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Elections year mid-year report

Introduction
Today I conclude the review of the mid-year report for 2011, a statutorily required report under the Fiscal Management and Accountability Act 2003. In doing so I also draw attention and comparisons with the half-year report of the Bank of Guyana which while using the same data seems less inclined than the Minister of Finance to put a political spin on the numbers. Readers may find it of some interest that in this election year and with so much at stake, it is the first year since the Act was brought into force in 2004 that the mid-year report has been presented within the two-month deadline, hence the title of this column. Guyanese who have become quite cynical may not have been too surprised, given that the same treatment was accorded the Guyana Prize for Literature which was held this year after last being held around the time of the 2006 elections.

No wonder then there are many Guyanese who half seriously wish for annual national and regional elections simply for their practical benefits: the fixing of roads, clearing of garbage, completion and dispatch of pensions books to the living and the dead and the prompt announcement of a 5% Christmas gift to public servants under the unilateral collective labour agreement which the government has adopted for its employees. It would also mean that the Minister of Finance would not have to be misleading about the date of release of the mid-year report or the Bank of Guyana hold its hand on the truth.

I now turn to some of the other important indicators.

Balance of payments
The higher production of the major commodities referred to last week and coinciding with higher world market prices resulted in an expansion in export earnings in the first half of 2011 by 34.6 per cent to US$533.1 million.  Earnings from sugar increased by 32.4 per cent to US$50.1 million, reflecting a 30.4 per cent increase in quantity shipped to 99,738 tonnes, while rice export earnings expanded by 35.1 per cent to US$92.6 million, mainly attributed to a 26.4 per cent increase in average export price to US$551.4 per tonne, coupled with a 6.8 per cent increase in export volume to 167,945 tonnes. Gold continued to benefit from prevailing conditions in the global marketplace, and the average export prices witnessed a 29.1 per cent increase to US$1,370.3 per ounce, contributing to a 56.4 per cent increase in export earnings to US$229.5 million in the first half of the year. In addition, the bauxite industry earned US$65.2 million, 15 per cent more than in the corresponding period in the previous year due to higher production levels at both bauxite operations, with export volume increasing to 864,570 tonnes compared to 620,776 tonnes.

These significant increases more than off-set the 25.7 per cent decline in the value of timber exports due to a decline in export volume as plywood operations ceased, coupled with a fall in other timber exports.

On the other side of the account, the value of the country’s merchandise imports expanded by 25.7 per cent to US$859.5 million. The main factors contributing to this were: a) a 51.9 per cent increase in the value of fuel and lubricants imported; and b) an increase of 15.8 per cent in other imports with capital and consumption goods increasing by 48.8 10 per cent and 9.7 per cent, respectively, while imported non-fuel intermediate goods contracted by 2.2 per cent.

The overall deficit in the balance of payments at the end of the first half of 2011 was described by the Minister of Finance as a “modest” US$19.6 million but sufficient to warrant a revision of the originally projected surplus for the full year from US$24.4 million to an overall deficit of US$36.1 million by the end of the year.

Net payment for services amounted to US$74.4 million from US$36.6 million for the corresponding period in 2010. The outturn was due to a 43.1 per cent or US$19.4 million increase in payments for non-factor services. This reflected higher payments for freight and travel, which increased by 27 per cent and 252 per cent, respectively.

On the financing side, the Bank of Guyana reported that net current transfers increased by 20.0 per cent to US$216.0 million. This improvement was due to higher inflows to the private sector in the form of other current transfers which increased by 204 per cent or US$68.6 million to US$102.3 million. The Bank reported receipts from bank accounts increasing by 299 per cent or US$72.7 million to US$97.1 million and that the main sources of outflows were workers’ remittances and remittances to bank accounts, which amounted to US$94.0 million and US$53.6 million, respectively.

The Minister of Finance reported an increase in foreign direct investment of 9.2%, concentrated mainly in the energy, telecommunications and mining sectors. However the Bank of Guyana records the nuanced position that short-term private capital recorded a higher net outflow of US$21 million from US$4.5 million for the corresponding period in June 2010. This outflow reflected a rise in foreign assets being accumulated by commercial banks during the reporting period.

Monetary developments
The banking sector saw deposits by private and public individuals and entities and non-bank financial institutions increasing during the review period by 7 per cent to $253.2 billion. Private sector deposits which accounted for 77.9 per cent of total resident deposits increased by 8 per cent compared to the 4.6 per cent expansion in the corresponding period in 2010, attributed to an 8.5 per cent increase in business deposits to $35.5 billion and a 7.9 per cent increase in individual customer deposits to $161.8 billion.

Private sector credit at end June 2011 amounted to $119.8 billion. The main sectors of increased lending were agriculture (20.3%), real estate mortgages (10.3%), distribution (9.4 %), other services (7%) and mining and quarry sector (4.7%). The public sector remained a net depositor of funds with the banking system at end June 2011.

Foreign exchange market transactions grew by 19.2 per cent to reach US$2,861.7 million. Transactions at the cambios and the Bank of Guyana grew by 23.5 per cent and 27.5 per cent, respectively. The Guyana dollar vis-à-vis the United States dollar retained its path of stability, depreciating marginally by 0.25 per cent.

Shocking employment numbers
A few days ago the Minister of Labour shocked the nation with the announcement that the country’s unemployment rate had fallen to 10.9% (he made sure it was not 11%) but nowhere did he say where he pulled those figures from, or what the last official rate was. Interestingly, there is no mention of such numbers in the reports by the Minister of Finance and the Bank of Guyana. Indeed the Bank of Guyana reported a downturn in employment within the central government of 1.67 per cent. Without stating its source the Bank of Guyana did however report that preliminary estimates indicated improvement in private sector employment especially in the growth sectors. The wholesale and retail, construction and other services sectors showed increased employment.

A few days later Barbados announced an unemployment rate of 12.4% which must have made the Minister blush that Guyana could be doing so well! And with all of this the registered number of employed and self-employed persons under the National Insurance Scheme stubbornly refuses to increase.

Inflation and falling medical cost
The Bank of Guyana reported that the year-to-date change in the Urban Consumer Price Index (CPI) for June 2011 is registered at 2.97 per cent. The Bank sought to explain this level of inflation as due to price increases in the food category and unstable fuel prices “occurring from conflicts in the Middle East.” It reported price increases in transport & communication, housing, footwear & repairs and miscellaneous goods & services, which rose by 10.1 per cent, 1.1 per cent, 1.9 per cent and 1.5 per cent, respectively. In addition, education and furniture recorded a small price rise of 0.9 per cent and 0.6 per cent, respectively. Amazingly, it reported that the price index for medical & personal care and clothing categories decreased by 14.5 per cent and 0.3 per cent, respectively during the review period.

Apart from the fact that the reports seem to find it convenient at times to speak of year-on-year indicators and at other times – as in the case of the rate of inflation – of year-to-date rates, the average member of the public would have to ask which planet the Bank of Guyana could be referring to that had a 14.5% decrease in the price index for medical and personal care.

Debt
There was a 7% increase in the country’s total external public debt, from US$1,042.7 million at the end of December 2010 to US$1,110.9 million. These arose from new disbursements of US$69.3 million from the IDB and Venezuela. External debt service payments totalled US$18.4 million compared to US$12.3 million for the same period in 2010, a 50% increase.

On the other hand, the Bank of Guyana shows the movement of the debt year on year, which reports that the stock of domestic and external public debt increased by 9.1 per cent and 15 per cent, respectively from end-June 2010 level. The level of domestic debt at June 30 2011 was $103,390 million making the country’s total debt well over $1.6 billion. The Minister of Finance clearly felt that he should disguise these numbers.

Fiscal position
The non-financial public sector registered a deficit of $149.6 million during the first half of 2011 with central government revenue for the first half of 2011 amounting to $61.5 billion, 12.8 per cent higher than in the corresponding period for 2010. Tax revenue collections for the period amounted to $57 billion, 11.4 per cent above 2010 collections. As a result of these developments, projected current revenue for 2011 has been revised upwards to $119.7 billion from $112 billion.

But the troubling side is with expenditure. In the first half of 2011, non-interest current expenditure amounted to $38.3 billion, an increase of 16.2 per cent. Already the Minister has been going to the National Assembly for supplementary funds to meet expenses for what could effectively be deemed vote-buying. On the capital side the Guyana Power and Light Inc continues along with GuySuCo to be major financial burdens with hardly any light visible at the end of the tunnel.

Conclusion
For all we know about the illegal and criminal economies and the attendant tax evasion and money-laundering, these matters receive no mention in either reports. Key indicators seem way out of line with reality, particularly with respect to certain components of the consumer price index and those relating to employment which admittedly came from Mr Nadir and not the Bank of Guyana or the Minister of Finance. But it is on the financing side that this will not be a good year. With continuing uncertainty about the receivability of the Norwegian funds the rest of the year will see increasing expenditure financed by a growing debt burden.

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Election year politics?

Crazy columnist
This columnist has not gone mad, at least not yet. I am just mesmerized that Dr Ashni Singh who Manzoor Nadir of the PPP/C/TUF rates as one thousand times better than Peter D’Aguiar as Finance Minister, has finally met the statutory deadline for the annual mid-year report. (For the younger among us Peter D’Aguiar, the first and only [T]UF member trusted with the portfolio of the finance ministry was used and discarded by Burnham.) Singh’s achievement about the report vindicates the surprise I openly expressed last year to the now forgotten call by the Economics Affairs Committee of the National Assembly for an extension of the deadline for the report. Au contraire, Dr Singh proves that he could comfortably live with a shorter period!

More than being timely, the 2011 mid-year report, according to the President, who has traversed the globe in a shorter time than Jules Verne could have imagined, is among the best performing economies in the world with an annualized growth rate of 5.9% and an unemployment rate within striking range of the USA, according to Manzoor Nadir.

The remarkable growth comes, not from the powerful narco-sector of the economy as the doomsayers would have us believe, but mainly from the politically sensitive sugar and rice sectors which prove that even agriculture responds to election year politics. Indeed it shows what any MBA 101 course – citing the Ministry of Agriculture as a case study – would tell us: politics triumphs over incompetence.

Sugar and rice and all things nice
According to the Minister, in the first half of 2011, the Guyanese economy achieved real economic growth of 5.9 per cent with the non-sugar sectors growing by 5 per cent. It was sugar and rice however that were the star performers. Suggesting that after billions of dollars we can get back to the performance levels of 2004, sugar production in the 2011 first crop was 106,871 tonnes, a 30.5 per cent increase over the first crop of 2010, with a little help from an extension of the crop period. While this may affect the quantity of cane available for the second crop, the government seems optimistic that the full year 2011 target of 298,879 tonnes is achievable, perhaps with a procrustean extension of the year.

Rice too has done well with first crop rice production of 207,514 tonnes, 23.3 per cent higher than the corresponding period in 2010 and the highest first crop in the industry’s history. Taking part credit for the sector’s performance, the government claims that the growth in production was attributed mainly to significantly improved drainage and irrigation as a result of government investments, the development of a new and more tolerant rice strain by the Guyana Rice Development Board, higher yields and, most importantly, a higher acreage of paddy planted.

I witnessed some damage to rice along the Essequibo but the Minister of Finance was confident enough to revise the 2011 full-year growth in the industry from 4.9 per cent to 12 per cent.

Grow more pig tail
The Minister reported increased overall production levels in the livestock industry by 2.7 per cent, with increased production “evident” in areas of poultry meat, table eggs, mutton and beef while pork production declined. When one boasts of such sterling performance words like “evident” tend to raise doubts about the reliability of the data. Two other comments before we move on: while the Minister was exulting about sugar, the supermarkets were complaining to the press that they were getting no supplies, a matter about which the Guyana Sugar Corporation appears to have had no knowledge. The second is that while we have an active Grow More Food campaign run by the Ministry of Agriculture, the supermarkets which are springing up at just about every corner of Guyana stock mainly foreign items. My friend Raymond likes to complain that he cannot get local pig-tail and cowheel and is forced to buy those items which are imported from Canada. That surely makes no economic or policy sense and some explanation would normally be warranted.

The fisheries sector seems to be in some decline and recorded a negative growth of 2.2 per cent during the first half of the year, compared with a target of 0.4 per cent over the production performance of 2010. As a result the industry is now projected to contract by 4.7 per cent in the full year.

Green and gold
The forestry sector had a negative growth in the industry of 30.3 per cent as a result of contraction in the production of logs, lumber and roundwood. As a consequence, the sector is now projected to contract by 19.9 per cent by year end compared to an earlier projected contraction of 1.4 per cent.

There are two significant segments to the mining and quarrying sector – bauxite and gold and diamonds. Production of bauxite in first-half 2011 reached a total of 815,505 tonnes, an increase of 38.6 per cent compared to the same period in 2010. However because of the composition of the industry’s output, a higher proportion of lower grade to higher grade product, converts into a sub-sector growth of 13.8 per cent.

Total gold production in the first half of 2011 was 163,413 ounces, an increase of 14.9 per cent over 2010 which was itself an outstanding year. With the incentive of ever higher gold prices, gold production for the year is now projected to reach 320,000 ounces. On the other hand the diamond sub-sector declined in the first half by 19%.

Manufacturing and water
Mainly driven by, but not entirely on account of sugar and rice, the manufacturing sector is recorded as having grown by 10.6 per cent, Given that rice and sugar were expected to grow significantly in any case, it is not clear why the target for the year has been revised upwards from the budgeted 7.7 per cent to a now expected 9.4 per cent.

Owing to significant investments in the electricity and water sector by the government, the sector is estimated to have grown by 2.6 per cent for the comparative half-year. With more planned government investments, the Minister has revised upwards the sector’s projected annual growth rate 0.4 per cent to 2 per cent.

The Minister reported that while the wholesale and retail sector had been projected to grow by 4.4 per cent, the actual for the first half of the year was 21.7 per cent, attributed to him as “buoyed by the growth in sugar, rice and light manufacturing which have fuelled the availability of supplies, increase in imports of food for final consumption, beverages and tobacco, fuels and lubricants, textiles and fabrics, and building materials.” This is a truly remarkable growth and suggests a level of spending power that many would consider beyond the economy’s capacity.

Complementing the other sectors of the economy, the information and communication sector is estimated to have grown by 5.5 per cent in the first half and as a consequence the 2011 budget projection of 5 per cent is retained. Similarly, the Minister estimates that at the end of the first half, the finance and insurance industry had recorded a growth rate of an incredible 16 per cent, with much of this driven by expansion in activity by the commercial banks. Of all the substantial claims made, I would say that this “estimate” is more than mildly exaggerated.

To complete the story of sectoral growth, the education and health and social services recorded estimated growth of 3 and 3.4 per cent respectively for the first half. In his 2011 Budget Speech the Minister did not announce the growth projected for these sub-sectors but in his mid-year report he announced that their budget growth projections for the full year have been revised to 1.5 per cent and 1.9 per cent, respectively.

Next week we will look at the balance of payments and some of the monetary environment in which the economy performed.

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WikiLeaks and Teixeira

The PPP leadership and indeed others are in a serious quandary over the WikiLeaks cables. These cables allow ordinary Guyanese a unique fly-on-the-wall view of the dangerous extent to which our state has become criminalized under the Jagdeo government while various officials and their friends have amassed considerable and inexplicable fortunes at the expense of the ordinary citizens.

These cables are not the product of amateurism or individual style. They are well structured, classified and sourced. Yet, following the publication in the media of a cable that revealed some collaboration between her and the US Embassy in Guyana, then Home Affairs Minister Gail Teixeira described its contents as “two-thirds” opinion without saying which third was factual. Her political boss refers to the cables as “impressions” while Dr Luncheon, reflecting his recent courtroom experiences refers to them as “hearsay.” Perhaps unable to grasp the significance of the revelations, presidential aspirant Donald Ramotar found them “slightly amusing.”

Let us examine a December 28, 2005 cable reporting on a meeting Ms Teixeira had with the US officials. It contains a Reference ID, date of creation, classification and origin, ie, the particular embassy. This is then followed by a summary which for the meeting Ms Teixeira had with the US officers on December 23, 2005 reads as follows:

“SUMMARY. Charge, Deputy Consul, and Pol. Off met with Minister of Home Affairs Gail Teixeira on December 23.

“Teixeira had requested a Consular briefing on trends in fake Guyanese civil documents detected by the Consular Section.

“Teixeira also described problems with control of the visa process in Guyana’s foreign missions… Teixeira also discussed voter registration problems that continue to dog the Ministry of Home Affairs (MHA) (septel). END SUMMARY.”

Here is a summary of the contents of the cable under the six captions identified therein.

1. No Control Over Birth, Marriage Registrations

Indicating that Ms Teixeira met with the US Embassy as recently as one month earlier, the first paragraph under the caption starts as follows: “Teixeira had asked Ambassador last month to send a Consular Officer to brief her on fraudulent birth and marriage certificates issued by the General Register Office (GRO) that had been detected by the Consular Section.”

2. Trying to Control Who Comes In and Who Stays Out

This caption begins with the following factual assertion: “Teixeira mentioned several suspicious visa cases on her plate.” The section also included the following direct quotes:

“a) However, she did suggest twice that her relationship with the Delhi Embassy was dictated by orders from higher authority.

“b) Teixeira said one of Guyana’s embassies and two honorary consuls in particular, are now her biggest problems on the visa front; and

“c) In Teixeira’s words, Guyana does not have an immigration policy. There is little control over visa issuance.”

3. Corruption Interferes Constantly

Under this caption Ms Teixeira is quoted as acknowledging there “was quite a lot of corruption in the immigration division,” and that a former advisor is “very closely linked to a number of networks, particularly the Chinese.” She is reported as describing “a slush fund financed by Brazilian fees for work permits that [two officials] had run. Unable to pin any direct evidence of illegal activity on [one of them], Teixeira said she had dealt with him by sending him on long-term leave.”

Ms Teixeira is further reported as stating that “while corruption also existed in the police force and GRO, the corruption of justices and magistrates was the most worrying. She said all Guyanese know which cases, magistrates, and lawyers are tainted by corruption. As a result, the government cannot win important convictions. Similarly, she said everyone knows who the ‘drug lawyers’ are, but the local bar association is too feeble to disbar anyone.”

4. Still Uneasy about American Religious Groups and Airstrips

This caption briefly addresses the Seventh Day Aviation medical group operating in Guyana and possible contamination of Amerindian communities by American religious groups.

5. Request for Assistance [by Ms. Teixeira]

The cable states that “Teixeira made two requests for assistance.” These were for 1) “computeriz[ing] the civil document process … and creat[ing] scanned archival copies of all old records” and 2) “auditing the GRO’s internal control procedures.”

6. Comments

In two closing paragraphs the cable expresses opinions including that “Teixeira criticizes her predecessor Gajraj’s imperious, direct control over the Ministry’s workings, [but] she has only slightly loosened the reins of control herself.” The cable ends with the unflattering but not unfair assessment that “more than a few Guyanese insiders think of her as a lightweight better suited to her previous position as Minister of Youth, Culture, and Sport.”

Not only does this cable debunk Ms Teixeira’s statement about two-thirds being “opinion” but it also raises the possibility of another extremely serious matter which she herself brooked with Stabroek News in an article on September 4. She said that she is “known for not disclosing internal party or government matters to outsiders.” Known to whom and in any case in one fell swoop, as evidenced by a single cable, she appears to have done quite a bit of disclosing.

While I am not surprised that under President Jagdeo’s dysfunctional administration the Ministry of Foreign Affairs was excluded from a request for foreign assistance, it is of concern that Ms Teixeira was not accompanied at the meeting by a representative from her ministry. Moreover, it requires some explanation that a minister of the government could be so friendly with a foreign state to which her boss was often openly antagonistic. Maybe Ms Teixeira considered her relationship with the US so special as to exclude them from her noble policy of “not disclosing internal party or government matters to outsiders.”

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The problem of unincorporated associations

Introduction
Last Monday, August 29, I indicated in a letter to SN captioned ‘Nothing illegal about unincorporated bodies operating by the rules’ that I would be reviewing in today’s column the court’s decision in the case brought by the Secretary of the Berbice Cricket Board against the Guyana Cricket Board. The Chief Justice gave the parties short shrift on the grounds that all the parties were legal non-entities and that the court was not the proper forum or avenue for any relief or redress involving the Guyana Cricket Board or any of its three county boards which make up its membership. In my letter I expressed the need to dispel the myth or fear created by Mr Claude Raphael who had attributed to the Chief Justice a statement that the boards were illegal. I am glad to say that the Chief Justice at no point in his judgment described the boards as illegal as claimed by Mr Raphael.

Judgement
Having said that, it is necessary to state that there was in substance as much jurisprudence and law as there were policy and politics in the judgment. Maybe given the continuing saga of the rival boards and factions that have been fighting for control of cricket in Guyana, the Chief Justice was left with no choice but to tell the parties that they have no place in the court-house. But the judgment went beyond issues of locus and into discussions on what were described as matters “of national and general public interest.” For a jurist that is a slippery slope and on page 9, for example, the Chief Justice ventured that because there exists a Ministry of Culture, Youth and Sport responsible for sports in general, “the State has assumed executive responsibility for the welfare, promotion and proper administration of sports in Guyana.”

What the Chief Justice found was that the members of the Guyana Cricket Board were themselves unincorporated entities and therefore incapable of suing and being sued in their own names. Flowing from the non-legal status of the GCB the Chief Justice ruled that the court could not recognise the election of office bearers within that association. He noted that the position would have been different if the membership of the GCB had comprised of persons. In the view of the Chief Justice it “is difficult to see how those member associations could have sent delegates to vote at the GCB elections since their members were not persons but rather legally non-existent persons.”

In the circumstances the Chief Justice noted that while a legislative structure for the administration is desirable there is need for the intervention of the Minister of Sport to “impose his executive will in the national interest.” That solution appears to have been music to the ears of the President who within two days of the judgment moved to impose executive management of cricket in Guyana. This should be contrasted with the reactions in relation to recommendations coming out of the courts on constitutionally important issues such as the television case in Linden or the payment of damages to the teen who was tortured at the Leonora Police Station.

Unincorporated associations
Now what really is the position of unincorporated associations whether in Guyana and in other common law countries? This question was extensively considered in a report done by the Scottish Law Commission from which this column has extensively drawn. This column’s interest in the topic is a recognition of the large number of unincorporated entities in Guyana with two principal characteristics:

(i) as the name suggests, the association is not a body corporate which is incorporated under the Companies Acts or otherwise;

(ii) the association exists for a purpose other than the making of profit for its members, thus distinguishing it from a partnership or joint venture.

Because of these characteristics, unincorporated entities, together with charities are sometimes collectively referred to as the “Third Sector.” Unlike companies, statutory bodies and friendly societies, the law relating to unincorporated associations rests upon common law with the most striking feature being the absence of legal personality accorded to associations and clubs which do not choose to establish themselves as companies or as some other form of incorporated body.

Set out below are the principal problems encountered by unincorporated associations and which persons connected with these bodies need to familiarize themselves:

They have no capacity to enter into contracts. Contractual responsibilities must be undertaken by individual office-bearers or, possibly individual association members.

This restriction extends beyond contracts with third parties but also to contract with one of its own members. They cannot be held liable for wrongful acts committed by their representatives while acting on behalf of the association. Liability rests upon the individual personally responsible for the loss sustained, but it is not clear whether liability – possibly beyond the value of the association’s funds – also rests upon office-bearers or the whole association membership.

A member cannot sue for damages for injury sustained as a consequence of a wrongful act committed by an office-bearer or fellow member while acting on behalf of the association. This, it has repeatedly been asserted, would be tantamount to the injured member suing himself.

They cannot own property. Title must instead be taken in the name of individual members or office-bearers as trustees, necessitating further transfers when such members or office-bearers die or cease to participate in the association’s activities.

This does not however make them illegal. Indeed many laws proceed upon the (strictly false) assumption that an unincorporated association has some form of existence in law. The Companies Act for example requires foreign unincorporated entities seeking to do business in Guyana to register as an external company. The Corporation Tax Act, the Income tax Act, the National Insurance Act and employment legislation all deal with these associations as if they were legal persons.

Absence of recommendations
One of my disappointments in the ruling by the Chief Justice was the absence of any recommendations on addressing the unsatisfactory state on unincorporated associations. Admittedly the boards which had been before him had their attorneys to advise them but could the Chief Justice not have suggested how the vacuum in the law relating to unincorporated associations should be addressed? Or is it that he does not believe that the Third Sector is a matter of national interest and as Mr Claude Raphael demonstrated, the CJ’s ruling has been misunderstood and/or miscommunicated by members of the community. What makes it more unfortunate is that this was not the first time that the cricket boards were coming before the courts. Was cricket of any less national interest then that the court did not feel compelled to make the kind of sweeping recommendation that it made in the current case? While it is true that cricket should not have been thrown into this legal vacuum without any lifeline, the same acknowledgment should have been given to the boards which continue to play an important role in the national sport.

In venturing as it did on policy and executive matters the court gave the government complete latitude in deciding on how long it will control cricket, the terms of reference of whatever body is considered appropriate and the inclusion or exclusion of identified interested parties. Having given its decision in the matter would the court be concerned with the consequences of its decision or has it washed its hands of the matter? The landscape in Guyana is occupied by many temporary bodies, notably GuySuCo’s interim Board which the Minister of Agriculture has assessed as incapable of managing the corporation’s most important asset, and the various extended local government bodies which – for whatever reason – are not doing an impressive job.

Guyana law provides various legal forms, including incorporation by way of an Act of Parliament, that might not have been inappropriate in the case of cricket and perhaps other national sports bodies. Then there is the Companies Act under which even one person can incorporate a company, which should be contrasted with the Friendly Societies Act which requires a minimum of seven persons. What reduces the efficacy of the Companies Act in terms of the not-for-profit organization is that the form of company most appropriate for such organizations – the company limited by guarantee – was abolished when the 1991 Act came into force in 1995, and which despite pleas from the Third Sector has not been substituted. This column can do no better than repeat the call not only for the restoration of the company limited by guarantee, but also for a Charities Act. It is instructive that the England and Wales Cricket Board is incorporated as a company limited by guarantee. The partnership form is inappropriate unless the partnership is a for profit arrangement. Of course, the partnership is, like the unincorporated association, without a legal personality of its own but must register under the Business Name (Registrations) Act.

Conclusion
The cricket boards would need to consult on regularizing their own legal status and that of their members. Whatever they do, however, it is clear that the law relating to unincorporated associations generally is not satisfactory and the various arms of the state should join in bringing forward recommendations so as not to leave the law in its present state. An obvious solution is to confer legal personality on unincorporated associations under defined circumstances. What are these conditions? Here is a wrapped-up recommendation which I have copied from the Scots.
The main conditions for attribution of separate legal personality should be that a body has adopted a constitutive document which includes the following matters:

(a) the name of the body;
(b) the purpose for which it exists;
(c) the criteria for membership;
(d) procedures for election or appointment of those managing the body (including office-bearers, if any);
(e) powers and duties of office-bearers (if any);
(f) distribution of the assets of the body in the event of dissolution; and
(g) procedure for amendment of the constitutive

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Nothing illegal about unincorporated bodies operating by the rules

Mr. Claude Raphael writing in yesterday’s Sunday Stabroek `Government should be supported in its proposal re GCB’ as `Former Chairman Snr. Selection (cricket) Panel’ has written in support of President Jagdeo’s intervention in the on-going saga of cricket maladministration in Guyana. In so doing Mr. Raphael makes a number of sweeping statements including pronouncements attributed to Chief Justice (ag.) Ian Chang in a decision the latter handed down in the internecine Cricket Board dispute which came before him.

The status of unincorporated entities is far from the straightforward “non-entity” that Mr. Raphael says the Chief Justice deemed them, let alone being illegal, which is far from the case. In this coming Sunday’s Business Page I will review the court’s decision but for now I think it useful that we dispel the myth or fear created by Mr. Raphael’s letter that all those unincorporated entities which have been operating and doing excellent work in Guyana are somehow illegal.

Whilst there are certain juridical limitations imposed on unincorporated entities, once the directors or the management committee members, by whatever name called, are operating within the constitution or by-laws of their organization and the general laws of the country such as noise nuisance, taxation etc., there is nothing illegal about them. They need not fear the police coming after them, or being sued in a civil matter. Let me make a brief comparison: minors also have similar juridical incapacities but illegal they surely are not.

Finally, I wonder the extent to which Mr. Raphael may have been a directly interested party in the court matter and even more pointedly whether the cricket club(s) to which he belongs, or entities on which he would have served in a senior capacity for many years, were “illegal” unincorporated entities.