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.

The future of GuySuCo and sugar – the Commission of Inquiry

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

GuySuCo bailouts unsustainable

The debt-ridden, loss-making, misdirected, mismanaged and ailing Guyana Sugar Corporation is the beneficiary of another bailout. This time we are told that Cabinet has approved a first tranche of $3.8 billion, or the equivalent of just under US$19 million. The announcement was made by Prime Minister Moses Nagamootoo at the observance of Enmore Martyrs Day, an occasion that has become a signature political event in Guyana. There was no indication whether the $3.8 billion is tied to any project, activity or otherwise, such as the payment of any debt obligations.

The PPP/C which gained the overwhelming support of sugar workers in the May elections had campaigned on a pledge to pump $20 billion into the ailing industry. And some days before the announcement of the bailout but after the elections, the now fired CEO of the Corporation had said that the Corporation needed $16B to avert an industry-wide shutdown.

Whatever the eventual bailout number will be, it is likely to be huge. Yet, the Granger Government could not risk a shutdown of the industry. Whether as the sole shareholder in GuySuCo, or as the Government, there had to be some decisive intervention. That however, does not make the circumstances any more comforting.

The announcement was made not by the Minister of Agriculture or the Finance Minister but by the Prime Minister whose portfolio centres around information. The use of the term first tranche obviously suggests further tranches and is not particularly reassuring. How many tranches can we expect and what would be the value? And significantly, where would the money come from?
Continue reading GuySuCo bailouts unsustainable

Expenditure on new ministries would be unconstitutional

The Guyana Times of Sunday May 24 (New Ministries created by Granger illegal – PPP/C) reports former President Bharrat Jagdeo and former Attorney General Anil Nandlall as stating that “the formation of new Ministries is illegal since monies cannot be released to those entities, which are not represented in the Appropriation Act.”

This is a bit ironic. President Donald Ramotar did exactly that when he created the new Ministry of Natural Resources and the Environment and appointed Mr. Robert Persaud as the Minister. This was long before the convening of the Tenth Parliament and the passage of the Appropriation Act 2012, assented to on April 30, 2012.

The fact that the PPP/C created a new ministry before any Appropriation Act was passed does not itself make President Granger’s action legal, or illegal. In fact, the creation of a new ministry in 2012 by the PPP/C was as legal as the creation of new ministries by the APNU+AFC in 2015. Article 100 provides for offices of the Prime Minister, Vice-Presidents and Ministers of the Government as may be established by Parliament or, subject to the provisions of any Act of Parliament, by the President.

Article 120 of the Constitution gives the President the power to constitute offices for Guyana [and] make and terminate appointments to such offices…” There is no requirement for an appropriation Act before the creation of any ministerial or other constitutional office and It would have been useful for Mr. Jagdeo or Mr. Nandlall to have pointed out the illegality of President Granger’s combined acts.

The Cabinet has a number of lawyers, two of whom are affected by the creation of these new ministries. I have no doubt that all these lawyers would have considered the constitutional ramifications of the action by President Granger and offered their views to the Attorney General, who is the principal legal adviser to the Government.

Notwithstanding the legality of the appointments, it does appear to me that the Constitution forbids the expenditure of any money on those ministries without parliamentary approval. Article 120 goes on to state that “where the constitution of, and making of appointments to, such offices involve expenditure chargeable on the Consolidated Fund, such expenditure shall be subject to the approval of the National Assembly.”

In my view “approval” in this article can only be reasonably interpreted to mean prior approval, and not approval by way of any subsequent, supplementary Appropriation Act. On my interpretation, any expenditure on these new ministries, including any payments to and for the ministers and the supporting ministers, would be unconstitutional.

Another GECOM let down

Once again, the role of GECOM in the determination and publication of the results of national and regional elections as well as its general functions have been highlighted. GECOM as it exists today is the product of the efforts to address widespread concerns that elections prior to 1992 were not free and fair. A limited reform process resulted in the 1992 elections being conducted under a seven-person Commission made up of three members named by the Government, three by the Opposition, and the Chairman selected by the President from a list of six names submitted by the Leader of the Opposition is often referred to as the [President] Carter formula.

While politically the formula was considered acceptable since both “sides” of the divide felt represented in the process, it was intended to be a temporary arrangement to be reviewed for subsequent elections. Inertia set in and the formula has remained unchanged for all five elections since 1992. It should not continue.
Continue reading Another GECOM let down