I have been around in this business for 25 years and I have never seen a post-elections process like I have seen here in those 25 years, anywhere…[W]e saw things, with our own eyes, which were clearly not credible and clearly not right. Everybody saw that. The CARICOM people were there, the OAS were there, the Commonwealth people were there, the Carter Center were there.
I like to think more about having the reform process launched now, to ensure that come 2025 you don’t end up in the same situation as you did this time.
British High Commissioner, Greg Quinn
A week ago, Belarus held its presidential elections. The election authorities there declared the incumbent president Alexander Lukashenko the winner, having secured 80 percent of the votes cast. However, according to the opposition candidate, Ms Tikhanovskaya, she won 60-70 percent of the votes where they were properly counted, instead of ten percent given to her. International observers considered the elections to be neither free nor fair, and the EU is threatening to impose sanctions against those responsible. Thousands of Belarusians have taken to the streets in protest, some of whom were arrested, beaten and tortured.
Last Friday, Angola’s Supreme Court sentenced the son of former president Eduardo Dos Santos to five years in prison for fraud, embezzlement and influence trafficking. Jose Filomeno de dos Santos was found guilty of transferring $500 million from the country’s Sovereign Wealth Fund, of which he was the head, to a Swiss bank account. The Governor and a director of the Central Bank and were also sentenced to eight years and six years in jail respectively for their involvement in the matter while a close business associate received a five-year sentence. All four were, however, acquitted on money laundering charges. Angola is Africa’s second-biggest oil exporter.
Since Guyana gained Independence from Britain in 1966, it has seen seven Administrations managing the affairs of the State: those of Forbes Burnham (1966-1985), Desmond Hoyte (1985-1992), Cheddi Jagan (1992-1997), Janet Jagan (1997-1999), Bharrat Jagdeo (1999-2011), Donald Ramotar (2011-2015) and David Granger (2015-2020). On 2 August 2020, a new Administration under Dr. Irfaan Ali was sworn in. Since then, several important developments have taken place, including the termination of contracts of employment of some political appointees and those of seven of the ten Regional Executive Officers; and financial and management assessments of key State agencies.
In today’s article, we discuss these two developments as well as the need to urgently convene Parliament so as to set the legislative agenda for the rest of the year, including the tabling and approval of the 2020 National Budget.
Career public servants versus political appointees
There are essentially two main categories of government employees. The first are those appointed by the Public Service Commission in the case of the regular Civil Service, following adherence to the Public Service rules regarding recruitment. This normally includes public advertisement to fill a vacancy and the selection of the candidate strictly on the basis of merit, having regard to the person’s qualifications and experience. The same applies to the wider public sector, that is, public corporations and other agencies in which controlling interest vests with the State. These entities have their own human resource management systems which have to be followed.
The above employees enjoy security of tenure of office until they retire, subject to satisfactory performance in the execution of their duties. Some of them opt to go on contract and enjoy higher emoluments and other conditions of service because no superannuation benefits are payable to them. At the end of the contractual period, the contract may be renewed. Either party can terminate the contract by giving appropriate notice. This arrangement can, however, be subject to abuse. Currently, about 20 percent of public service employees are employed on a contractual basis. One of the recommendations of the 2015 Commission of Inquiry into the functioning of the Public Service is to as far as possible eliminate the use of contracted employees and to have in place a unified service with uniformity of pay and grades. However, this recommendation was largely ignored.
The other category are political employees who are appointed by the President, a Minister of the government or the head of agency, outside of what may be regarded as the regular or authorized establishment. They are not subject to competitive procedures in their recruitment and do not enjoy security of tenure of office. Once a new government is elected, these persons are expected to demit to enable the new Administration to select persons of their choice to assist it to manage the affairs of the State. However, the system should not be abused, and as far as possible reliance should be placed on the work of employees in the authorized establishment. After all, it is that establishment which supports the work of the government of the day. Judging from past experience, it may be appropriate for parliamentary approval to be given for the creation of a specified number of positions for political appointees, including setting emoluments and other conditions of service.
Permanent Secretaries and Regional Executive Officers are the chief executive officers of Ministries/Departments/Regions and, as heads of budget agency, are accountable to Parliament via the Public Accounts Committee. They ought not to be political appointees. As the word “permanent” suggests, governments come and governments go, but it is the Permanent Secretary along with his/her staff that provide the institutional memory and a smooth transition from one Administration to another.
Guyana’s diplomats fall into same two categories – career diplomats and politically-appointed diplomats. The latter are expected to resign upon a change in Government, and their appointments should be restricted or eliminated altogether to enable the growth and development of a professional foreign service serving the government of the day.
Assessment of key State institutions
The new Administration has appointed a technical team to conduct ‘a rapid financial and management assessment’ of key state agencies, including the Guyana Sugar Corporation (GUYSUCO) and the Guyana Power and Light. In total, 18 entities were identified for the review in addition to the Department of Public Information. A forensic audit of the incomplete Infectious Diseases Hospital at Liliendaal, on which the enormous sum of $1.6 billion has to date has been expended, is currently being undertaken by the Auditor General. However, the source of funding of this expenditure has not been disclosed, considering that there is no budget in place for 2020. This hospital was recently commissioned by former President Granger in one of his final acts before demitting office.
In 2015 and early 2016, forensic audits were carried out of some of the above entities. It would be of interest to learn the extent to which the recommendations made have been implemented, especially as regards the National Industrial and Commercial Investments Ltd. (NICIL), the Lotto Fund, and the Central Housing and Planning Authority. In relation to NICIL, a key recommendation was to wind up the affairs of the State-owned company and transfer its operations to the Ministry of Finance by creating a small unit to monitor the performance of public corporations and other entities in which controlling interest vests in the State, including ensuring all dividends and other income derived from these entities are paid over to the Treasury. This recommendation was made in the light of NICIL’s interception of State revenues and using such revenues to meet expenditure without parliamentary approval as well as of the fact that most of the entities identified in the 1993 Privatisation Policy Framework Paper had already been divested. The Auditor General was to have undertaken a ‘transaction audit’ of NICIL but it is unclear what progress was made and what were the results.
Despite the above recommendation, NICIL’s operations were expanded to include the establishment of a Special Purpose Unit mainly to manage the assets of closed sugar estates. In this regard, several of the assets of the closed sugar estates, including land, were vested in NICIL in accordance with Section 5 of the Public Corporations Act. That section provides for the vesting in a public corporation of movable and immovable property of the State. Since NICIL is not a public corporation but a company established under the companies Act, Section 5 was by order made applicable to it.
Some of GUYSUCO’s assets vested in NICIL were disposed of to third parties but this action is being challenged in court since Section 8 of the Public Corporations Act that was used to dispose of these assets, was not made applicable to NICIL. In accordance with this section:
The Minister may transfer by order to a corporation or to any other person, or place under its or his control, the whole or part of – (a) any undertaking or any other corporation or any other person or other body corporate owned by the State or in which controlling interest is vested in the State or any other agency on behalf of the State; …
Our initial thought was that the financial and management assessment of the above entities would focus on their performance over the last few years as well as on their financial condition and state of affairs in order to provide a basis for decision-making, going forward. This is in addition to a detailed examination of the books of account and supporting documents to identify any irregular transactions and an assessment of their implications. However, according to the Minister of Parliamentary Affairs, the exercise is not an audit but to provide the President with an overview of the state of these agencies in the shortest possible time. The assignment has since been completed and the related report handed to the President. One hopes that one of the recommendations contained in the report would be for a more detailed review of the operations of some of the entities which in the view of the team have serious financial and managerial problems.
Estimates of Revenue and Expenditure for 2020
For the years 2017, 2018 and 2019, the Estimates of Revenue and Expenditure were presented to the National Assembly and approved before the beginning of the fiscal year. This approach was a progressive one since there are several benefits to be derived as discussed in previous articles. However, because of the impasse surrounding the holding of elections following the 21 December 2018 no confidence vote, the Assembly met on only four occasions, the last being on 23 May 2019 and the subsequent dissolution of Parliament on 30 December 2019. As such, the 2020 Estimates could not have been presented to the Assembly.
Eight months into the fiscal year, and no budget is in place. The immediate priority should therefore be to convene Parliament to, among others, to approve the Estimates of Revenue and Expenditure for 2020. It should not be too difficult to put together a budget for 2020 in the shortest possible timeframe, which would in effect be a financial plan for the remainder of the year. However, for the purpose of completeness and to ensure parliamentary approval is given for a budget for the entire fiscal year, revenues collected and expenditure incurred from January to date should be included. In effect, the budget would be a two-part one: 1 January to July; and August to December. One also hopes that, come December 2020, the Estimates of Revenue and Expenditure for the fiscal year 2021 will be presented to and approved by the Assembly.
