Author: ChrisRam

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That 50% salary increase

After less than five months in office, members of the Granger Cabinet have decided to award themselves salary increases of 50%. The increases take effect from July 1, so that the increase of 50% was after less than six weeks the Ministers had been on the job. When the press approached him some months earlier, Governance Minister Mr. Raphael Trotman had said there would be no astronomical increases. But is it not astronomical when compared with what Cabinet approved in the Finance Minister’s Budget for government employees and pensioners?

In that Budget, the minimum salary in the public service was increased from $42,703 per month to $50,000 per month, or 17.1%. But there was a catch: unlike every other year in the past thirty years, the increase was for half the year only. The effective increase then, for the people at the bottom of the scale, for 2015 over 2014, is 8.5%. For public servants receiving a salary of $100,000, the increase was 10%, or 5% over a full year, and for those receiving $200,000 and $500,000 the effective annual increase was 3.75% and 3.0% respectively. There was an additional increase of $5,000 per month for persons above the minimum wage. Note that for public servants the higher salaries attracted lower percentages and lower salaries attracted higher percentages. Cabinet clearly did not think that principle applied to them. The APNU+AFC’s 100 days commitment was “Significant salary increases for government workers, including nurses, teachers in primary, secondary and tertiary education; security personnel; and civil servants on the traditional payroll.”

And how about pensioners? Ram & McRae’s Budget Focus 2015 had noted that 2015 pension increases were subject to no retroactivity. And while the Finance Minister announced a $3,875 increase in the monthly pension from September 1, 2015, the Budget withdrew the monthly subsidy of $2,500 and $990 for GPL and GWI previously enjoyed by pensioners. Net increase: $385 per month but payable from September 1, an increase in 2015 of less than 1%! The APNU +AFC’s 100 days commitment was “Significant increase in Old Age Pensions”. Continue reading “That 50% salary increase”

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Addressing the crisis in Sugar

A presentation by Christopher Ram to the Commission of Inquiry into the Sugar Industry

Introduction
The Guyana Sugar Corporation (GuySuCo) is not only a company incorporated and intended to be regulated under the Companies Act; it forms a major part of two economic sectors – agriculture and manufacturing. See Appendix 12 – Gross Domestic Product at 2006 Prices by Industrial Origin in Volume 1 of the Estimates of the Public Sector 2015. It is also one of the largest employers in the country and in some areas, such as the Corentyne, it is the single most important economic activity and source of employment.

To the country it is a major foreign exchange earner although it is also a significant user of foreign exchange. It is believed too that the company and the industry also support the rice and other agriculture sub-sectors in sugar areas, and help to manage the anti-flood control systems with its vast network of drainage and irrigation. If the multiplier effect is considered, the economic impact is extended directly and indirectly to commercial banks, insurers, suppliers and service providers.

Alas, it is also – certainly in the last few years – the single largest beneficiary of government subsidies in Guyana. It is estimated that in the five years to December 31, 2015, the company would have received approximately G$50 billion in transfers from the Government. In 2015, 10% of current revenues of the Government proper will be going to GuySuCo, amounting in total to approximately ⅓ of the total employment cost in the 2015 Estimates of Expenditure.

Importantly, like the elephant in the room, sugar has a strong political dimension and forms a major plank of support for the opposition PPP/C. Paradoxically, even when the company came under the control of the PPP/C, GuySuCo has recorded more industrial action than the rest of the country combined.

This Commission of Inquiry (CoI) therefore has an unenviable job with wide-ranging terms of reference on a matter that has provoked intense debate with some persons calling for the shutting down of the industry while others have called for it to be phased out. Leading economist and expert on sugar economics, Dr. Clive Thomas has described the corporation as having Passed the Point of No Return: See Sugar beyond the point of no return: Stabroek News January 8, 2014 while the author of this submission has written that GuySuCo bailouts [are] unsustainable, see chrisram.net June 20, 2015. Continue reading “Addressing the crisis in Sugar”

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Addressing the crisis in Sugar – A presentation by Christopher Ram to the Commission of Inquiry into the Sugar Industry

Introduction
The Guyana Sugar Corporation (GuySuCo) is not only a company incorporated and intended to be regulated under the Companies Act; it forms a major part of two economic sectors – agriculture and manufacturing. See Appendix 12 – Gross Domestic Product at 2006 Prices by Industrial Origin in Volume 1 of the Estimates of the Public Sector 2015. It is also one of the largest employers in the country and in some areas, such as the Corentyne, it is the single most important economic activity and source of employment.

To the country it is a major foreign exchange earner although it is also a significant user of foreign exchange. It is believed too that the company and the industry also support the rice and other agriculture sub-sectors in sugar areas, and help to manage the anti-flood control systems with its vast network of drainage and irrigation. If the multiplier effect is considered, the economic impact is extended directly and indirectly to commercial banks, insurers, suppliers and service providers.

Alas, it is also – certainly in the last few years – the single largest beneficiary of government subsidies in Guyana. It is estimated that in the five years to December 31, 2015, the company would have received approximately G$50 billion in transfers from the Government. In 2015, 10% of current revenues of the Government proper will be going to GuySuCo, amounting in total to approximately ⅓ of the total employment cost in the 2015 Estimates of Expenditure.

Importantly, like the elephant in the room, sugar has a strong political dimension and forms a major plank of support for the opposition PPP/C. Paradoxically, even when the company came under the control of the PPP/C, GuySuCo has recorded more industrial action than the rest of the country combined.
Continue reading “Addressing the crisis in Sugar – A presentation by Christopher Ram to the Commission of Inquiry into the Sugar Industry”

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Government’s decision to allow only three days for consideration of the Estimates is not justifiable on any grounds

If there is a single public issue in which Ram & McRae and I have devoted consistent interest it is in matters pertaining to the budgets of the public sector. Indeed, ‘Focus on the Budget’ can be considered the firm’s flagship publication, marking its 25th issue with the 2015 Budget. It is therefore with deep concern that I write to express my disappointment and displeasure at the decision by the government to allow only three days for the consideration of the 2015 Estimates.

The Standing Orders of the National Assembly set a maximum of seven days for consideration of the Estimates of Expenditure by the Committee of Supply made up of all members of the National Assembly. It is true that when the PPP/C was in power, it sought to restrict debate much to the displeasure of the opposition.

But it is also true that when the opposition APNU and AFC controlled the National Assembly they forced the debate to extend closer to the maximum. Why then is there a different standard when the same opposition parties are in government?

The three volumes of the Estimates for 2015 run to 1,616 pages compared to 1,305 pages in 2014. But it is not a matter of number of pages only. These Estimates contain expenditure for which there are three separate constitutional and financial provisions: the first is for the four months January to April, during which monthly expenditure to meet the cost of services of the government is limited to one-twelfth (1/12) of the expenditure for the preceding year; next is for the period May 1 to the passing of the 2015 Budget, during which expenditure is restricted to public services; and thereafter, expenditure approved in the Budget.

Anyone who has seen how the Audit Office’s incapacity has been exposed would realise that this is perhaps the only opportunity for any serious discussion and examination of the expenditure for these respective periods. The decision by the government therefore has the unavoidable effect of inhibiting any discussion and examination of expenditure not only up to April 30 but also during the second phase which fell under the old and the new administrations.

I reiterate that Guyanese of whatever persuasion or political affiliation need full and complete information on how their money is spent. There is no better forum that our parliamentary system has devised than the Committee of Supply.

Of the sixty-five members of parliament, there are eleven new MPs from the government side and ten from the opposition. They have hardly completed their understanding of the financial provisions of the constitution, the Fiscal Management and Accountability Act, and the Standing Orders pertaining to their role as members of the Committee of Supply before they are expected to act as if they are better equipped than their predecessors.

I fail to understand or accept as justifiable on any grounds whatsoever, the government’s decision. I am not at all convinced that the purpose of accountability, transparency and public education is served by this truncation of the debate.

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The future of GuySuCo and sugar – the Commission of Inquiry

Introduction
My last blog post followed the announcement at the annual Enmore Martyrs Day observance that the Cabinet had approved bailout money for the ailing state-owned Guyana Sugar Corporation (GuySuCo). The announcement of some $3,800 million of bailout money was reported in the Stabroek News of June 17. One week earlier, the Minister of Finance had been reported as stating that Parliament was the body to approve any bailout. Seems bailout was done anyway, without parliamentary approval. And as some have suggested, in violation of article 219 (3) of the Constitution which permits only expenditure on the public services when there have been elections and no budget.

There was at the time an indication that a Commission of Inquiry would be appointed and I welcomed it on what I understood such Commissions of Inquiry to be. Not too long afterwards, consistent with a commitment made in the APNU + AFC Manifesto, the Minister of Agriculture announced such an Inquiry into the operations of the Corporation.

The Commission’s members are: Mr. Vibert Parvattan (Chairman), Prof. Clive Thomas (Financial and Economic Analysis), Dr. Harold Davis and John Piggott (Agronomists), John Dow and Joseph Alfred (Factory Operations), George James (Sugar Processing), Nowrang Persaud (Industrial Relations), Claude Housty (Marketing) and Mr. Seepaul Narine, a representative from the main sugar workers’ union GAWU.

By my reckoning the majority of the members have had some association with GuySuCo and bring relevant experience to the exercise. But even relevant in this case seems inadequate. For starters, it seems both misleading and a misnomer to call the body a Commission of Inquiry. The members were appointed not by the President under the Commission of Inquiry Act but by the Minister of Agriculture as an administrative act. And significantly, the focus is more about GuySuCo than about sugar generally.
Continue reading “The future of GuySuCo and sugar – the Commission of Inquiry”