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The spending on health

Introduction
An appendix to the budget speech includes some very useful indications about the health of the nation. Here are some of those statistics:

These data tell a mixed story with some interesting variations. For example while the number of deaths per 1,000 of the population for infants (under 1 year) has declined significantly since 2006, the same measure for the under fives has remained almost constant. The percentage of the population that is severely malnourished has halved over the same period indicating a fall in the number from 3,043 persons to 1,556 persons. At the same time the number of persons who are moderately malnourished has fallen from 44,881 to 42,785, although it increased in 2010 when the economy reported favourable growth.

On the positive side too is the rapid growth in the number of doctors from 373 to 537. On the other hand the number of nurses in absolute terms has declined from 822 to 786, suggesting that the doctors now have fewer support staff with whom to work. Now that the government has taken a decision to import skills it is not unlikely that it may move to fill the many vacancies at this level in the health system.

Details of expenditure
Agency Details

It is important to note that there is other expenditure to fill in the wider picture. The Georgetown Public Hospital Corporation is a separate agency in the budget and for 2011 has an allocation of $4.14 billion, or 71% of the budget for the substantive ministry. Expressed another way, the GHPC is allocated 42% of the total allocation of these two budget agencies. It is also uncertain whether there is proper accounting for the considerable sums received from various donors for different projects and programmes, with the major one being the HIV and AIDS programmes.

Over the years Guyana has been a major beneficiary of donor funds for our HIV/AIDS programmes which sought to project us as one of the region’s most infected populations. We received hundreds of millions from several sources and particularly from the US. It is unclear whether these have been accounted for in accordance with the Fiscal Management and Accountability Act which would deem the grants public money to be accounted for through the Consolidated Fund.

Capital budget
The ministry’s capital expenditure for the year is projected at $845 million with the lion’s share being $523 million under Regional and Clinical Services. Of this one hundred and fifty million dollars ($150 million) has been allocated for the “provisions [sic] for preparatory studies and designs for a Specialty Hospital”! Is this for real and was this hospital not supposed to be a free deal arising out of the President’s recent doctoral visit to India? Just improving the doctor’s quarters at Skeldon is budgeted to cost $10 million while filing cabinets, a projector, a refrigerator and chairs will cost $3.5 million. Seems that at Health, the mandate is to go for the highest bidder.

This ministry is one of the most politicised ministries with two ministers and a permanent secretary as political appointees. It is also the ministry in which more than half the employees (683 out of 1233) are contract employees with implications for their independence and right to membership of a trade union which in the main would be the Public Service Union that has had a stormy relationship with successive PPP administrations.

Lack of accountability
Now even by the standards of the Audit Office, the ministry and to a lesser extent the GHPC have had serious accounting issues over the years. In 2009 a fire of unknown origin destroyed the main building and with it financial and other records. What the fire revealed was a pattern of non-compliance with requirements to circulate copies of contracts, Tender Board minutes and basic matters like pay changes.

The matter of financing the GHPC is clearly not consistent with the requirements of the Fiscal Management and Accountability Act in that the corporation has been receiving an appropriation rather than a subvention. The explanation given for the whole question of inadequate accounting and improper financing is far from clear, but we are told that the matter has been submitted to Cabinet for consideration. What is clear is that Cabinet has shown no urgency in complying with the statutory requirements.

Similarly, the GHPC, despite annual adverse comments by the Audit Office continues to spend moneys that should properly have gone to the Consolidated Fund, because the Board approved the expenditure.

Both the GHPC and the Ministry of Health continue to buy billions of dollars of drugs with scant regard for proper tender procedures, sometimes advancing hundreds of millions of dollars to the New Pharmaceutical Corporation for drugs received several months later. It is unclear why this lop-sided relationship has been allowed to continue when the transactions with the company cannot even be verified, and again the disrespect or sheer stupidity of the excuses is hard to understand. These transactions are reminiscent of the unlawful tax concessions given to the group of which this company is a key component.

But these are not all. The ministry fails to adhere to the FMAA in relation to unspent balances causing the national accounts to be overstated, and was unable to provide satisfactory evidence to support the purchase of some $20 million of fixed assets.

Conclusion
There seems more than mere financial lawlessness at this ministry of which one of the ministers had once famously said he would not hesitate to break the law in some circumstances. Earlier this week the Minister of Finance made a real show of calling in the police and the Audit Office at his ministry. Seems that the Ministry of Health can do with some real forensic auditing and those responsible be subjected to serious questioning.

Correction
In the Business Page last week, I mistakenly noted that Education’s share of the National Budget has declined from 10.6% in 2007 to 9.4% in 2010. In fact these percentages should have read 17.1% to 15.3%. I sincerely apologize for the error and the inconvenience caused.

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The spending on education

Introduction
The Budget debate is over and the spending is now in full flow. Contracts are being hastily awarded and colourable initiatives taken with significant budgetary implications. The President’s misnamed One Laptop per Family has begun, and despite the seriousness of the questions and the strength and logic of the criticisms, the project is proceeding as the President wants. All, it seems, oblivious to the sad state of education in the country, the many plans accumulating dust on the shelves, and the increasing disparity of performance of the poor child forced to attend the public schools and those of the powerful and privileged attending the private schools.

Just before sitting down to write – or rather type – this column I was reading the judgment delivered in fluent and beautiful language by former Chancellor Keith Massiah in the case Attorney General v Mohammed Ally delivered in 1987 in the Guyana Court of Appeal. On the question of the justiciability of the then Article 11 which has been adapted into Article 13 of the current constitution as well as enshrined in the fundamental rights article (149c), the Chancellor said: “[The question] is therefore in Guyana at large for debate and decision. Now that it has arisen, the court cannot retreat into a state of intellectual agoraphobia, refusing to venture forth and to express an opinion one way or another.” Responding to the question the Chancellor said: “I see no reason to think that the articles in Chapter II of the Constitution have no juridical relevance and are merely idealistic references with cosmetic value only. So to think would be to seek to debase the Constitution.” Unfortunately those concerned with the formulation and promulgation of our national budget have their own contrary ideas of what consultation means. By way of footnote the current Attorney General was a member of the team whose argument found favour with the Court of Appeal.

Process, not an event
This column sees financial management as a continuous process rather than an event and supports the call by Professor Clive Thomas for an independent Budget Office. With so much milk in the public purse, some competent, independent body needs to exercise greater oversight over the proliferating and omnipresent cats. There seems a view – not entirely without merit – that the absence of accountability stops with the President. In fact we only have to look across the ministries and the regions to find ministers, regional representatives and other politicos who emulate the President when it comes to careless and improper spending and accounting. In other words, such behaviour does not stop with the President but in fact starts with him. The nation therefore has to be on its guard and the fourth estate ever alert to the opportunities for improper use of the public purse.

Starting today Business Page will address with greater attention some of the spending approvals by some of the ministries and departments and intends to ask whether the National Assembly fully understands what is taking place with the finances of the country. I wonder if there is one per cent of the population which knows who the Accountant General or who the finance officer in the Office of the President is. One clue: it is not the President, despite how often and how flamboyantly he speaks and acts as if he controls the public purse or carries it in his back pocket.

‘Mis-maths’
I have chosen for the first of these ministry reviews the Ministry of Education partly because of the topicality and controversy over the One Laptop Per Family project on which more than $5.4 billion will be spent. There is some uncertainty and confusion over the total cost of the programme. The junior Minister of Finance Jennifer Webster announced the cost as US$295 per computer or whatever it is, while for 2010 the total expenditure is projected at $3.6 billion, of which half is from the national budget and the other half is expected from the Chinese. If we take the number of 90,000 households, times a unit cost of US$295 and convert that at G$204 to US$1, the figure is $5.416 billion, some 50% more. I would start then by pointing out that this project is more than half of the budget for the Ministry of Education which is $10.3 billion of which the recurrent budget is $7.544 billion and the capital budget is $2.661 billion. We should bear in mind however that the regions also have budgetary allocations for education, additional to those of the ministry.

A summary of the ministry’s budget follows:

Under-funding at UG
The Berbice Campus of the university, with approximately 550 students, receives $132.6 million or approximately $241,091 per student. By contrast the Turkeyen Campus with approximately 5,500 students receives $575.2 million or $104,581 per student, a significant disparity perhaps explained by the level of fixed cost. Similarly, the capital budget for the Turkeyen Campus is $35 million while that for Berbice is $20 million.

The treatment of the university by the government might come as a shock to Vice-Chancellor Professor Carrington and his team who invested considerable resources in preparing a 2009-2012 Strategic Plan that identified under-financing as the major problem facing the university. The numbers show that the President will be spending on his Laptop programme more than seven times the 2011 expenditure on the University of Guyana.

At a meeting with the private sector last year Prof Carrington reported on an encouraging meeting that his team had had with the President and the Cabinet. He is learning faster than he might have wished about the official policy towards education in Guyana and towards higher education in particular. If it is any consolation to the university, public education as a percentage of the national budget has actually declined from 10.6% in 2007 to 9.4% in 2010.

Information versus education
In its wider Strategic Plan 2008-2013 the Ministry of Education emphasised the critical role which the University of Guyana must play in ensuring quality education throughout the education system. The Laptop programme was not even conceived when that plan was developed and agreed by Cabinet. With such ‘ad hoc-ism’ in planning, it can be no surprise that the 2003-2007 Strategic Plan failed to meet the target of “50% for students meeting the defined standards of literacy and numeracy.”

On teacher training, compare Cyril Potter which gets $87.5 million in 2011 while GINA gets $111.5 million, suggesting that for this government imparting controlled information is more deserving of public funding than teacher training. Or NCN, ostensibly a commercial entity, gets $70 million.

Interestingly enough, employment costs account for 30% of the ministry’s budget for education delivery, while in Region 4 it is 73%, in Region 5 it is 72%, and in Region 6 it is 70%. The 30% in the ministry is partly because the subventions for UG come out of its budget. An interesting comparison too would be the distribution of persons engaged in education delivery across the country. There is a wide disparity across the regions between the ratio of persons engaged in education delivery with Region 6 having the largest number in relation to population of the regions and Region 4 the lowest. Whether this has anything to do with the Ministry of Education being responsible for some schools in Region 4 is not obvious, but it is clear that this would not be true of all the schools.

No contracts
In what is described as the Main Office, eight out of the ten employees are contract employees; under the National Education Policy 21 out of 42, up from 9 out of 28 in 2010; in Ministry Administration 56 out of 194; and Education Delivery 25 out of 2,220 employees. This suggests that the pattern of contract employees does not apply to the teachers, who are among the lowest paid public employees with pay scales range from $38,554 per month to $189,006 for what is called a special scale. Again we only have to compare what happens with the so-called consultants and politicians and other connected persons, who have been placed in the Office of the President at taxpayers’ expense.

One intriguing piece of information is the item ‘Dietary’ under Ministry Administration which is $600 million, a whopping 50% increase in 2010 accounting for 40.2% of that unit’s budget for 2011. This programme appears to have escaped the attention of the Auditor General in recent years. On the other hand it might support the notion that we do in fact have 90,000 poor households in Guyana and they are in receipt of some school feeding or similar programme.

Conclusion
The state of our education system is understandable from the poor, uncoordinated or non-existent policies towards education, the failure to identify and address the problems and the misdirection of budgetary allocation by the government. More than forty years after its birth, UG is treated like an unwanted stepchild, with inadequate support and an uncertain future. Sitting at the apex of our education system, in many ways, UG epitomizes the country’s education woes which it will take more than one laptop to solve.

Next week we will look at another of the ministries.

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Mr Khan’s letter ignores Section 13 of the Income Tax Act exempting only the President’s official emoluments from income tax

Of all the serious questions raised about President Jagdeo’s “acquisition” of acres of land at Pradoville 2, Attorney-at-law Mr Jerome Khan (‘President Jagdeo is not liable to pay capital gains tax after selling his house in Pradoville 1’ Stabroek News, February 15) has chosen to join issue on whether or not the President is liable to pay income tax under any circumstances.

Mr Khan’s entry in the minefield of revenue law with some constitutional implications is welcome and his reminder to readers about section 66 of the Tax Act Cap 80:01 is useful. However, his bold attempt to defend Mr Jagdeo in the absence of any attack and his description of excessive and possibly unlawful benefits as “protection of the law” may be excused as convenient and self-serving, even opportunistic to the point where Mr Khan ignores the basic distinction between what lawyers refer to as a sword and a shield. The constitution’s principal shield for the President is provided under the immunities article (Article 182) and with respect to income, only that it cannot be reduced to the holder’s disadvantage (Article 222 (3)).

Mr Khan’s reliance solely on section 66 of the Tax Act and his certainty about how the courts of Guyana and the Caribbean Court of Justice would rule in a matter that at best involves the thorny issue of a conflict of laws presumes too much and would hardly come from an experienced attorney-at-law. His letter completely ignores Section 13 of the Income Tax Act which exempts from income tax only “the official emoluments [emphasis mine] received by the President both when in and when absent from Guyana.”

In his forays into revenue law, Mr Khan should know that the Tax Act in its many incarnations preceded the Income Tax Act, which was first introduced in this country in 1929. Why would a court ignore the argument that the provision was in respect of known taxes at the time, particularly since under each subsequent Tax Act – Income, Capital Gains and Property – the law specifically addressed presidential exemption. Mr Khan may also note that the long title of the Tax Act is ‘An Act to consolidate the enactments relating to the imposition of taxes for the public use in Guyana.’ He would know too that there have been twenty-one amendments to Section 13 of the Income Tax Act and not a single one sought to exempt from income tax, income other than the official emoluments of the office holder.

Is Mr Khan suggesting that the parliamentary draftsmen, the attorneys general, the ministers of finance, the National Assembly and the president who assents to all acts including amending acts, did not know about the qualification in Section 13? And is Mr Khan aware that the President pays VAT on his purchases of standard rated items in the absence of a specific exemption in the Value-Added Tax Act?

Tax exemption for the head of state has a particular history and context. It derives from our colonial days when the governor’s ‘official emoluments’ paid by the British government had to be specifically exempted for two reasons. The first was that since the office or employment was exercised in British Guiana the income would be taxable here, regardless of where paid. Second, since the emoluments accrued to a person who was considered resident and domiciled in the UK, under their laws it was taxable there. In other words, the income was taxed but not in Guyana.

Ethically minded individuals assuming high political office usually place their personal assets in what is referred to as a blind trust, and studiously abstain from business deals while in office. Lawmakers make certain assumptions about the character of the holders of high office and would hardly contemplate a president being willing to stretch the laws.

But let us for a moment assume that Mr Khan is right: to exploit a loophole in the tax laws for one’s benefit is to engage in tax avoidance – something that Mr Khan as an attorney seems to be advising gratuitously but which Mr Jagdeo as President should resist. And as for Mr Khan’s pronouncements about motive and intent in the Pradoville 1 transaction, Mr Khan may wish to refer to what are called in tax laws the ‘badges of trade’; to the inferences from which motives can be drawn; and to the whole body of relevant case law which I think would be outside the scope of a letter to the editor.

I hope Mr Khan appreciates that this is not some technical issue about conflicts of laws but one of a political culture where a person operates outside and above of the law. It is about the rule of law and the equality of persons before the law. I would borrow his own words and state that I have no doubt that as taxpayer, former politician and now practising attorney-at-law, Mr Khan would agree with me on these and on the improprieties surrounding Mr Jagdeo’s property transactions. In fact the judges of the CCJ would find interesting a ‘lawless’ and unique set of laws while Mr Khan may find his confidence that that court would give him unqualified support completely misplaced.

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Doing Business in Guyana – World Bank/IFC Report

Introduction
Guyana has improved marginally in the World Bank/ International Finance Corporation publication called Doing Business 2011 publication. Of 183 countries included in the report Guyana ranks at 100, compared with 101 in the 2010 survey. Of significance too is the fact that Guyana is listed as having three reform measures in 2010, which is better than most of the countries covered. The report also shows Guyana as one of the 85% of economies that made it easier to do business in the past five years.

Among the persons listed as local partners who would have provided information to the two international bodies are Geoff DaSilva of GO-Invest, Registrar of Companies Ms Carolyn Paul, the Public Utilities Commission, Attorneys Ms Josephine Whitehead, Ashton Chase, R N Poonai and Kashir Khan, business persons Desmond Correia, Lucia Desir, Gidel Thomside of GNSC, and accountants from PKF, Barcellos Narine & Co and Ram & McRae.

The 2011 publication is the eighth in the series that began in 2004 and investigates and reports annually on the regulations that enhance business activity and those that constrain it. Eleven areas of life of a business are covered but one which Guyanese may consider very important is not: electricity, which continues like an albatross around the necks of businesses.

Quibbles and questions

Source: Doing Business 2011

No doubt there will be quibbles over specific rankings and questions about some of the placements. For example Guyana and Canada have similar companies’ legislation with an essentially one-page Articles of Incorporation. Yet for Guyana the time to start a business is shown as 30 days while for Canada it is stated as five days. At 5.3 the index of investor protection for Guyana seems generous and indeed helps to improve its overall position.

Where we do badly is in terms of getting credit (152 out of 183), paying taxes (119 out of 183) and closing a business (130 out 183). Seventy-four for “enforcing contracts” also seems a bit generous with inadequate arrangements for enforcing judgments made in non-Commonwealth countries. As the Table shows under ‘Getting Credit,’ it is a hat trick of zeros and one hopes that the Minister of Finance will follow through on the commitment to get a credit bureau going. The mess-up made by the Attorney General over the Deeds Registry (see Business Page December 5, 2010) was fortunately not an issue at the time the survey was done.

Foreign exchange issues
In addition to the concerns in Doing Business, one issue among investors is worthy of some consideration. It has to do with exchange controls which we are told have all been abolished. But that is not quite true. Yes, the bank and non-bank cambios easily facilitate the conversion and payment of foreign currency. There are some simple, non-intrusive provisions that require declaration and these pose no difficulty for the business persons. But there are others less popular, such as the requirement in the Bank of Guyana Act that all monetary obligations or transactions in Guyana (whether imposed or authorised by a law or otherwise) be expressed and recorded, and shall be settled in Guyana dollars unless otherwise provided for by law or agreed between the parties. But such an agreement requires the permission of the Bank of Guyana after consultation with the Minister.

And under the Foreign Exchange (Miscellaneous Provisions) Act 1996, the permission of the Minister of Finance is required for any of the following:

1. The lending to or borrowing from any person in Guyana, other than an authorised dealer of any gold or foreign currency.

2. The act of any person resident in Guyana which involves, is in association with, or is preparatory to borrowing any gold or foreign currency from, or lending any gold or foreign currency to any person outside Guyana.

3. The operation of a foreign currency account. The concern among foreign investors is the time it takes to open such an account and the conditions applicable to such account.

4. The lending by a person in Guyana of money or securities to a company resident in Guyana but controlled by a person resident outside Guyana.

Guyana a long time ago repealed its Alien Landholding Act but section 333 of the Companies Act still requires a licence issued by the President for the holding of land in Guyana.

Conclusion
Often the concerns about doing business expressed by foreign investors are always ventilated and addressed more easily that those facing domestic businesspersons. That should stop and we need to treat with all constraints to doing business, whether local or foreign investors.

One of the fundamental problems and contradictions in the business infrastructure is that economic activities require rules and laws to establish and clarify rights and obligations. At the same time as we witness the increase in drug-trafficking, terrorism, other crimes including money-laundering, there will be stricter rules that will necessarily impede business. The challenge is to get the balance right.

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Making the Stock Exchange work – Part 2

Introduction
Today I continue the discussion on the Guyana Stock Exchange and what we might do to make it work. I believe that a vibrant stock exchange is an important vehicle to promote growth in the economy and to enable the small investor to share in the national economic pie.

This discussion on making our stock exchange work is more than some abstract financial concept, and relates to some useful initiatives in Jamaica which has one of the oldest exchanges in the region but which up to a couple of years ago had seen trading slowed to a crawl.

If we look at the banking statistics we realise how difficult it is for small and medium-sized enterprises (SME) to raise capital through commercial loans, both because they lack the necessary security to support their loan applications and because they have to pay rates of interest that are often beyond their reach.

The most recent Bank of Guyana report shows the prime lending rate by the commercial banks of 15.06% although a number of borrowers have been negotiating for much lower rates under the threat of taking their business elsewhere.

On the other hand the majority of savings deposit account holders receive interest of less than 3% per annum which is lower than the rate of inflation, even if we ignore the withholding tax of 20%. Part of this dichotomy lies in an examination of some other banking statistics. Table 2.14 of the Banking Statistics at December 31, 2010 shows under ‘Commercial Banks: Liquid Assets’ treasury bills of $64,401.1M, even though this conflicts with Table 2.17 which shows ‘Commercial Banks Holdings of Treasury Bills’ of $65,514.2M.

Add to that the sums of money held by the commercial banks with the Bank of Guyana as “Commercial Banks: Minimum Reserve Requirements”. This stands at $45,101.9Mn compared to a required level of $29,335.0Mn at December 31, 2010, an excess of $15,766.9M. So at the end of 2010 the commercial banks had invested in the government through Treasury Bills and reserve requirements close to $110 billion out of total deposits with them of $248 billion.

It is as if the banks are raising money for the government rather than intermediating funds within the private and business sector to which loans and advances at December 31, 2010 amounted to $76 billion.

In other words, of the deposits received by the commercial banks, the government holds Treasury Bills attracting interest of between 2.67% and 3.78% per annum while the Bank of Guyana holds funds from the banks as reserve requirements another $45 billion which attract no interest at all. On the other hand households and the business sector are loaned $75 billion with a prime rate of 15%! Of course there is small business and low cost housing lending which are at lower rates subsidised by the general tax laws.

I mentioned last week the mindless and costly policy of the government when it comes to managing the financial sector, and am again reminded that the commercial banks are caught between Scylla and Charybdis – the BoG has imposed such onerous lending and provisioning requirements and restrictions on the commercial banks as to discourage lending. These statistics require a separate study outside the scope of a newspaper column.

A viable option
The point is that if we could have an active stock exchange not only would bank depositors have an alternative and possibly better vehicle for their savings, but businesses would be able to access funds at a much lower cost of capital, a term that is common in financial management.

Of course, not all companies and particularly the start-ups are ready for the big time on the stock exchange, and they would not be able to compete with the bigger players. And that is the point about the junior stock exchange that has been working so successfully in Jamaica.

Down Jamaica way
But even the Jamaicans will tell you that they did not initiate the concept, and in their own preparations noted the success of the London Stock Exchange junior market – the Alternative Investment Market (AIM) and the Toronto Stock Exchange junior market – Venture X.

These junior markets allow investors to put capital into legitimate small and medium-sized companies that are listed. Experience from those exchanges has shown how the fundraising and development activities of the listed investment securities have been able to grow the local economy by creating established and transparent businesses, jobs and ultimately, economic confidence.

The Jamaican experience followed the same pattern. Within two years there were some nine companies listed on the junior market in Jamaica across the manufacturing, retail, tourism and finance sectors, and there are reportedly ten other companies preparing to enter the market.

For them the major attraction was lowering their cost of funds.

After only a couple of years Jamaica now has an active junior stock exchange with clear rules of entry and engagement, which despite a 92-page document are nothing too onerous.

In order to be admitted to the exchange a company must issue voting shares by way of an initial public offering, subject to a prospectus seeking a minimum subscription of new shares (or allotment of existing shares) of not less than J$50 million and not more than J$500 million only.

The exchange rate of the US dollar to the Jamaican dollar is approximately 85:1. If a company exceeds its maximum market capitalization of J$500 million, it will be required to list on the main JSE Board.

For the purpose of transparency, annual statutory audit, quarterly and annual reports are required in keeping with the submission requirements of the main exchange. The company must appoint to its board a mentor who is approved as ‘Fit & Proper’ by the Financial Services Commission, the equivalent of our Securities Council.

Companies which are not allowed to list on the junior exchange include a company which is wholly or partially a subsidiary of a registered entity on a recognized stock exchange and one which had been listed on the main board of the exchange.

Attracting SMEs to the exchange
It was recognised that SMEs would be attracted to the Junior Market based on the level of support which will be provided to them. Not all of the assistance was financial or fiscal. They could benefit from the Private Sector Development Programme, a technical assistance programme implemented jointly by the European Union and the Government of Jamaica.

Fiscal incentives included a tax incentive for a period not exceeding ten years from the date of listing on the JSE Junior Market as follows:

i. a full income tax holiday for five years after listing and a half income tax holiday for the remaining years;

ii. exemption from tax on dividends or other distributions by Junior Markets;

iii. exemption from transfer tax and stamp duty on transfers of shares in JSE Junior Market companies.

If the company de-lists within 15 years of being listed on the combined exchanges, it will be required to repay to the government the tax benefits enjoyed during this period.

An SME will enjoy the benefits of any approved tax incentive while on the Junior Market during the allowed incentive period. At the end of the allowed incentive period, the SME will be obligated to move to the main board of the JSE. If the SME decides after the period in which the tax holiday was granted not to list on the main board or to delist without compelling reasons, the SME must reimburse the government for the tax incentive provided.

Conclusion
The big challenge in Guyana to get private companies to bring in outside shareholders has to do with transparency, accountability, governance and tax issues. We have already noted that the lion’s share of corporation tax is paid by a handful of companies.

The names of several of our hardware suppliers, contractors and the politically connected or protected simply do not appear anywhere close.

They are busy gobbling up state assets and are oozing with liquidity.

They seem always bent on ensuring that everything is kept in the family. Governance for them applies only to the government and most of them do not bother with annual general meetings or filing annual returns, and they know that the GRA has only limited capacity to do a good audit.

Still a few of them willing to be pioneers and offering say 25% of their shares to the public could be enough to get a junior exchange started.

All the features of the Jamaican model may not be appropriate to us in Guyana. However they offer a template that could be modified to suit our peculiar needs and to attract entrants.

To continue to do nothing is hardly an option. It is time the government shows some interest in our Stock Exchange.