Since taking office on August 2nd there has been frenetic activity by the PPP/C government in all sectors except for its legislative agenda where it is inexplicably still to present a range of bills that should have been in deep contemplation for months.
Each day there are multiple reports of ministers journeying to the far reaches of the country to meet with the people, declaring solutions to intractable problems and initiating projects that are meant to improve livelihoods. This intense level of activity is in sharp contrast to the lacklustre APNU+AFC government and in particular the 18 months it spent defying the will of the people to cling to office even though it lost a straightforward motion of no confidence and the ensuing general elections.
While having embarked in a commendable manner, there are serious issues which the government will have to address in a comprehensive and convincing manner. The first of these is its fiscal outlook and its expenditure plans. The government has gone ahead at breakneck speed to execute major infrastructural projects and to mobilise debt financing.
Just weeks after taking office, the government announced it was seeking to raise US$250m ($50b) to support its housing development plans for the next five years.
“Guyana is poised to quadruple its GDP in the upcoming years as a result of the oil and gas sector. In parallel, the GoG intends to transform the infrastructural landscape of Guyana with the undertaking of major urban development plans”, the advertisement inviting expressions of interest said.
The ad also said that the government’s objective is to stimulate economic interest and seek the “best deal for the citizens of Guyana, while adhering to the highest standards of transparency”.
If this loan materialises it would average out at US$50m per annum excluding interest charges. The government is also proceeding with an ambitious Demerara Harbour Bridge project, a bridge over the Corentyne River and a number of major road programmes. These will all come with heavy price tags as will the proposed training of 20,000 persons via the University of the West Indies.
When faced with windfall revenues, as Guyana expects from its oil and gas resources, the recommended course of action has been to establish a Sovereign Wealth Fund (SWF) to guide expenditure priorities, facilitate savings and to ensure prudence in an exceedingly unpredictable industry and unstable global economy. With the country’s version of the SWF, the Natural Resource Fund, yet to be activated by this government there is a grave risk that it has already undermined and superseded the key mechanism – encompassing a range of stakeholders – which is to determine how oil proceeds are to be apportioned. Expenditure from the fund would also naturally be tied to the incurring of debt and the managing of the debt ceiling. It should be borne in mind that the revenues earned so far since oil extraction began last December amount to just over US$150m and rosy projections of a quadrupling of GDP are fraught with all types of uncertainties and pitfalls. The country must not be dragged into another vicious debt cycle. Before the 2021 budget is finalised, President Ali needs to make a clear statement on spending plans and the activation of the Natural Resource Fund.
Another immediate challenge for the new government will be the sustenance of this veritable burst of energy. Well-meaning projects often tend to get bogged down in poor planning and deficient contracting which end up costing taxpayers. Adequate and professional oversight of these projects are non-negotiable. Unfortunately, governments extending over the last three decades have presided over any number of public infrastructure disasters and there is yet to be a clear sign that this administration recognises its responsibility here.
The dismissal last week of Dr Vincent Adams, the Head of the Environmental Protection Agency (EPA) is a grievous blow to meritocracy and professionalism in the public service. There is a great risk – at a moment when it is most needed – that the EPA will revert to the languid state it had exhibited for many years under PPP/C governments. We wait with great interest to see who replaces Dr Adams.
To ensure that costly public infrastructure projects proceed on a happy trajectory, there should be a well-resourced inspectorate division of the Ministry of Public Works which keeps an eye on both contractors and consultants. The protracted dispute over the CJIA expansion project which now straddles three administrations and is yet to be resolved is abject testimony of governmental capacity and the lack of continuity between administrations. Hopefully the drafting of an engineers’ bill will lead to a law in short order and help to bring rigorous standards to public infrastructure works.
Transparency and good governance remain immediate concerns. Massive expenditure on public infrastructure and invitations for the supply of services attract corruption. The institutions to address such corruption and to ensure value for money are weak to non-existent. The Integrity Commission is meant to be one of the primary institutions ensuring that government officials are not illicitly enriching themselves by taking bribes or filching taxpayers’ money. There is no sign yet that the Integrity Commission here can discharge this function. It continues to plead that it is short of resources without any apparent means or intent to change this condition. Interestingly, last week it was announced that Jamaica’s Integrity Commission is to receive a massive cash injection from the United Kingdom. The UK Government is to provide the Commission with approximately £550,000 over the next two years to enable significant capacity-building including support to develop the capability for electronic filing of statutory declarations with the commission; procurement of a case management system; procurement of interview equipment; and the preparation of a draft national anti-corruption strategy. Would this government be amenable to such assistance to the Integrity Commission?
Calling for an enforceable ministerial code of conduct, Mr Ralph Ramkarran in his November 22nd Sunday Stabroek column had this to say: “Guyana is entering a new era about which we have little or no experience. The doors are wide open for large scale abuse, bullyism, conflict of interest, theft, bribery, corruption and other traumas that have afflicted most oil producing countries. There is nothing peculiar about Guyana which suggests that we can avoid these pitfalls. The question should not be if we need an enforceable code of conduct. It should be how fast we can get it in place. If public opinion takes this matter up, a voluntary, unenforceable, code might be attempted. This would be a waste of time. It would not be enforced. The Integrity Commission, in an expanded role, might satisfy the requirements of an investigative body”.
There will be an early test for the government and in particular the Ministry of Agriculture and the Fisheries Department as to whether transparency and propriety will prevail. It appears that two seabob trawling licences were issued under the new government in breach of a longstanding voluntary commitment not to expand these because of overfishing. The new licences also threaten to undermine international Marine Stewardship Council sustainability certification that had been secured by local operators. This matter was drawn to public notice by the Guyana Association of Trawler Owners and Seafood Processors (GATOSP). It must be applauded for taking a stand as opposed to the supine silence or the behind-the-scenes dealing that tend to occur in matters of this nature. The ministry is said to be investigating the award of the licences. We shall see.
