Category: Business and Economic Commentary

Business and Economic Commentary by Christopher Ram

Long admired as a model non-aligned small country, Guyana now finds that image replaced by a photograph from the recent Trump-sponsored “Shield of the Americas” summit in Florida. President Irfaan Ali appeared prominently among the leaders assembled by the United States and spoke of the need for change in Cuba so that democracy and improved conditions could be achieved for the Cuban people.

What was notable about those remarks was what they did not contain. There was not a word about the economic embargo that the United States has imposed on Cuba for more than sixty years – an embargo that CARICOM governments have consistently condemned as unjust and harmful to the Cuban people. Nor anything about the rendition of the leader of a Caribbean country or the killing of citizens of the region.

The comments also appeared to signal something else: that countries in the region are expected to reconsider, nay discontinue, their relationships with traditional partners. For the Caribbean, those partners include countries that have supported the region for decades.

Cuba is one of those partners. For decades Cuban doctors, teachers and technicians have worked across the Caribbean. Thousands of Caribbean students – including hundreds of Guyanese – have received professional education in Cuban universities in medicine, engineering and agricultural science.

Grenada offers a vivid example of the complexities that sometimes accompany relations between small states and larger powers. During the People’s Revolutionary Government, Cuban workers helped build the island’s first, and still only, international airport. When that government collapsed in October 1983, the United States invaded Grenada, an intervention carried out at the “request” of Governor-General Paul Scoon and supported by Prime Ministers Tom Adams of Barbados, Eugenia Charles of Dominica and Edward Seaga of Jamaica. More than four decades later Grenada remains closely aligned with Washington’s position on Cuba, even as it continues to rely on China for infrastructure and on Cuba for training of its budding professionals.

For Guyana, China represents a different but equally significant relationship. For more than two decades Chinese financing and technical cooperation have contributed to major infrastructure projects including the expansion of the Cheddi Jagan International Airport, the Marriott hotel, the new Demerara River Bridge, major roadworks and river ferries, projects that were otherwise beyond our country’s reach.

Those accepting Trump’s invitation are now expected to review their relationships with such partners. This reflects a familiar expectation: that America’s competitors – and enemies – must also become our competitors – and enemies. Yet what does the United States offer in return? It has cut programmes once provided to poor countries across the world, including the Caribbean, through USAID and the Peace Corps, while its current leadership speaks casually of wars and engages in the assassination or rendition of foreign leaders, all in violation of international law.

There is nothing inherently objectionable about foreign investment. Guyana has long depended on external capital and expertise to develop its natural resources. The question arising from Ali’s Florida visit is whether Guyana is being asked to distance itself from certain old friends while deepening its dependence on new ones.

Such questions are not merely theoretical. Guyana’s rapidly expanding petroleum industry has elevated its strategic importance within the hemisphere, and countries that suddenly discover valuable natural resources tend to attract considerable attention from larger powers.

At the same time, the President’s remarks in Miami about democracy in Cuba invite reflection on democracy at home. The Sunday Stabroek News editorial of March 8 observed that “there is something about remaining in power too long which disconnects incumbents from reality and causes them to incline towards autocratic modes of governance.” It also reminded readers that democracy “means more than free and fair elections” and depends on functioning institutions and respect for the rule of law.

Those observations resonate with developments in Guyana’s own political environment. Delays in convening Parliament following the September 1 elections, the failure to establish parliamentary committees in a timely manner, the unresolved leadership of Region Ten and the continuing absence of substantive appointments to the offices of Chancellor of the Judiciary and Chief Justice all raise legitimate questions about the functioning of democratic institutions.

Equally troubling are the Ali administration’s attempts to dominate democratic space and exert influence over institutions intended to operate independently. Its selective regard for the rule of law – access to information being an egregious example – and its appointment of individuals and institutions to frustrate democratic processes raise further concerns in areas such as environmental regulation, procurement oversight, state audit and transparency initiatives including the Extractive Industries Transparency Initiative.

Guyana must inevitably engage with powerful partners. The United States remains an important trading partner and a significant source of investment, and constructive engagement with Washington is both natural and desirable.

In his final term, President Ali – a relative newcomer to international diplomacy – appears eager to build a profile on the global stage. As former President Jagdeo did quite successfully, there is nothing unusual about such ambition. But repositioning Guyana within the geopolitical landscape of the hemisphere would represent one of the most consequential foreign-policy pivots since independence, and it should therefore be approached with caution. Jagdeo did not go that far.

As Henry Kissinger once observed, “To be an enemy of America can be dangerous, but to be a friend can be fatal.” In cultivating new friendships, President Ali would do well not to forget the value of those old friendships – or the importance of preserving Guyana’s independence and sovereignty in the process.

Business and Economic Commentary by Christopher Ram

This column supports President Irfaan Ali’s call in St. Kitts for the removal of artificial barriers to trade within CARICOM. The principle, enshrined in Treaty and incorporated into domestic law, is sound. The Caribbean Single Market and Economy to which Guyana is a signatory frowns on any attempt by a Member State to erect fiscal or administrative walls protecting domestic operations against other members’ goods and services.

The principle applies to every Member State – domestic and regional alike. The Caribbean Court of Justice settled this question in 2014 in Rudisa Beverages & Juices N.V. v The State of Guyana, a case brought by a Surinamese company challenging an environmental tax amendment under the Guyana Customs Act.

The Court may have acknowledged the stated objective of the legislation, but it held that motive and form are irrelevant; effect is what matters. If the effect of an internal fiscal measure alters competitive conditions in favour of locally produced goods as against like goods of Community origin, it is inconsistent with the Revised Treaty of Chaguaramas.

Against that legal background, the recent tax amendment introduced by Dr. Ashni Singh in his 2026 Budget, zero-rating locally produced furniture and jewellery, fails at the first hurdle. By the Bill’s plain language, the benefit is confined to Guyanese production. Furniture and jewellery manufactured in other CARICOM states do not enjoy the same treatment. That is differential taxation based solely on origin. Anyone familiar with the Treaty and Rudisa would immediately recognise the difficulty.

In functional terms, it is precisely the type of discriminatory fiscal measure the CCJ warned against. The inconsistency will not go unnoticed within the Community. Guyana has already been required to compensate Rudisa in substantial sums. It would be unfortunate to invite a repetition. The measure should be reconsidered before it produces another avoidable and embarrassing defeat.

But there is a broader issue. Guyana produces gold in abundance. No other CARICOM country does. It has commercially harvested timber. No other CARICOM country comes close. To attempt to protect such businesses defies economic logic and raises the question of the kind of private sector we are trying to build. Protection is not integration. If our manufacturers require origin-based tax advantages to survive within the Single Market, then we are not preparing them to compete regionally: we are mollycoddling them, protecting them from their own inefficiencies.

The asymmetry in regional enterprise is instructive. Republic Bank Limited, a Trinidad and Tobago enterprise, operates profitably in Guyana. Yet not one of our indigenous banks –  Citizens Bank, Demerara Bank or GBTI – operates in that country. They appear comfortable in a Guyana market that functions more like a sheltered environment than a competitive one. The pattern repeats across sectors: capital, brands, and services move outward into Guyana far more readily than Guyanese enterprises expand outward into the region.

The pattern repeats elsewhere. Banks DIH Limited gave Barbados the “Banks” beer, which that country has made into a national brand. Yet in Guyana its strategic focus appears to be motor vehicle sales and internal corporate restructuring rather than regional expansion. In that context, it is not without irony that when legal assistance was required, the company retained a Trinidad-based law firm. There is nothing improper in that choice. But it illustrates a broader reality: regional integration appears to flow more readily into Guyana than outward from it.

If President Ali wishes to be taken seriously when he calls on others to dismantle barriers, his actions must be consistent and must avoid enacting measures that privilege domestic production in ways that offend Treaty principles. One would have expected the tabling Minister, Dr. Ashni Singh, to be particularly alert to Guyana’s binding obligations under the Treaty and the emphatic direction already given by the CCJ.

If President Ali genuinely believes in the Single Market, then he should be speaking frankly to Guyanese businesses, charging them to go out and exploit the opportunities offered by the CSME, diversifying their markets and earning foreign currency. Not sheltering them from regional competition, but equipping them to compete successfully within it.

Business and Economic Commentary by Christopher Ram

For nearly three decades, save for the five-year interval between 2015 and 2020, the PPP/C has exercised political stewardship over the State-owned GuySuCo. The present Minister of Agriculture has held that portfolio since 2020. The condition of the sugar industry today is therefore not the product of temporary misfortune or inherited instability. It is the cumulative result of sustained political management. The current CEO is a member of the central committee of the party. The immediate past Chairman is now a minister in the 2025 PPP/C government. It is interesting to briefly review its record.

When the PPP/C assumed office in 1992, sugar production stood at 243,010 tonnes. By 2004, under a management contract, output exceeded 320,000 tonnes. That contract ended. Production fell. By 2015, output had declined to 212,000 tonnes. When the administration returned in 2020, production stood at 88,868 tonnes. In the years since, output has fluctuated between approximately 47,000 and 60,000 tonnes, with 47,000 tonnes repeating itself.

The financial record mirrors the operational decline. Between 2004 and 2019, GuySuCo received approximately $95.3 billion in capital allocations. From 2020 to 2025, a further $41.9 billion was committed. Cumulative exposure now stands at roughly $137.3 billion. This is not project support. It is spent capital, even as output contracted.

The explanation cannot lie solely in labour migration, adverse weather, or global sugar prices. Those are industry realities. What distinguishes GuySuCo is the repeated cycle of political misjudgment, and capital initiatives followed by interruption, reversal, or abandonment.

A Packaging Plant costing millions of US Dollars was established at Enmore at significant cost, later dismantled and stored for years. Mechanisation conversion on the Lower East Coast Demerara, costing tens of billions of dollars reportedly progressed substantially before being discontinued. Capital works were undertaken but did not mature into sustained productivity. Comparable initiatives are now proposed elsewhere. A new make of heavy-duty equipment was bought on the wing of hope only to end up in the scrap heap.

In a capital-intensive agricultural enterprise, continuity is indispensable. Capital without continuity does not become productivity. It becomes depreciation.

When major strategic initiatives do not survive their own implementation cycle, the difficulty lies not in rainfall or labour supply, but in policy- formulation, decision-making and execution. Successive chief executives have been introduced with confidence – as turnaround specialists, as industry experts, as reformers. Yet across leadership cycles, the trajectory has remained downward. Titles have changed. Output has changed – but in the wrong direction.

The Minister now projects 100,000 tonnes in 2026 and profitability by 2030. At the same time, the Corporation acknowledges yield per hectare below target, limited factory grinding hours, inefficiencies in cane transport, and recovery rates requiring improvement. To move from under 60,000 tonnes to 100,000 tonnes within two years requires simultaneous correction of every major structural weakness. The history of GuySuCo does not inspire confidence in such radical transformation.

The arithmetic is unforgiving. Of the proposed $8.4 billion operational subsidy for 2026, approximately $6.8 billion is allocated to wages. With a wage bill reportedly near $20 billion, GuySuCo must generate roughly $13 billion in sales merely to complete payroll. That excludes capital replacement, factory rehabilitation, debt servicing, and statutory arrears, including significant arrears obligations to the National Insurance Scheme and other public bodies.

Even if the 100,000-tonne target were achieved, the revenue required per tonne simply to bridge wages would leave limited margin for genuine profitability.

If annual injections in the range of $10 – 15 billion continue through 2029, an additional $40 – $60 billion will be committed before the promised year of profitability arrives. Even assuming sustained net profit thereafter, recovery of those injections would take decades, disregarding the $137.3 billion already expended and ignoring the time value of money. There is no indication that the PPP/C cares that this is neither a financial nor an economic proposition.

While GuySuCo could soon cross the line of no return, the issue is only partly operational. The deeper issue is governance. When policy direction, operational management, and oversight operate within the same political structure, independent commercial scrutiny weakens. In any private enterprise, three decades of declining output accompanied by over $137 billion in capital allocations would trigger restructuring, external review, and clear accountability. Only political considerations sustain current and indefinite architecture. 

Sugar is part of Guyana’s history and rural economy. It deserves serious policy, not perpetual experimentation. Support may be justified. Waste is not. Absent radical reform of governance – separating political control from commercial management, imposing independent oversight, and publishing transparent, costed transformation plans, projections of profitability by 2030 are not forecasts. They are wagers.

And the taxpayer is the one paying for this bet of folly.

Business & Economic Commentary by Christopher Ram

During the Committee of Supply stage of the 2026 Budget, Bishop Juan Edghill, Minister of Public Works, announced that Government is finalising negotiations to purchase the Berbice River Bridge and suggested that the acquisition will cost less than the projected toll subsidies between now and next year. That comparison may sound fiscally attractive. It is not the comparison that determines legality or prudence.

The more perplexing question is this: why is the State proposing to buy an asset that it is already scheduled to own? The concession granted to Berbice Bridge Company Inc. under the Berbice River Bridge Act expires in June 2027. It does not create a permanent private ownership that ends only with a buyout. Section 7(1)(a) provides that upon expiry of the Concession period, all of the Concessionaire’s right, title and interest in and to the Bridge revert to the Minister. The statutory architecture is clear – concession for a defined term, followed by mandatory reversion.

The Minister responsible for Public Works is the authority named in the Act to enter into and regulate the Concession. The legal position is therefore fixed by statute and administered by the very office now asserting a negotiated acquisition. Frankly, there is no apparent justification or benefit.

There are certain basic propositions which, I trust, are not in dispute. The Concession Agreement remains in force. It has not been terminated or abrogated. While the Coalition subsidised certain tolls, the PPP/C removed tolls in August 2025, compensating the Bridge Company with full payment for vehicles crossing the Bridge. The only change was the source of payment: motorists ceased paying tolls; taxpayers replaced that revenue stream.

Under the concession arrangement, the company is not entitled to keep every dollar generated by traffic. Toll revenue must first meet operating and maintenance costs and service the project debt. Only the agreed return constitutes its entitlement. In addition, the Concession requires the Bridge to be handed back in good condition at expiry. The obligation to maintain the asset until 2027 rests with the Concessionaire. It is not a deferred cost to the State.

Between now and 2027, therefore, the company’s entitlement is limited to its operating costs, debt servicing and its contractually defined return, net of its continuing maintenance obligations. When the Concession ends, no private right survives beyond that date.

The first analytical question is unavoidable: has the subsidy exceeded that net surplus? If it has not, taxpayers have merely replaced motorists as the payer. If it has, then public funds are enlarging the company’s economic position beyond what the Concession permits before expiry.

The second question concerns the proposed acquisition. The State will receive the Bridge in 2027. The only economic value to the Company remaining in 2026 is the limited net entitlement between now and expiry. Any purchase price must therefore correspond to that residual value. Payment beyond it is not payment for a continuing right; it is compensation for rights that terminate by law.

It is difficult to reconcile the Minister’s public explanation with this statutory framework. The explanation offered is inconsistent with both the Act and the Concession Agreement. If the Minister’s position is otherwise, he must now state it by reference to those documents.

Further concerns arise because oversight from the Ministry of Finance and the Audit Office has been conspicuously muted in relation to this project, despite the magnitude of the public funds involved. The subsidy has been significant. The proposed acquisition will also be significant. Yet there has been no public reconciliation of those payments against the Concessionaire’s remaining lawful entitlement before reversion.

Adding to public concerns is the company’s apparent discomfort with scrutiny. Over the years, efforts to examine its corporate filings were met with resistance and, at times, prohibitive charges, including a demand in the region of $50,000 for access to a single page of a corporate document. Engagements at the Registry of Companies did not always reflect the transparency contemplated under company law. These matters form part of the governance history against which the present proposal must be assessed.

Corporate governance is not cosmetic. When private interest and public resources meet, when public infrastructure is financed under a private concession, governance is not a choice: it is a precondition. The Concessionaire includes significant private shareholders. Given the well-known proximity between senior political actors and a principal financier of the Bridge, the absence of transparent arithmetic only heightens the need for full disclosure, and triggers suspicion. In such circumstances, precision is not optional; it is essential.

The Minister in this matter is not merely a political negotiator. He is the statutory custodian of the Concession. His authority derives from the Act. His powers are bound by it. His duty is fiduciary and it runs to the people of Guyana – not to political relationships, not to commercial familiarity and not to past allegiance.

Section 38 of the Agreement requires that certain steps should already have begun. It binds the Minister, the Government and importantly, the company. Any attempt to circumvent those will be unlawful, an abuse of public office and a breach of the minister’s duty.

He needs to change direction and do the right thing. Legally, he has no choice.

Mr. Deodat Sharma, Auditor General, is reported to have applied for a two-year extension of his tenure. It will be recalled that Mr. Sharma was confirmed many years ago in circumstances best described as accidental, following the absence of an AFC member from the Public Accounts Committee on the day of confirmation. It should also be recalled that the office of Auditor General carries the same constitutional status and security of tenure as the Chancellor of the Judiciary and the Chief Justice.

Approval and any extensions rest with the Executive President.  At the same time, President Irfaan Ali has retained the portfolio of Finance and is therefore constitutionally the Minister of Finance, with Dr. Ashni Singh serving as Senior Minister with responsibility for finance within the Office of the President. It is difficult to find a word that adequately captures this anomaly without offending editorial modesty.

The appointment of the Auditor General is made formally on the advice of the Public Service Commission. That safeguard is illusory. The Commission itself is appointed by, and remains effectively controlled by, the President and is chaired by a close associate of the governing party. This executive-centred circularity, embedded in the 1980 Constitution, is not treated by the ruling party as a flaw but exploited as a feature.

Such a framework is structurally incapable of producing independence. What-ever autonomy exists must come entirely from the personal courage, professional standing and institutional assertiveness of the individual appointed. When those qualities are absent – or discouraged – the office becomes an extension of executive convenience rather than a check upon it. It is in that context that the present request for an extension must be understood: not as a question of continuity, but as a measure of how thoroughly independence has been eroded.

Mr. Sharma is not a professionally qualified accountant and does not meet the statutory requirements ordinarily associated with the office. More troubling than qualification, however, is performance. During a period marked by explosive growth in public expenditure running into tens of billions of dollars, the proliferation of discretionary funds and persistently weak financial systems, the Auditor General has shown zero appetite to challenge, interrogate or even issue timely and meaningful warnings.

A review of the 2020 – 2025 Estimates under the Ali Administration shows an annual expansion of discretionary payments. In addition to the 40-hour part-time employment programme, cost-of-living buffers, community policing stipends and contract employment arrangements, Budget 2026 introduces yet another discretionary initiative, the house repairs programme.

Each of these programmes demands extensive systems audits, rigorous beneficiary verification, reconciliation testing and post-payment forensic review. None has received that level of scrutiny. Taken together, they signal a decisive shift away from rules-based public finance contemplated by the Fiscal Management and Accountability Act toward political control of public funds, with the Auditor General content to observe rather than object.

At the same time, Dr. Singh, as de facto Minister of Finance, has failed to modernise or implement systems capable of tracking, controlling and reporting such spending. This is precisely the environment in which an Auditor General should be demanding additional resources, specialist staff and forensic capacity. Instead, the response has been institutional quiet. Reports are produced on schedule, photographs are taken and deadlines are met – but audit quality, thematic analysis and systemic challenge are absent.

The handling of the Auditor General’s Report for 2024 illustrates the point. It was presented around 30 September 2025 with ceremony. Less than two months later, an “updated” report was delivered on a flash drive, without errata, reconciliation or explanation. This is unprofessional and grave. At best, it signals form over substance; at worst, it raises questions too serious to ignore.

More serious still is what has not been done. Despite clear statutory requirements, the Auditor General has failed year after year to conduct and present annual audits of tax concessions granted under the Income Tax (In Aid of Industry) Act. Billions of dollars in foregone revenue remain effectively unaudited. This is not a marginal omission; it goes to the heart of fiscal accountability and ministerial responsibility.

Parliamentary oversight has fared no better. The Government has made a mockery of the work of the Public Accounts Committee by cynically adjusting quorum requirements and repeatedly failing to attend scheduled meetings. Meetings were cancelled not occasionally but serially – some three, four, even five times in succession, including the 54th Meeting in 2023 and the 68th Meeting in 2024. The result is unprecedented: none of the audit years from 2020 to 2024 has been examined. The Committee’s last Chairman left office publicly regretting that the PAC was unable to discharge its constitutional function for a single year of the Ali Administration. An Auditor General serious about accountability would have raised alarm. Mr. Sharma did not.

What makes the present situation especially corrosive is that fiscal power and audit influence now sit within the same household. The de facto Minister of Finance presides over unprecedented discretionary spending, while his spouse exercises effective authority within the Audit Office as the de facto Auditor General. That arrangement is incompatible with any serious conception of independence. It would be unacceptable if formalised; it is scarcely less objectionable because it is informal.

The Constitution does not contemplate that the power to spend and the power to audit would be consolidated so intimately, nor that the country would be asked to pretend that this is normal.

It now appears that Mr. Sharma’s request for an extension will be granted by default, not on merit, because of a total absence of succession planning. The alternative would be the formal appointment of the current de facto Auditor General, who is also the spouse of the de facto Minister of Finance.

That situation is only marginally better than formal appointment. Whether the conflict is acknowledged or merely tolerated makes little difference in substance. In either case, audit authority would be exercised by a person whose proximity to the centre of fiscal power fatally compromises independence. The distinction between de facto and de jure becomes one of optics rather than principle.

This is not a justification for extension. It is an admission of deliberate, inexcusable and unacceptable governance failure. Succession planning in a constitutional office is not optional; it is a duty. Its neglect has produced a false and manufactured choice: retain an Auditor General who has failed to assert the office in the public interest, or formalise an arrangement that would extinguish even the appearance of audit independence.

Neither option is acceptable.