It was a serious error to treat a special package for the AG as a benchmark

Prime Minister Moses Nagamootoo appears to have intended to dismiss the public’s response to the 50% salary increase for Cabinet members in describing it [the response] as “comparable to beating a dead horse”, adding that “this rage has run its course”. (SN Oct 22 ‘Pay hike necessary to offset ministers’ loss of earnings’). The latest evidence to the contrary is a letter by Mr Nowrang Persaud in yesterday’s Sunday Stabroek (25-10-15) ‘Attorney General’s salary should have been red-circled’.

In his letter, Mr. Persaud refers to a report touching on the differential between the salary of the Attorney General and the rest of the Cabinet on the need some decades ago to ‘import’ a Guyanese legal luminary with unique competences. In his last week’s Stabroek News column on the subject of the increases, Mr. Ralph Ramkarran had identified the package offered by Prime Minister Burnham to Sir Shridath Ramphal. Mr. Ramphal was at the time working in a top law firm in Jamaica, and in his new position in Guyana would be designated responsibility for two disparate portfolios – Attorney General and Minister of State for External Affairs – with the additional task of drafting the emerging country’s Independence Constitution.

It seems from his writings that Mr. Ramphal did his best to discourage Mr. Burnham from employing him: he would only accept the position as a technocrat without party affiliation; was doing well financially in Jamaica with his family; if for any technical reason he had to sit in the Legislature, he wanted no vote and would not be subject to any party whip. But as he said, Forbes Burnham was not easily put off and agreed to all his conditions, presumably salary included. Continue reading It was a serious error to treat a special package for the AG as a benchmark

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

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

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

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.