Political economy fragility
Today’s column elaborates on organizational elements, briefly portrayed last week, which are needed for establishing Guyana’s stolen public assets recovery initiative. This elaboration is guided by four political economy realities, described below; the last of these is the most urgent.
First, given the context, any investment that Guyana makes in such an initiative is simultaneously an investment in both recovery and prevention. The organizational steps proposed below therefore, create barriers/deterrents against future public corruption, as well as aids for the recovery of past stolen public assets. These proposals are firmly rooted in the United Nations Convention against Corruption, UNCAC. For information, the convention declares: “Corruption can be prosecuted after the fact, but first and foremost, it requires prevention.”
Second, the estimated size of the pool of potentially stolen public funds derived from independent sources is quite large, ($333-340 billion or 60 per cent of 2014 GDP at current basic prices). This makes even a very modest recovery rate (say 10 per cent) quite worthwhile. This is more so the case, when it is recalled that the estimate presented last week has not provided fully for 1) corrupt practices in state-owned enterprises and organizations; and 2) illicit slush funds and parallel treasuries acquired from disposition of public assets and kept under the irregular and/or illicit control of the past government. Furthermore, corruption in Guyana, like elsewhere, is a major driver of income, wealth, and opportunities inequality and its derivative, poverty. Relatedly, it is further advised that the recovery of stolen public assets is a daunting endeavour and should not be undertaken lightly. It requires an enormous commitment of political will as well as industry on the part of those entrusted with this task.
Third, it would be in serious error to conflate the notion of the Guyana state with that of the Government of Guyana, GoG, even though in popular parlance this frequently occurs. Voting out the PPP/C government does not, by itself, de-construct the criminal state in Guyana as I have earlier advanced this notion.
Voting out is a necessary, but not sufficient condition for achieving this. Prevention of future exposure of the new political ‘rulership’ and public officials/executives to the negative corrosive socio-economic effects of public corruption is a necessary complementary action.
Finally, and most importantly, the newly-elected democratic government must maintain a pro-active political economy stance, by keeping the voted-out cabal on its heels. Political murmurings of GuySuCo’s impending bankruptcy/closure together with the drumming up of rice farmers’ cries for instant markets imply massive coming demands on public spending. This sets the stage for exploiting Guyana’s intrinsic political economy fragility leading to severe public resource diversion. Be warned!
Organizing Elements: 1
The first organizational step suggested in last week’s column was the establishment of an anti- corruption body/unit to pursue Guyana’s stolen public assets recovery. There are basically, three models around the world. These are 1) multi-purpose bodies, which incorporate this function as one of several tasks. This model has been criticized for lacking focus and commanding political will; 2) specialist law-enforcement bodies.
These have been criticized for lacking developmental focus; and 3) dedicated autonomous independent bodies. I recommend model 3, along with reporting to the National Assembly to secure transparency, and incorporating specialist sub-committees, as needed.
This model’s legal structure must be clearly defined in domestic law. Furthermore, domestic corruption laws and anti-corruption procedures and practices must be updated to conform to those stated by UNCAC, which is the premier international instrument against corruption. For Guyana, I refer here particularly to 1) legal definitions of corruption, including influence peddling, nepotism, concealment and so on; 2) whistle-blower legislation; 3) the organization and functioning of the Integrity Commission and Procurement Commission; 4) the enactment of best practices codes of conduct for public officials and oaths of office for members of the National Assembly and ninisters. These should provide for financial and other disclosures, disciplinary measures and processes as covered in the International Code of Conduct for Public Officials.
As UNCAC declares: “The Convention requires countries to establish criminal and other offences to cover a wide range of acts of corruption, if these are not already crimes under domestic law.”
Similarly, the composition of this body should reflect contemporary best practices: investigative police/criminal authorities; public service officials (from Ministries like Home, Legal Foreign Affairs, Works, and Finance); officials of regulatory agencies; (like Inland Revenue, Gold Board, GGMC, Customs Administration); private sector (especially banks); and community based organizations (especially Transparency Institute, Human Rights, Bar Association, and Trade Union Congress). Given the task before it, the skills sets made available to this body must be broad-based.
Organizing Elements: 2
A major problem facing such bodies is sufficient resources to be effective. This issue is addressed in the next section. Here readers should note UNCAC’s declaration on its stolen assets recovery initiative: “In a major breakthrough countries have agreed on assets recovery, which is stated explicitly as a fundamental principle of the Convention”.
The four fundamental obligations of UNAC are listed as 1) prevention and criminalization of corruption 2) promotion of international cooperation 3) recovery of stolen public assets 4) improved support, technical assistance, and information exchange in both public and private sectors.
Conclusion: UNDOC and World Bank initiative
UNCAC states: “Countries agreed to cooperate with one another in every aspect of the fight against corruption, including prevention, investigation, and the prosecution of offenders”. In this regard technical assistance is provided under UNCAC, in terms of training, capacity building, and the provision of experts of all relevant types (legal, accounting, finance, forensic auditing, investigative, analytical, legal, and institutional framework design). Members are duty bound to perform evidence-gathering in their jurisdictions.
Furthermore, the United Nations Office of Drugs and Crime, UNDOC has partnered with the World Bank on stolen public assets recovery through the StAR Initiative; whose aim is to: 1) lower barriers to assets recovery; 2) limit safe havens for stolen public assets; 3) build national capacity; and 4) provide technical assistance.
It is financed by the World Bank and UNDOC and has four key pillars, namely, empowerment of poor member countries, innovation, partnership, and global standards-setting.
