Author: Christopher Ram

Business & Economic Commentary by Christopher Ram

Introduction
Today’s column notes the absence of the 2025 Mid-Year Report required under Section 67 of the Fiscal Management and Accountability Act (FMAA), a vital part of the financial and governance architecture of Guyana. Section 67 of the FMAA requires that the Minister of Finance, within sixty days after the end of each half year, to prepare and submit to the National Assembly a mid-year report. The contents of the report include the actual versus the budgeted fiscal performance, an update on projections, and a statement of measures proposed by the government.

The 60-days deadline passed since the end of August and is now more than six weeks overdue. From all appearances, the report has been an unintended casualty of the dissolution of the Twelfth Parliament, the September 1 elections, and the delayed convening of the Thirteenth Parliament. But this omission is not some clerical oversight. It is a breach of the law and a blow to fiscal transparency. As an official publication, it could have been issued under the authority of the Official Gazette. Creativity is in making things happen – not in how to circumvent the law with impunity.

The duty imposed by section 67 is on the Minister – not on Parliament. The Act is silent on the dissolution of the National Assembly, but silence does not suspend the obligation. Nothing prevents the Minister from completing the report within the legal timeframe and making it public, even if formal tabling must await the Assembly’s reconvening. Accountability should not pause because Parliament is asleep. Elections may suspend politics; they do not suspend the law.

Guardrail of accountability and democracy
Inexplicably, and despite an impressive and expansive agenda, nearly seven weeks after the elections, President Ali has failed to convene Parliament. It is hard to believe that a Party with an enhanced majority would stretch this dormancy for the full period allowed under the Burnham Constitution – as they used to like describing our founding document. By the time the Mid-Year Report is finally tabled, the fiscal year will be almost over, and the report’s purpose and functions destroyed. A mid-year report published at year-end is a contradiction in terms. It becomes historical trivia rather than a management tool for mid-course correction.

Paradoxically, the September elections made the timely availability of the report of greater importance in making a more informed choice. Its availability would have allowed citizens to compare the latest performance of actual with budgeted revenues and expenditures, assess the economy’s direction, and the government’s financial management. Contesting parties would have had a clear and timely picture of the country’s finances and the conditions they would face, if elected. Without it, everyone was operating in the dark, a dangerous place to be in an election year when spending pressures and political temptations intensify.

No technical lapse
Bad as that was, the continuing delay in making the report available has broader implications. The government’s failure to observe even the most basic fiscal reporting obligation is no longer a technical lapse: it forms part of the quiet dismantling of democratic and governance guardrails that has been taking place for some time now. When governments ignore statutory duties, when Parliament sleeps, and when oversight bodies choose silence, the architecture of accountability collapses, gradually but inexorably, until barely the shell of a frame is left standing.

We note too that the half-year report of the Bank of Guyana is also outstanding for this year. The Bank of Guyana Act requires the Bank to prepare and transmit a report for that half year to the Minister of Finance. Exercising its operational independence, the Bank ought to consider itself free to post the report on its website as soon as it has sent the original to the Minister. It is not required to get the Minister’s approval, particularly if such approval is conditioned for the wrong reasons.

If one assumes that the Bank has met its statutory obligation regarding the half-year report, the omission by the Minister takes on a greater significance. It makes his duty all the more pronounced. 

It would be good too, if the Guyana Revenue Authority and the National Insurance Scheme, which both fall under the Minister of Finance, were to follow good practice in tabling annual and mid-year reports promptly. Accountability cannot be selective, or one-sided. A government and statutory bodies that demand compliance from the public on pain of penalties must at least obey the law, and desirably, follow good practice. If Parliament permits open breaches without consequence, it becomes complicit in executive lawlessness.

The Government of 2020 – 2025 remained in place following dissolution, functioning quite normally. The Minister remained the Minister, enjoying the full benefit of his technical and administrative staff responsible for the report’s preparation. If the Government takes accountability seriously, then there can be no excuse for the omission.

Conclusion
The overlap of Parliament and the executive means that Parliament behaves like an adjunct of the executive. It should be free to call out Ministers and public officers, even of statutory bodies, who breach their statutory obligations. It is an indictment of public sector management of this country that persons can fail egregiously in complying with the law and the performance of their duties but face no consequence.

Irony of ironies – the de jure Minister of Finance is the President himself. Dr. Ashni Singh is the minister responsible for finance in the Office of the President. What a confused state of affairs we face. How this confusion is resolved is anyone’s guess.

Notwithstanding, the publication of the mid-year report is a necessary start. And oh, the report on the 2022 Census!

Business & economic commentary

The President’s recent announcement of a series of foreign-exchange measures has drawn wide attention, including a Stabroek News article quoting newly elected APNU MP and businessperson Terrence Campbell and the writer of this column. While some question why such an initiative came from the Head of State rather than the Minister of Finance or the Governor of the Bank of Guyana, the more rational interpretation is that it reflects how seriously the Government views the currency situation. In an economy buoyed by petroleum revenues yet facing persistent shortages of foreign exchange, the measures are clearly intended to restore order, discipline, and confidence.

This column shares those objectives. Foreign exchange leakages, under-invoicing, tax evasion, and parallel-sector markets are real concerns. The issue is whether the instruments chosen are a knee-jerk response or carefully designed to achieve results without reviving the inefficiencies of an earlier era. The law of unintended consequences often causes such measures, if poorly grounded or unevenly applied, to produce results opposite to those intended.

A question of balance

The actual operationalising of some of the measures will require amendments to existing law and, in some cases, may clash with current statutes. But for reasons neither apparent nor desirable, the President seems in no hurry to convene the Thirteenth Parliament. In other words, without statutory force, some measures are open to challenge, though it is doubtful that any businessperson would be so brave.

At the heart of the new regime are extensive reporting requirements. Importers must now provide invoices and Bills of Lading to their banks, which will share them with the Guyana Revenue Authority and the Bank of Guyana for verification. Travellers taking foreign currency abroad must declare the source of their funds, and credit cards are to be used strictly for personal purposes. Individually, these steps may appear reasonable and necessary; together they represent a shift from long-tolerated practice, to bureaucracy and control.

To the uninitiated, the reappearance of multiple layers of approval in an oil-rich economy may seem paradoxical. The intention is to tighten oversight, but it can just as easily invite delay, discretion, corruption, uncertainty, and – heaven forbid – currency flight.

The other side

To the experienced, danger lurks not only in the laissez-faire economic management of recent years but also in weak fiscal foundations. By failing to address the tax provisions of the 2016 Petroleum Agreement – under which the State pays the oil companies’ taxes from its own share – Guyana’s tax-to-GDP ratio has fallen sharply. This loss of capacity has forced greater dependence on borrowing and reduced the tools available to manage volatility.

Decades ago, planning was relegated to the back seat, and since 2020, the Ministry of Finance itself lost its status and independence, folded into the Office of the President, with a preference for populism over fiscal rectitude. Conflicting policy signals – such as uncertainty over further cash-grant schemes, including non-residents – add to the confusion between generosity and sustainability.

Some measures may also conflict with the Investment Act 2004, which guarantees investors non-discriminatory treatment and the right to repatriate capital and profits freely, and with the confidentiality provisions under the Revenue Authority Act and the banker–client relationship. Oversight must never come at the expense of legality; fairness is better served by clear law than by executive fiat.

Asymmetry

The new rules reveal a structural imbalance. Under Article 22 of the 2016 Petroleum Agreement, ExxonMobil, Hess, and CNOOC enjoy fiscal and exchange-control stability, protected from any new laws restricting transfers or profits. The nine measures therefore apply mainly to other importers, manufacturers, and traders. Many ask why they should play by the rules when the key players in the economy are treated with an annual bonanza.

After the announcement, the President was celebrating the opening of yet another fast-food outlet – Wendy’s – that will no doubt be a major user of foreign exchange, in royalties, raw material, packaging, etc. A government cannot credibly lament shortages while simultaneously expanding outlets for its export.

Echoes of the past

Older Guyanese will remember the External Trade Bureau of the 1970s, created by then Prime Minister Forbes Burnham, to allocate foreign exchange and “rationalise” imports. It soon displaced the market, approving the favoured, delaying the rest. What began as order ended in scarcity, corruption, and a thriving black market. See article on underground economy one.

The Bank of Guyana, pivotal then as now, spent resources stamping passports for fifty dollars while its wider role languished. At the same time, the wealthy and technologically adept have migrated to digital channels. For the sophisticated and the barons, cryptocurrency, electronic wallets, and offshore platforms have replaced the briefcases and cambios of the past. The underground economy has gone online.

Conclusion

The measures announced are well-intentioned and motivated by genuine concern for stability. Yet intent cannot replace legality or consistency. The Investment Act, the Bank of Guyana Act, and the Revenue Authority Act all require that policy be exercised through law, not discretion.

Guyana has here before. Not with oil, but with measures rooted in good intention, corrupted in practice, and resulting in catastrophe from which it took time and pain to recover. The challenge this time is to learn from that history. Stability will follow not from tightening control but from strengthening law, planning, and building trust.

Business and Economic Commentary by Christopher Ram

Introduction

This is the second and concluding part of a two-part commentary on the underground economy. Part I, published on August 18, 2025, was prompted by the revelations of Azeem ‘Junior’ Baksh in an interview with online reporter Travis Chase – although Baksh has since distanced himself from some of the statements made. The continuation was delayed by intervening elections and a shift in national attention.

Part I explored the origins of Guyana’s underground economy – born of shortages and import substitution – but did not address the criminal economy, which operates alongside, and increasingly, within it. That sphere includes narcotrafficking, illegal mining, smuggling, and other activities that are not merely informal, but outright illegal. Unlike the earlier underground economy, driven by necessity, today’s criminal enterprises rely on laundering, political cover, and networks of protection, often intersecting with official complicity.

Overlap

Before proceeding, it is useful to distinguish the three overlapping spheres. The underground economy lies outside the tax and regulatory net – informal, unrecorded, or under-declared. The criminal economy includes activities that are illegal by definition. The corrupt economy operates within legal structures but subverts them – through bribery, procurement fraud, kickbacks, and abuse of state power for private gain. When they co-exist as they now do, they are more dangerous and detrimental.

The contrast with “underground economy one” is stark. Then, Guyana was one of the poorest countries in the hemisphere, behind only Haiti. It was a pariah state, burdened by unsustainable debt, currency shortages, crumbling infrastructure, and mass emigration. Today, the country boasts of the world’s fastest-growing economy and a per capita GDP that rivals developed countries – a transformation estimated at over a 100-fold increase.

As oil catapulted the formal economy past the trillion-dollar mark, the underground was overtaken by a corrupt economy thriving within formal systems but beyond accountability. That wealth thus obtained is now flaunted openly, its source unchallenged. Enforcement agencies – politicised at the top and underpaid below – either look the other way or target only the powerless. In this environment, connections and privilege, not legality, decide who are held to account.

The consequence is that the lines between the underground, the criminal and the corrupt have blurred into convergence. What follows are key segments of the economy where shadow activity now thrives in plain sight.

Gold: More than worth its weight

Gold remains the underground economy’s preferred medium of exchange. With its high value-to-weight ratio, liquidity, and resistance to tracing, it is ideal for discreet transactions. But the issue goes deeper. Guyana is widely believed to serve as a laundering route for gold smuggled from blacklisted jurisdictions like Venezuela and parts of Africa. This gold is exported under Guyana’s name, cloaking it in legitimacy while draining the country of credibility – and revenue.

Narcotics: A Persistent Foundation

The drug kingpins are no longer as conspicuous, but the narcotics trade has not disappeared. Ongoing busts, unexplained wealth, and suspicious transactions point to its continued presence. Guyana’s location keeps it central to transshipment routes between South American producers and North American and European markets. Proceeds still seep into the economy – undeclared, untraceable, and dangerous.

Procurement: The Golden Goose of Corruption

With massive increase in public spending, generous budgeting and poor audit and oversight, public procurement is now a rich source of high-level corruption. The model is familiar: inflated contracts, padded pricing, and poorly supervised improperly executed work with rewards through third parties. Kickbacks appear in various forms, including political payments serving the dual purpose of a reward, and deposits on future state contracts.

Gambling

Gambling, once a vice, is now development policy. A “lucky” night at the slots can explain sudden wealth – real or invented. Online betting in various forms, is almost untraceable. Horseracing, casinos, and digital platforms now serve as ideal channels for laundering illicit income under the guise of entertainment.

Retail and VAT Evasion

The old contraband model – suitcase traders and street forex – has been eclipsed by more complex systems. Large importers, often doubling as wholesalers and retailers, under-invoice imports, move currency off-market, and under-declare VAT. With undocumented foreign workers in retail, security, and construction, evasion extends beyond goods to wages, payroll taxes and social security deducted but not paid over.

Real Estate: The Underground’s Vault

Real estate is another favoured avenue of undisclosed value. Properties are acquired via proxies, relatives, or shell companies, with transactions under-declared or settled in cash. High-end developments often shadow public infrastructure budgets. The cycle is clear: illicit funds from procurement are laundered and locked into real assets – invisible to tax authorities, insulated from scrutiny.

Political Protection and Contributions

Corruption at this level thrives not just on evasion, but on immunity. Politically exposed persons (PEPs) offer cover, and political contributions often act as prepayment for regulatory leniency or future contracts. In return, appointees shield benefactors and frustrate enforcement. The line between campaign finance and criminal facilitation grows ever thinner.

Institutional Paralysis and Political Protection

The overlap among the segments means that there is an erosion of institutional will. Agencies meant to monitor, regulate, and prosecute financial crime are themselves weakened – by political interference and under-resourced. Unless the Police, SOCU, the Procurement Commission, the Integrity Commission and the Commission of Information, are insulated from political control and granted stronger investigative and prosecutorial authority, they will continue being more symbolic than substance.

Conclusion:

Though remnants of the original underground economy remain and should not be dismissed, they have been largely overtaken by a more insidious, corrupt economy – one cloaked in legality, yet beyond the line of legitimacy and legality. Its replacement shifts the tax burden to the honest, distorts markets in favour of the well-connected, and shuts out even the law-abiding. Together, they turn enforcement into a tool of the powerful, while corroding public trust in justice, fairness and the rule of law.

Oil money does not solve these problems. In fact, it exacerbates them. Another of the challenges that will define President Ali’s second term.