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Budget Focus 2008

2007 was the year of Cricket World Cup, the single largest sporting event ever held in Guyana. It was an event on which billions were spent by the Government of Guyana and the private sector, yet there has been no analysis of the returns and the extent to which expectations were met. Significantly, visitor arrival numbers were about 12% above the preceding year. With World Cup done, we do have tourism and infrastructure assets but the Stadium for example, which may have cost close to $10Bn to build, will have to be maintained at substantial annual cost.

Budget 2008 which had been planned for earlier in the year became a casualty of both the Lusignan (January 26) and Bartica (February 17) massacres. In the latter case the presentation was set for February 18th but the massacre on the evening before forced a cancellation. It was presented four days later on February 22.

Despite the extra days and the gravity of the situation only one paragraph on the Bartica massacre appears to have been added to the Budget Speech. The work of the Government and the nation must of course go on but the events of the weeks preceding the budget should have impressed on the Minister the pressing issues confronting the nation – crime, the increasing threat of flooding, inflation and the brain drain. To the extent that he dealt with any of these it was how many billions the Government was going to spend.

The ability of the economy to withstand the pressures of crime and spiralling prices will be tested in 2008 as Carifesta returns to Guyana. This and other significant events such as local government elections, the completion of the Berbice Bridge and the Skeldon Modernisation Project were the backdrop against which Minister of Finance Dr. Ashni Singh presented a G$119Bn budget – 8.5% higher that the latest estimates of 2007.

Please download the full publication at www.ramandmcrae.com

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Compensation for lives and properties

Introduction

It took the January 26 massacre in Lusignan to bring home to the government that it had to confront the situation on the lower East Coast. Typically, one of its responses was to react to the calls by residents to “deal with” the Buxton crisis that has been festering for years. Despite an army presence over a couple of years the solution to what the government sees as the criminal dimension to Buxton seems as far away as when Shaka Blair was killed by the police in 2002.

Last weekend I again visited Lusignan meeting with relatives of the victims whose hopes for improvements in their daily lives are rapidly receding. The wish of many is to pack up and get out, not only from the community but from the country. All these persons claim to have been lifelong supporters of the PPP/C – and indeed the results from successive general elections would support this. As a community they feel deserted, with very little interest shown by officialdom after the initial public intervention.

Hopelessness

And over at Buxton, which I also visited, the situation is both different and similar. Hopelessness envelops a once glorious village and poverty is all around. This too is a village that except at one election has given its full support to the PNCR for which it seems to have received little in return. It is a broken community where, like Lusignan, any semblance of participatory democracy vanished decades ago. This is despite the fact that we now have three experienced ministers with relevant experience in the Ministry of Local Government – another example of a waste of taxpayers’ money and the creation of state jobs for party persons.

In their desperation, these communities now alternate between a dream that their political leaders will represent them and anger at themselves for even thinking this will ever happen. Yes the government went in the early days in Lusignan and in their typically imaginative manner even opened an account with one of the shops in the area where those who suffered direct losses could get some material assistance. And in Buxton the leaders of the PNCR have been visiting almost daily to meet with the residents including those who operate farms, but who are now subject to formidable restrictions on access to their farms.

Police capacity

While the government appears to have back-pedalled from the initial decision to clear all the farms in the backlands to improve security, it appears that there is still considerable clearing being done and that the police have been assigned responsibility for assessing and paying. It has been a long time since the government has shown such confidence in the police!

I am not convinced that the police under the Police Act have the authority or the capacity to assess and make compensation payments in what is a very complex technical issue. In fact every Commissioner of Police I have spoken to since 1993 has admitted that the force does not have the capacity to investigate more than basic fraud cases. How it will move from that level of incapacity to being able to assess losses and award compensation beyond the kind we had in the 2005 floods is to be seen. We recall that in 2005, surveys and data bases were conducted at some cost, which should mean that records are available to make some advances to those who suffer losses while their claims are prepared and submitted and for examination and payment.

Before President Jagdeo set up the Commission of Enquiry into the allegations against then Home Affairs Minister Gajraj, it had been suggested that a wider commission should be appointed to look into the matters concerning the East Coast. There can be no better time for that than now with the question of compensation high on its terms of reference. Despite our experiences with the flood we have no legislation or regulations governing the payment of compensation and instead the government relies on benevolence and ‘ad hocism’ to guide policy in this critical area.

Compensating agriculture

Despite the agricultural base of our economy we do not have a Compensation Fund or national insurance system for the sector. Agriculture, even in the best of circumstances is typified by persistent, high and a wide range of risks which could come from rain, sun, drainage and irrigation issues, pests, El Nino and La Nina, poor farming practices and good old government incompetence. Our present Minister of Agriculture holds an MBA, and while this may not have been in agriculture it should allow him to formulate a suitable compensation scheme for “his farmers.”

The Minister would find compensation schemes for agriculture as recent and as close as in Jamaica in August 2007, in South America, in Canada and the US, Europe and Asia. The one model that I especially like is that of Vietnam, setting out in considerable detail the basis for entitlement of compensation arising out of a 2003 resettlement scheme which had as its focus health care.

Constitutional guarantees

Given our own experiences, Guyanese would of course be cynical about whether what is set out in theory and law does in fact operate in practice. Usually it does if the citizens and their leaders hold the government accountable. Our constitution and the Investment Act 2004 guarantee citizens adequate and timely compensation, but for all practical purposes those guarantees seem to have been suspended when it comes to Buxton. The farmers who are suffering losses as a result of what Dr Luncheon calls the ‘line of sight’ initiative would certainly be affected, but when a people feels as deserted and dis-empowered as those communities do, constitutional rights are a useless luxury.

In the case of Vietnam, at the very early stages of project preparation, local authorities and leaders of different administrative levels in each of the communities affected were consulted and participated in the project design, while affected persons were informed on an individual household basis. The scheme provided for compensation for assets, income and businesses at full replacement cost with compensation for land regardless of the nature of ownership, while investments made on trees and crops are compensated at full replacement costs at current market prices. The headings under which compensation arose are: agricultural land; temporary loss of agricultural land; secondary affected persons; loss of structure; loss of business and income; loss of crops; and allowance during the transition period.

Guyana and Guyanese have the capacity to rise to this level of thinking rather than some mistaken belief or indeed strategy that we strengthen our own position when we fail to empower others. In fact all we do is push them towards the poverty mill from which the only escape route is out.

What about Lusignan?

This community has lost property and lives, but except in the most objective and impersonal way, it would be impossible to place a value on the lost lives. Yet, is it asking too much that even as it considers compensating the people of Buxton for their crops, that the government go beyond items from a friendly hardware shop and assist the residents of Lusignan who must now look only to private initiatives such as the one by Kaieteur News.

There is nothing revolutionary about victim compensation programmes to provide financial compensation for victims of violent crime. Such programmes are found around the world and in 2000 neighbouring Trinidad and Tobago proclaimed The Criminal Injuries Compensation Act, although I have been unable to ascertain whether the board to administer it has yet been brought into existence.

A typical financial compensation programme provides compensation of defined amounts to victims of reported violent crime who suffer serious injuries, dependants of deceased victims and scholarships for bereaved children. Injuries are not confined to physical or fatal injuries, but may be a medically recognised psychiatric or psychological illness. The schemes are generally statutory and there is no question of benevolence or handouts by politicians. Victims receive these as of right.

Conclusion

The festering problem of Buxton and the massacre in Lusignan must surely wake up the country to the backward state of our laws and management of the country. The absence of local democracy is exacerbating an already fragile national democracy. There is no logical, fair and timely system of compensation for our farmers arising out of natural disasters; databases created one year are destroyed the next. In matters of policing and security, there is an increasing tendency by the state to delegate security to the citizens by way of community policing, while victims are often left to fend for themselves. The knee-jerk reaction to clear the backlands, its almost daily modification and amendment and a display of the most incompetent judgment as to who should evaluate and manage an agricultural compensation programme are as clear signs as we can get that those with the duty to protect our communities have little idea how to do so.

It is time that there was a Commission of Enquiry to look at the whole of the East Coast, including Buxton and Lusignan, and that this be as wide-ranging as possible. We can then have a thorough examination of the root causes of the problems we are facing, no doubt including pitiable pay to the police, local government and economic issues, and consider sensible ways to compensate communities. Since Lusignan, such rational questions have been pushed off the bus.

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A bridge over the river – a dream come true

Recently a Berbician friend in anticipating the opening of the Berbice Bridge within the next few months exuded that for her – she is about 50? – a Bridge has been a dream she entertained since she was a girl. It will be a major accomplishment in infrastructural development in this country and will probably mark the high point of the legacy of President Bharrat Jagdeo.

Compared with other capital projects undertaken in this country since Independence, it does not rank among the most expensive but the Government will rightly see it as one of the most significant capital projects undertaken during the PPP/C’s watch.

The opening of the Bridge will mark the end of a bad dream for Berbicians living in Region 6 especially those whose experiences and tales of being stranded on one side of the Berbice River waiting to cross to the other can easily fill volumes. There have been several criticisms of the Bridge including its financing, location and type. Financing will come from the private sector after some strong persuasion by the Government which itself will make no direct financial input; the location has been criticised on environmental and technical grounds; the nature of the Bridge which like the Demerara Harbour Bridge built by Forbes Burnham in 1978 is a floating bridge.

Welcome Relief

The Bridge will soon be a reality and the Government will deservedly take the credit for the achievement which coming so soon after the Lusignan Massacre will be a welcome relief. Despite the fact that the Bridge is touted as a private-sector project its chief spokesperson and key player has been Mr. Winston Brassington of NICIL, the holding company of Government entities, with the company itself being much less visible. The role of NICIL which should have come to an end after financing had been secured appears to have been extended though at some stage soon the Bridge Company would need to find its voice.

Expect therefore that the Bridge will feature prominently in the 2008 Budget Speech [see follow-up article below] and in public pronouncements. Still it would be un-Guyanese-like not to have critics waiting to see whether their fears will be vindicated while those private sector investors will no doubt be nervously looking to see how the numbers will turn out and whether their investment will produce the returns they expected. For Berbicians more concerned with living their dream, that would be the last thing on their minds.

The Louis Berger Group, the consulting firm out of the USA, contracted to undertake the feasibility study of the Bridge considered the Berbice River a major physical obstacle to communication between New Amsterdam and Georgetown and a key constraint on national economic development. With some of the most productive agricultural lands located in Region 6, the cost of moving goods and produce out of that region has been enormous with constraints and delays in vehicles being able to cross the River.

Optimism

The Study was optimistic about the Bridge’s potential for revitalising the region, making its produce more competitive, providing employment opportunities, attracting investors and just perhaps reversing the brain drain. Perhaps a bit over-optimistically it even contemplates a reduction of fares by the minibus operators since the Bridge will reduce the down time they now spend using the ferry.

Indeed Mr. Brassington has said the tolls for crossing the Bridge will not be higher than ferry fares “on average” and that fares will be paid on one side of the bridge while tolls will only be collected for vehicles and not passengers. Mr. Brassington in March 2006 projected a reduction in the fares in the latter half of the concession period with most of the initial financing being repaid for the project.

Over the decades, the region has witnessed significantly large population decreases but recognising it as its heartland, the PPP has since its return to power in 1992 committed itself to greater attention there whether in education, agriculture or infrastructure with significant investments in the Berbice Campus of the University of Guyana, the massive Skeldon Sugar Modernisation Project and rebuilding of the main roads leading from Mahaica to Rosignol and New Amsterdam to Crabwood Creek.

Sore need

Writing in Business Page of March 12, 2006, this columnist noted that a Bridge was sorely needed while a consultant who advised against investing in the Bridge conceded that as a project it was excellent, much needed and long overdue. The challenge for the company is whether the projections and assumptions underlying the project, particularly in relation to traffic and revenues, do in fact materialise or whether they are simply too optimistic.

For the user, such considerations pale into irrelevance when matched against the usefulness of the Bridge to them.

Budget 2008

At this time of the year, attention usually turns to the National Budget in which the Government signals its intention on policies, revenues and expenditures for the year. Some were even expecting that the 2008 Budget would have been presented this past Friday. But with the Lusignan Massacre still on the minds and lips of everyone and with no success at apprehending any suspects, the Government may have found it difficult to deliver an upbeat account of its stewardship and spending plans in the midst of fear and uncertainty.

The Government has up to March 31 to present the Budget although it would be ideal for the Budget to be presented before the year begins. Instead all we have had from the Minister of Finance is a request last month for the National Assembly to authorise some $9,398,373,968 to cover overspending by the Government which itself followed a similar request in November for $8,679,412,56.

Consultations

Overspending never reflects well on managers since it is evidence of inadequate planning and foresight. We will return to this matter in a subsequent column but for now there should be some concern about the failure of the Minister of Finance once again to consult with stakeholders prior to the Budget. Such consultation was standard fare with past Ministers of Finance who at least gave an audience to labour, consumers, business and even welcomed inputs from professionals.

It is true that the real benefit of those consultations was lost because the exercise was mere photo-opportunism. But the solution lay in enhancing, not dispensing with the process. In other words use the information gathered as far as could be done, explain why others were not feasible and build relationships with the stakeholders. Instead we seem to be throwing away the baby with the bath water.

President Jagdeo, who still exerts an unacceptable level of influence over the Ministry of Finance felt it necessary to appoint two Ministers in that Ministry and it is hard to believe that neither of them can meet with stakeholders who after all pay the taxes that fund the Budget. A Government that takes pride in its democratic credentials does not normally make changes without at a minimum advising the public and offering reasons.

In fact, in his last Budget speech former Finance Minister Saisnarine Kowlessar lauded the views of the private sector bodies, labour unions and ordinary Guyanese, thanking them for their contributions, which we [the Government] value highly. Has that now changed and if so by whom?

Troubling attitude

If the change is due to a new approach by Minister Dr. Ashni Singh this column wishes to place on record its strong displeasure at such high-handed behaviour. I recall publicly commending the appointment of Dr. Singh as ushering in a new, positive era and was actually criticised for going overboard in my praise of the Minister.

There have been concerns recently that the Minister is obsessed with concealing information to which the public have a right, such as data on inflation and VAT collections. I am sure the Minister does not need to be reminded that there is no monopoly on wisdom and the people must never be excluded.

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He was modest, a good raconteur and great company

The death of Mr. Deryck Bernard who returned from Trinidad and Tobago two weeks ago for the funeral of his mother came to me as a great shock. To his wife Myrna, children Ayanna and Denyse and to siblings who had just returned to their homes abroad, it was a cruel blow. May God in whom Deryck believed and served by way of good and selfless work to the people of this country give them the understanding and strength to cope with yet another personal tragedy.

Within the past years, Deryck, an avid seeker of truth and learning embarked on a course of study to become a lawyer. He was an outstanding student who was willing to challenge the status quo, questioning the administrators and lecturers about the failure to teach concepts such as Islamic, Feminist and Marxist Jurisprudence and challenging notions and practices to which the legal profession seems unshakably bound.

Within weeks of being at the Hugh Wooding Law School he soon earned the respect of the administration and his colleagues. In fact, a couple of weeks ago, Deryck was asked without prior notice to comment on the process of legislative enactment under the Westminster Model. I felt proud at the eloquence and clarity of his account which was met by spontaneous applause from the entire class.

He was also a modest individual, a great raconteur and great company. He was quietly but passionately patriotic and was already planning the annual Guyana Night to be the best show ever put on at Hugh Wooding Law School.

I will miss him, the exchange of visits, the exchange of notes and ideas, his generosity and the regular conversations he, Donald Rodney and I shared over inexpensive meals appropriate to students.

As Deryck put it, our age would not allow us the luxury of learning on the job but required that we hit the ground running. Deryck did not live to see that dream or to write several more books or short stories.

His death is a huge loss to our country. The students at Hugh Wooding Law School will miss him.

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The Special Select Committee appointed to deal with the report of the Disciplined Forces Commission never reported

I spent Sunday morning visiting friends in Lusignan and the homes attacked in the massacre there. While I was moved by the accounts of devastation and grief and the tale of horror of those who lost loved ones, I do not pretend that I can fully appreciate the damage to the community and the trauma to the surviving close relatives. To put a father, mother and child on a sofa at 1.30am and shoot them at point blank range is something associated with the Nazis, not Guyana.

No doubt it was an act of unspeakable horror for Guyana and those responsible should pay for it. But the question is where does the responsibility end?

Since 1993, when Monica Reece was murdered and her body dumped in downtown Georgetown, citizens have been calling for action by the Government to stem the rising tide of lawlessness that was enveloping Guyana. Instead, we have since witnessed cycles of unsolved murders of a Minister of Government, a prominent media and African rights activist and hundreds of others. After each wave we are treated by the Government to the same banalities about what it will and will not do and from the opposition political parties to what the Government should have done but did not do. And there the matter would end until the next major round of murders.

Various reports such as the Symonds Report and the Disciplined Forces Commission Report were swept aside to make room for indicted New Yorker Bernard Kerik and a politically controlled and ineffective National Commission of Law and Order.

For these failed initiatives the President and his Government must accept inescapable responsibility. But they are not the only ones that are culpable. On May 16, 2003, the National Assembly set up the Disciplined Forces Commission (DFC) comprising Justice Ian Chang as Chairman, recently appointed Appeals Court Judge Charles Ramson, Anil Nandlall and Mr David Granger and Ms. Maggie Bierne of Northern Ireland who was replaced on her resignation from the Commission by Professor Harold Lutchman.

The Commission was required to “examine any matter relating to public welfare, public safety, and public order, defence or security, including the structure and composition of the disciplined forces and make recommendations generally with the view to promoting their greater efficiency and giving effect to the need in the public interest that the composition of the disciplined forces take account of the ethnic composition of the population!” The Commission handed in its report on May 6, 2004, almost four years ago.

It was a comprehensive document with some one hundred and sixty-four specific recommendations, many of which were then [and now] immediately implementable. But instead of action, the response of the National Assembly was to refer the report to a Special Select Committee with heavyweights like Mr Bernard De Santos as chairman, Ms Gail Teixeira and Mr. Doodnauth Singh from the government and Mesdames Clarissa Riehl and Debbie Backer and Messrs Basil Williams and Raphael Trotman from the opposition, all attorneys-at-law. That Committee met on ten occasions but never completed its mandate or submitted a report.

Strangely, the National Assembly did not revisit the matter again until July 26, 2007 (just remember the date for one moment) when it again passed another motion appointing yet another Special Select Committee to conclude the examination of the DFC Report. In the discussions on the July 26 motion, the most vocal critics of the government were ironically the opposition members of the first Select Committee, accusing it of tarrying while Guyana was burning from the heat of the criminals.

One of the opposition members even referred to the motion as a sad indictment of the National Assembly and the people of Guyana. How a trained attorney-at-law could find the failure by that body an indictment of the people of Guyana is surely a legal stretch but in its further confusion and dilatoriness, instead of treating the matter with the urgency it deserved, the National Assembly gave the Select Committee six months to come up with its recommendations on the recommendations.

Completely oblivious of the seriousness of their mandate and the deadline, the Committee on this occasion headed by Prime Minister Hinds and comprising Messrs. Rohee, Benn, Dr. Bheri Ramsarran, Bernard De Santos and Ms. Philomena Sahoye-Shury from the government and the same four from the opposition is yet to meet! I am therefore surprised at the statement attributed to committee member Debra Backer in the media that home affairs minister Clement Rohee is the chairperson of the committee since one would expect her to know such basic information.

Now for the significance of the date of the motion: the six months expired on the day the Lusignan Massacre took place!

At a minimum the failure of the National Assembly constitutes a dereliction of duty by all our Parliamentarians and Guyanese should accept no excuse for this gross incompetence but for which so many lives including the Lusignan 11 may have been saved. Mr. Trotman of the AFC has apologized on behalf of the politicians. To the dead and those close to them, such apologies are of course meaningless and for others the question is what next. Do the opposition parties not realise that their contribution to major crime events almost mirrors the Government’s React, talk and forget – until the next episode.

The Government bears primary responsibility for the management of the country but one of the functions of the opposition is to bring effective pressure to bear on the Government when it fails to do its job. Instead, like the Government they too seem to offer only blame and excuses.

Guyana weeps not only for those who lost loved ones but for ourselves for repeatedly putting our faith and our lives in the hands of an ineffective bunch of politicians. If after all of this we still accept facile excuses from the Government about the police, and from the opposition about the misuse of the PPP/C’s majority rendering them (the opposition) impotent, we as citizens will have only ourselves to blame.