bring cheap electricity, modernize the Skeldon sugar factory, provide a flawless stelling at Supenaam and help keep a clean capital city, leaves Guyanese with no faith that the PPP/C government could be trusted to act in the best interest of the nation. It should be recalled too that the demise of GuySuCo took place when President Ramotar was an active member of its Board of Directors. The political choice of the President has consequences for both business decisions and public financial management which must be taken into account when evaluating the wisdom of the decision.

Immediate concern

The decision by the President to exercise his constitutional right to prorogue parliament has thrown the little semblance of public financial management that there was into the scrap heap. It also leaves the management of the finances of the nation to the conscience of persons who seem to have very little regard for accountability.   The immediate concern for the general public is accountability for the resources which have been given to the government through the tax system and through the conduit of friendly relations with both bilateral and multilateral donors and lenders.

It needs to be understood that the ability of the government to spend money depends on the appropriation process and that process starts with parliament passing an appropriation bill. The parliament does that during the period that it considers the budget presented by the government. Once a bill is approved the government has the legal authority to spend money up to the level approved in the Appropriation Bill in the budget timeframe, or as might be increased through contingency spending. That timeframe is one year, usually from January to December since the budget is an annual one. Parliament, having passed the Appropriation Bill for 2014, was considered useless by the government, and the evidence shows up in the refusal of the administration to assent to bills approved by that legitimate constitutional body.

It is obvious that the suspension of parliament does not deprive the government of spending the money which has already been approved. It would appear too that it does not take away the right to tap into the contingency money to keep the government running until another budget is approved for the new calendar (fiscal) year. By law, a new budget must be before parliament no later than March 31 each year and March 30 during a leap year. Government’s budget contains key areas of public policy and indicates how resources are allocated and spent. Public financial management seeks to ensure that the allocated resources are spent as agreed and for the purposes intended. It also measures the impact that the spending has on particular policy goals and if the government is wasting money on ill-conceived projects. Since a substantial part of the budget is gotten from bilateral and multilateral donors and lenders, they too have an interest in how budgeted resources are managed. One could imagine how dismayed those countries and institutions must be to see the public financial management process cast aside by the government so willy-nilly.

Fundamental setback

What the suspension of parliament does, therefore, is to deprive parliamentarians of the right to question and scrutinize the decisions and actions of the government during the period that the members of parliament are in suspension. This is a fundamental setback for the country. The standard process by which parliament exercises oversight depends on timely reporting by the government which is often tardy in its duties. As a consequence, parliament is unable to assess budgetary performance in a timely manner. Typically, parliament has to wait for the report of the Accountant-General before it examines the stewardship of the government.

Much time elapses and those reports come long after the deeds have been done and well into subsequent budget cycles. The Public Accounts Committee is dealing with a backlog of reports and will be unable to advance its work during the suspended parliament. Moreover, issues come to light through public complaints and media disclosures long before the Accountant-General’s report makes it to parliament and these can be dealt with immediately by a sitting parliament.

Economic ramifications

The prorogation of parliament removes this option from the Guyanese people. And Guyanese must be concerned about this restraining course of action by the government because of its economic ramifications. One such result is the possible impact on domestic and foreign investment. The selfish act of political self-preservation by the present administration singlehandedly has increased the political risk of any planned domestic or foreign investment. The Guyana stock market was already down over six per cent before democracy was undermined. The uncertainty of the investment environment has increased with the local stock market down a further percentage point since the suspension of parliament. Undoubtedly too, it has now driven up the cost of doing business with the likelihood of political risk insurance having gone up. The importance of political stability to investment has been underscored by the World Bank in its Doing Business Index. The likelihood of a new administration in Guyana after the next elections is real and the threat that it would not necessarily honour any agreements by the current administration will not engender any confidence in any potential investor. One could therefore expect a decline in private investment for as long as the dictatorship drags on. The resort to dictatorship might have its privileges, but depending on it for political survival has its economic consequences.

One could imagine, for example, how companies operating in the telecommunication sector might be feeling presently. The unfinished telecommunications bill was before the house and with the prorogation of parliament it is now left in limbo. The proposed changes to the telecommunications bill might not be favourable to all interested parties, but it has benefits which could lower the cost of online access and services to consumers. It has the potential also to facilitate an expansion in investment that relies on the availability of cheaper broadband services which could be had through competition. No one knew when the bill would come up for a final decision, but the prorogation of parliament keeps the telecommunication bill in a state of political uncertainty.

Then there is the urgent attention promised by parliamentarians during the recess that would be given to the likely wrongdoing and mismanagement of Guyana’s forest resources. Bai Shanlin might be able to avoid having to explain its behaviour in Guyana now that parliament has been suspended. It would appear too that the conflicting positions of multiple government agencies in the management of Guyana’s relations with Bai Shanlin and Vaitarna would not take place.   As a result, the nation would never know if officials of the Government of Guyana were complicit in the failure of both Bai Shanlin and Vaitarna to honour their agreements to undertake value-added operations. This likelihood cannot be dismissed any longer given the extremes to which this government has gone to undermine the economic and political fortunes of this country. The attitude of this government is such that the people of Guyana, whether in the majority or in the minority, have no right to question it.

A spinoff from that issue is the contradiction in the data regarding the level of production and export of logs that appear in the 2014 half year report presented by the Minister of Finance.   No one from the government has attempted to explain the contrast in information supplied by the Minister and that obtained by Stabroek News from the International Tropical Timber Organization. Again, nearly three months have elapsed and the people of this nation were not considered important enough to deserve answers to that question. More recently, parliament expressed interest in learning more about the seemingly unauthorized spending of public funds by the Attorney-General. Before going on recess, parliament had also targeted the unauthorized spending by the Minister of Finance. None of these matters seem able to see the light of day clearly indicating the administration’s disgust with democracy and its disdain for public financial management.

Lost its way

Guyana is at the point where the PPP/C has lost its way and cannot be expected to find its way back on course. Its claim to having brought democracy to Guyana is now evenly matched by its destruction of it. The evidence is clear that democracy is what helps nations to thrive and grow. The PPP/C does not believe that and the prorogation of parliament is the evidence.