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Region 9 flood relief was distributed through PPP/C party office

‘Business Page’ in this past Sunday Stabroek noted how the government has undermined the regional administrations and the local democratic organs across the country. For more than ten years, it has failed to pass the necessary laws and to establish the Local Government Commission required by the Constitution of Guyana to allow for operational and financial autonomy of those bodies. In that column I reminded readers that Article 12 of the Constitution states that “Local government by freely elected representatives of the people is an integral part of the democratic organisation of the State.” Instead of democracy, the PPP/C has restored party paramountcy in its vilest form.

One day after the column appeared I learn through the online news medium Demerara Waves that during the PPP/C’s electioneering campaign in Region 9 this weekend, that party’s regional headquarters was the location from which hundreds of persons were paid $20,000 in cash. The ostensible purpose of the payment was “flood relief.”

It is entirely irrelevant whether the recipients were told that the money came from the public Treasury and not the PPP/C. Each of the ten administrative regions has its own office, staff and transportation facilities. It is wrong, and egregiously so, that public funds are disbursed from any party office. I would like to think – though with this dishonest government and its political arm the equally dishonest PPP/C, no one can be sure – that following the flood, a proper, auditable system was used to identify eligible persons for “flood relief.”

Yet, this government, which for years had robbed the Amerindians of their entitlements under the Amerindian Act 2006, heartlessly made the flood victims wait for five months until the PPP/C elections entourage rolled into town to make the “flood relief” payment at their party’s office. I would not be surprised if the payment was deceptively an inducement to the poor Amerindians to attend the PPP/C rally and had little to do with “flood relief.” It is after all, how the party has commoditised the Amerindians of this country, particularly since 1992. It is about paramountcy of the party which Guyanese had deluded themselves had died in 1992. In fact paramountcy has matured into a semi-criminal enterprise.

This is just the latest case of the government using the prorogation of the National Assembly as a cover to continue misusing, mismanaging and misappropriating public moneys in a crude and shameless vote-buying national exercise. Even as the non-government parties campaign to unseat the PPP/C, they should remain alert to and oppose all the abuses which are coming to light.

As a member of civil society and of the Committee for Human Rights and Free and Fair Elections, I hope that Gecom, the Electoral Assistance Bureau and all those who will pronounce on the November 28 national and regional elections are taking note of these malpractices. The stage is being set for massively unfair elections.

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Local government financing and democracy

Introduction
The reader should not wonder why in the caption of this column ‘democracy’ does not precede ‘financing.’ Obviously it should but the reader will also appreciate the procrustean attempt to fit what is at first blush a political and local governance issue into a business column. Still, it is clear that our Constitution in fact acknowledges the importance of financing to local government and specifically addresses financing in three Articles under Chapter 7 of the Constitution dealing with local democracy.

It is often said, and by no less a person than the President of the country, that Guyana has one of the best constitutions in the world. That is of course true if one is prepared to overlook the fatal flaws that permit an elected dictator who is more equal than the rest of the citizens, an emasculated Cabinet and National Assembly unable or unwilling to carry out their constitutional responsibilities and a political class that would cynically ignore those sections of the Constitution that they find inconvenient.

The constitution
– in theory
Notwithstanding these serious limitations, one area in which the Constitution is on paper very strong relates to local government. The problem is that our Parliament which comprises the National Assembly and the president has failed to carry out their constitutional duties. Article 12 states that “Local government by freely elected representatives of the people is an integral part of the democratic organisation of the State” which Article 71 (1) recognises as “a vital aspect of democracy” and requires that it “be organised so as to involve as many people as possible in the task of managing and developing the communities in which they live.”

The Constitution does not leave it there and imposes on Parliament the obligation “to provide for the institution of a country-wide system of local government through the establishment of organs of local democratic power as an integral part of the political organisation of the State.” Such local democratic organs are constitutionally autonomous and the decisions they make are binding upon the communities and citizens of their areas.

Helpfully the Constitution also provides that for the purposes of local government administration the country should be divided into regions, sub-regions and other subdivisions as Parliament deems fit. The relevant considerations in such a determination include population, the physical size, the geographical characteristics, the economic resources and the existing and planned infrastructure of each area, all with a view to ensuring that the area is or has the potential for becoming economically viable.

Article 74 (1) lays down as “the primary duty of local democratic organs” the efficient management and development of their areas and to provide leadership by example. Article 74 (3) imposes on local democratic organs the duty to maintain and protect public property, improve working and living conditions, promote the social and cultural life of the people, raise the level of civic consciousness, preserve law and order, consolidate the rule of law and safeguard the rights of citizens.”

The practice is different
Local government elections not having been held since 1994, this “integral part of the democratic organisation” has been in abeyance for nearly fifteen years, something that everyone seems to accept as the norm of this new democratic era.

The Constitution recognizes that the discharge of the obligations of the local government bodies requires financing; Article 76 empowers Parliament to permit the regional democratic councils to raise their own revenues and to use such resources for the benefit and welfare of their areas. The Constitution does not specify the bases on which these bodies may raise such funds but Article 77 A requires Parliament to make a law for the “the formulation and implementation of objective criteria for the purpose of the allocation of resources to, and the garnering of resources by local democratic organs,” being the regions, sub-regions and other sub-divisions into which Parliament divides Guyana.

There is some amount of confusion arising out of Article 77 (of the Constitution) which requires the development programme of each region to be integrated into the national development plans, and for the government to allocate funds to each region to enable it to implement its development programme. The Constitution framers might have thought that the meaning of the word ‘development’ is so self-evident that no definition is necessary, but I fail to understand how a “development programme” can mean the annual office cost in the operational budget of any region.

Parliamentary failure
What is disappointing – if not shocking – is that we have had two full-term parliaments since these changes were made to the Constitution but the parliamentarians have done nothing to give effect to those changes. Still, it does not seem particularly shocking that a National Assembly that could cynically pass laws to postpone local government elections on several occasions would have any difficulty in otherwise undermining the autonomy of local government bodies, including the means and necessity to raise money to enable those bodies to carry out their mandate. Consequently there is no effective local government and the paradox we are faced with is of a central government minister exercising operational control over regions and local democratic organs.

To realise how extreme the situation is one only has to look at the National Estimates to recognise that the country’s ten administrative regions are dependent entirely on the central government for their revenues, a situation that has few if any parallels around the world. By way of example, I refer to a review by me of the new constitution of Kenya published in the Stabroek News of November 30, 2010. Under that constitution, only the national government has the power to impose income taxes; value added taxes; excise taxes as well as customs and other duties on the import and export of goods.

No silver bullet
The governance problems in Guyana are so endemic that there is unlikely to be any silver bullet solution and while we heard first of devolution and later power-sharing, in my view the issue of local government financing has received far too little attention. This centralization of power and control of the national purse on the one hand and the restrictions on regional and local government bodies to garner their own resources are counterproductive to good governance and democracy as envisaged in Guyana’s Constitution.

The failure of the Ninth Parliament and more specifically the PPP/C and the PNCR to agree on the establishment of the Local Government Commission required under Article 78 A was a major hurdle to local government elections. There was little talk if any of the reform of local government financing. That is a pity.

And it is not as if there is any major hurdle in accessing good examples. We do not have to go as far as Kenya – just look at the Amerindian Act of 2006. Guyana has witnessed and suffered from the excesses of central controls. For all the powerful arguments for power-sharing, they will come to naught without improved local democracy and efficiencies.

Studies show that the revision of funding sources is a key part of the reform of local government and that “local government finance is the litmus test for central government’s commitment to local government.” That is not to say that there is such a thing as an optimal level for local government, and without exception, the size and structure of local government varies often in relation to the functions imposed on them. What we have in Guyana is a situation in which the functions of local government bodies are defined but the resources to carry out those functions are controlled by others.

Conclusion
Given the long absence of meaningful local government it might be useful to restate what are regarded as the main reasons underlying the system of local government, as a manifestation of local democracy and a provider of local services. Locally elected politicians make decisions on behalf of local communities and serve as a safeguard against central government domination, while the strengths of local government as a democratic instrument are its closeness to the population, its elected status, its accessibility and the opportunity it provides for public participation in the democratic process.

Even for those countries with an established tradition of local government there is the continuing effort to determine the right size to ensure local democracy and economic efficiency in the delivery of local public services. Various models have been developed to meet these two, often contradictory, demands but we need not worry too much about these. Here in Guyana, if we ignore for the moment the system of village councils we had up to the sixties, we really are starting from scratch and have numerous examples on which to draw.

The 2011 Manifesto of the PPP/C did not see local government financing as an issue which they thought needed addressing. Whether the other parties will share that perspective we will soon know.

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Half-yearly reports show increased turnover

Introduction
Caribbean Containers Inc, a public company in the paper recycling business has reported turnover for the first half of 2011 increasing by 9.3% over the same period last year. This follows a 10.3% reported turnover increase by the DDL Group of Companies and a 13.8% increase in the Banks DIH Group, the only one of the three with a September 30 year-end while CCI and DDL have a December 31 year end. The increases in turnover are of course considerably higher than the rates of inflation in the economy. Banks DIH in explaining its improved performance cited higher dollar sales, a term usually used in contradistinction from volume sales.

Caribbean Containers Inc.

CCI reported a gross profit increase over 2010 of 14.3% but its losses before tax increased from $21.8 million to $23.8 million. The report shows Earnings before depreciation as having declined in the first half of the year by 31.3% and that margins were severely affected by the rapid escalation in global fuel prices which resulted in the company’s fuel bill going up by some 40%.

The company’s performance in the third quarter ended September 30, 2011 improved strongly with an 18.3% growth in Earnings before depreciation compared with third quarter 2010. The result was a modest profit before tax of $2.7 million compared with a loss of $10.2 million for the third quarter of 2010. The overall result was a sharp decline in loss before tax for the nine months from $32 million in 2010 to $21million in 2011. The report explained that over the last four years, sales in the second half of the year averaged 13% more than in the first half.

CCI has had its fair share of financial problems over the years with a number of ownership changes and substantial debt restructuring. As at June 30, the company had liabilities of $365 million including trade and other payables of $116 million and loans repayable within a year amounting to $69 million. Cash resources amounted to $37 million but this had gone down to $25 million three months later.

In what can be described as Guyana’s principal LCDS private sector company, survival is still the challenge as the company’s aging technology has high running and maintenance cost, placing cash management at the centre of management focus.

Yet the company deserved commendation for being the only private sector company other than Republic Bank (Guyana) Limited to publish quarterly financial reports. The Bank of Guyana had published and recently withdrew Guideline # 10 requiring all banks to publish quarterly statements.

Banks DIH Limited

The half-yearly report is a consolidated report of the food and beverage giant and its subsidiary Citizens Bank Guyana Inc. Given the disparate nature of the operations and business of the two entities such a consolidated report does not allow any easy informed analysis of the two businesses.

The company had unaudited profit after tax in the half-year of $689.5 million compared to $594.1 million in 2010, an increase of $95.4 million or 16%. Chairman and Chief Executive of the group explained in the report that the improved results came mainly from increased dollar sales, efficiencies derived from Plant and Machinery upgrades and the benefits obtained from the installation of Capital Equipment.

The subsidiary Citizens Bank achieved an unaudited profit after taxation of $364.6 million compared to $261.0 million in 2010.

Total group profit after taxation for the half year was $1,025 million compared with $836 million, an increase of some 22% and a resulting increase in Earnings per Share from $0.71 per share to $0.85 per share.

A meaningful cash flow commentary is not possible as the cash and bank resources of the company cannot be distinguished from those of the banking subsidiary. Inventories, the bulk of which would be for the company stood at $4,367 million, increasing from $4,069 million one year earlier. For the type and nature of the operations this seems reasonable, particularly when compared with DDL to which we now turn attention.

Demerara Distillers Limited

This group comprises several local and overseas companies in the region, North America and Europe as well as a joint venture in India and associated companies in Guyana and Jamaica. In his Chairman’s Statement Dr. Yesu Persaud reported that the group’s pre-tax profit for the half-year of $769 million had increased by 6.4% over 2011, attributed to the performances of the European subsidiary, Demerara Shipping Company Limited and Distribution Services Limited.

When account is taken of increases in the fair value of investments and exchange differences on consolidation, the total comprehensive income for the year – a measure of the sum total of all operating and financial events that have changed the value of an owner’s interest in a business – is $627 million compared with $437 million in 2010. The group may have a challenge however in exceeding the full year reported profits for 2010 of $1,139 million. The profits for that year were augmented by a $151 million “share of profit of associated company.” In the first six months of 2011 this profit was only $8.4 million compared with $3.4 million in 2010 half-year, suggesting some major development in the second half of that year.

Earnings per share (EPS) have increased from $0.65 in half-year 2010 to $0.69 in 2011.

The balance sheet continues to be fair with current assets exceeding current liabilities by a ratio of nearly 2:1. The problem lies however in the composition of the two balance sheet components. Trade payables have climbed to $4 billion, bank overdraft is $2.8 billion and loans repayable in the next twelve months is close to half a billion dollars.

Share prices
None of the reports bother to speak of one of the most important issues for shareholders and that is the performance of the companies’ shares on the Stock Exchange. A comparison of recent prices is shown below:

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Parties’ nominations lists should satisfy eligibility criteria for election to the Guyana Parliament

I am today sending to the Chief Elections Officer of the Guyana Elections Commission (GECOM) the following letter in connection with the list of nominations which is to be presented to him for the November 28 national elections.

Mr. Gocool Boodhoo,
Chief Elections Officer,
Guyana Elections Commission
Main Street,
Georgetown

Dear Sir,

Eligibility criteria for election to the Guyana Parliament

I am writing to remind you of the following two Articles of the Constitution of the Co-operative Republic of Guyana relating to the eligibility for election to the National Assembly.

1. Article 53 – Qualifications for election as members states as follows:

‘Subject to Article 155 (which relates to allegiance, insanity, and other matters) a person shall be qualified for election as a member of the National Assembly if and shall not be so qualified unless he:

a) is a citizen of Guyana of the age of 18 or upwards; and
b) is able to speak, and unless incapacitated by blindness or other physical cause, to read the English language with a degree of proficiency sufficient to enable him to take an active part in the proceedings of the Assembly.’

2. Article 155 (1) of the Constitution states:

‘No person shall be qualified for election as a member of the National Assembly who is, by virtue of his own act, under any allegiance, obedience or adherence to a foreign power or state.’

I am assuming that the Leader of each Party’s List of candidates for the national elections as well as you in your capacity as Chief Elections Officer are not unaware of the clear import and intent of these provisions and in particular Article 155 (1). It is my view that there is a serious obligation on your part to verify that the eligibility requirements are satisfied. You should be aware too that while there might have been breaches in the past, this cannot justify a continuation of an unconstitutional violation in such an important matter.

Finally, Sir, I consider it your duty to ensure that the elections are held in accordance with all laws and so thus prevent any challenge arising from the election to the National Assembly of any person who does not satisfy these eligibility criteria.

Yours faithfully,
Christopher Ram

This is more than an academic matter. The constitutional provisions are intended to ensure that our legislators are loyal to Guyana and Guyana alone. A similar situation arose in Jamaica recently where politician Mr Daryl Vaz gave up his naturalized US citizenship in order to continue in Jamaican politics. That those who seek to make laws for the citizens of any country must be willing to submit themselves to those very laws at all times is almost superfluous to state.

The permissiveness that characterised previous parliaments has led us into the present state of non-governance and lawlessness. We must not allow the same mistakes again. The time to start holding our next batch of parliamentary representatives to account begins now.

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A mixture of distortions, untruths and misrepresentations

Under the theme ‘Working for a Better Tomorrow,’ the PPP/C Manifesto for the 2011 elections is a mix of distortions, untruths and misrepresentations, wishful thinking or no thinking at all. The two-page introduction, written by the presidential candidate Mr Donald Ramotar seems signally disconnected from the rest of the 43-page document.

Not content with the half-true contents of the Manifesto, Mr Jagdeo, the PPP/C’s presidential candidate for the past two elections showed that he still does not believe that truth is a virtue. His capacity for inventiveness, make-believe and contempt for the intelligence of his audience guaranteed that he authored the most astounding untruths of the Manifesto launch night when he told the audience that the PPP/C government had only just paid off a US$300 million loan for the PNC’s failed hydropower project!

Not only was it deception for the Manifesto to choose 1991 as its reference point when the PPP/C was in fact elected in the fourth quarter of 1992, but some of the selected information both then and now are fictitious and or fabricated. GPL line loss was not 50% in 1991 nor is it less than 30% now (page 13). GuySuCo does not produce 30 MW of bagasse power at Skeldon – a Wartsila diesel powered engine does – and the current external debt is not “approximately US$800 million” – unless for the economist Mr Ramotar and his economic team US$800 million and US$1,111 million are “approximately” the same!

The Manifesto boasts of the growth of the economy over the past nineteen years. It does not bother with the inconvenience that a substantial portion of the growth comes from the re-basing of the economy in 2009, an exercise which even a half-decent economist knows makes long-term comparisons meaningless. Of course it would have been too honest to expect the Manifesto to tell us that the exchange rate of the US Dollar has sunk 65% since 1992; or that the domestic debt has climbed from $18 billion in 1992 to $103 billion at June 30, 2011; or that the cost of electricity was $12 compared with $54 per KW currently; or that greenheart was $85 per board metre compared with $350 now.

Mr Jagdeo and now Mr Ramotar repeat ad nauseum that 96% of revenues were consumed in servicing debt “when they took over,” and it is now 4%. They should read the 1993 Budget Speech in which the first PPP/C Finance Minister Asgar Ally referred to “scheduled debt service obligation” and not actual debt servicing. And if they look at the 2010 revised figures, they will see that debt-servicing to revenue is not 4% but 13.3%.

What is also striking is that Mr Ramotar’s ‘vision’ for the next five years does not add a single new idea to the corruption-laden projects of Mr Jagdeo’s last term. So we have:

1. the expensive and untested Chinese laptops that will run us into billions;

2. the Amaila hydropower project which will earn us the award for the most expensive hydropower in the world, guaranteeing that electricity rates will remain prohibitively high;

3. the tourism hospital which Mr Jagdeo and his friend will import from India;

4. the Low Carbon Development Strategy that is neither low in carbon nor developmental in nature; and

5. the fibre-optic cable.

Mr Ramotar shows a dangerously limited understanding of democracy and the constitution when he promises local government elections within one year and “the strengthening of the local government ministry to oversee local government bodies.” The man seems blissfully unaware that that is the purview of the constitutionally required Local Government Com-mission which his party in government has refused to establish, and that Article 79 requiring Parliament to provide criteria for allocating resources to the regions has not been given effect to.

Despite our border problems with Chavez’s Venezuela and Bouterse’s Suriname, or the imperative to resile from Jagdeo’s excursions with Kuwait, Libya and Iran, Mr Ramotar does not think that foreign policy deserves a mention in 43 pages.

But he dreams that in five years he can transform an education system – known as much for a few exceptions like Ms Dev, as for its drop-outs and the creation of a functionally illiterate population – into one that is “world class and globally competitive.”

That race and race relations for the PPP are the imagination of a few aging malcontents is evident from the failure of the Manifesto to recognise those issues or to acknowledge the International Year for People of African Descent.

One wonders whether the leaders of the private sector in attendance, including Clinton Williams, Norman McLean, Ramesh Dookhoo and others, noticed that nowhere is the private sector or the manufacturing sector mentioned in the Manifesto. Good for them.

But labour too got no mention and one is left to wonder for how much longer the Jagdeo-Nadir $800 per day minimum wage will drive the pay policy of the PPP/C. No mention of the depressed communities or efforts to stamp out corruption or to integrate the corrupt elements in the informal economy into the tax-paying formal economy.

Governance too is treated by omission. And for a man who was nurtured in the ideologically obsessed Marxist PPP, Mr Ramotar’s Manifesto does not even mention the model of economic philosophy which his administration will pursue.

Whoever wrote the section of the Manifesto on Information and Communication Technology (page 22) must have been smoking something. How in Edghill’s heaven’s name can Guyana produce 25,000 high-quality jobs over the next five years in computer engineering and software development? Perhaps we will import them from India or China as we will do for our tourism hospital.

Women who make up 51% of the population, children, the elderly and the family get one page in the Manifesto at page 36, that includes a commitment to a comprehensive review of the NIS. The PPP/C’s mismanagement of the NIS under the chairmanship of Dr Roger Luncheon for the past nineteen years has placed the NIS at grave risk with outflows far exceeding inflows – three years earlier than the 2006 Seventh Actuarial Study had feared.

And youth who make up 46% of the voters share one page with sports and culture, although culture is noticeably missing in the plans for the next five years.

One can draw analogies from Alice in Wonderland or Aesop’s Fables, but perhaps the most appropriate assessment of the PPP/C manifesto was offered by their own former minister, Dr Henry Jeffrey, who told the nation on ‘Plain Talk’ last Sunday that he could not vote for the PPP/C on the basis of this Manifesto.