Recently Guyana was given a write off from
our national debt of a little over 300 million US, now remember that since
coming to power the PPP have borrowed over 600 million US but the International
financial Institutions [IFIs] have been writing our debt over the past 10 years
to the tune of nearly 1.6 Billion US, where are we in terms of development
notwithstanding these write-offs since 1998? did you see your country
developing? Did you see prosperity? Did you see better governance? Did you pay
less taxes or duties on anything? Did you life improve? It did not? I wonder
why? If you saw no change when they wrote off 1.6 Billion US, why would you see
any when the write off the last 300 million? Did you do something to change the
incompetent, corrupt people who run your country? No you did not!
Today 41 of the world's poorest
countries are bankrupt. These nations identified by the World Bank as heavily
indebted poor countries [HIPC] owe some 170 Billion US dollars, while half of
their 6 hundred million citizens get by on less than $1 US per day. Guyana is one such country, the only one in Caricom. The 170 billion is of course owed to
the richest countries in the world and to qualify for this most recent write
off, this country had to be one of the 18 poorest in the world at the bottom of
heap.
In September 2001professor M.A. Thomas
an economist at the University of Maryland told us what causes a country to
become HIPC.
The sequence of events seem to be that
a country which has a good financial structure commences ill-advised spending,
because of a sudden upsurge in the price of one of its commodities in our case
it was sugar in the 1980's. These unsustainable upsurges are transient but when
prices normalize these countries instead of cutting back on their spending and
tightening up their administration, borrow ever-larger amounts until they
literally have a debt that they cannot repay.
The 41 HIPC
countries have much in common, many of them maintain money losing public
enterprises, created government posts to provide employment for friends and
family, imposed artificially high rates of import duties, taxes etc and thus
created formidable trade barriers. Most HIPC governments have been found to be
riddled with corruption, in a survey done by the Transparency International
Journal in 2000 it was discovered that nine of the 15 HIPC's polled, ranked at
the bottom of the pile of nations and were the most corrupt"
"At the same time the executive branch
makes unbudgeted expenditures throughout the year, Mr. Jagdeo ladling money
without parliament's permission all over the country is a good example, these loose
practices make public spending data extremely spotty, Thomas says that "when
making government purchases HIPCs routinely violate the rules of public
contracting, officials award contracts to favoured companies despite laws
requiring competitive bidding, they manipulate criteria, violate the
confidentiality of bid documents, and privately negotiate the terms of contracts
after the contracts have been awarded. As a result these governments
persistently purchase unnecessary, inappropriate, overpriced or low quality
goods and services"
Many HIPCs do not archive contract
documents making subsequent audits impossible and HIPCs also fail to follow
standard procedures of human resource management; recruitment is not
transparent and does not correspond to actual staffing needs, minimum
qualifications for positions often do not exist, and where they do, they are
not respected. Thomas is suggesting that these hirings are intended to put in
place persons who will aid and abet wrongdoing by the bosses rather than
fill vacancies with competent persons"
Thomas says that "many governments do
not close their books at the end of the fiscal year and some government units
keep no books at all" every year since 2001 I have been telling you that
Auditor General Goolsaran keeps complaining that every Ministry breaks our laws
at the end of every year by not returning unspent money to the Consolidated Fund,
the use of the lotto money by Jagdeo for political purposes to endear himself
to some communities is also scandalous, unfair and discriminatory.
Thomas tells
us that "when government officials violate the law, justice systems often
cannot hold them accountable. Police forces are untrained and unequipped,
subject to political interference and no match for sophisticated white-collar
criminals or drug dealers. Judiciaries are weak, under funded and corrupt,
Judges lack access to law books and even paper on which to write opinions. The
executive branch firmly controls judicial appointments and promotions and
consequently interferes with the judicial process"
"In many HIPCs Thomas tells us, illegality
permeates the highest levels of government, implicating presidents, ministers,
legislators and supreme court justices, these officials fill posts with cronies
and pressure them to grant favours and remit money often collected through
bribes and embezzlement. This top down pressure for illegal activity trickles
down to all levels of government creating hierarchies of wrongdoing"
"At the same time governments officials
protect themselves by deliberately destroying the fabric of accountability, it
is misleading to simply say, that systems of accountability are weak or
nonexistent, someone is actively deliberately weakening or neglecting them to
hide the high levels of corruption and incompetence that exists. People charged
with maintaining records falsify or destroy them, people who are responsible
for nominating Judges choose those who are obedient rather than those who are
independent and honest, people allocating resources starve judiciaries and
audit offices of funds, I have given you first hand evidence of this
undermining of the Legal system in this country by starving it for money, in
the absence of the necessary controls all types of abuses become possible from
petty corruption to human rights violations. When most of government is corrupt
the government is rendered powerless to sanction its own members or reform
itself"
Thomas argues that "simply forgiving
debt will not solve the problem since dept relief dollars rarely find their way
to poverty relief programs in the HIPCs anyway" he puts it this way that "unless
debt forgiveness is effectively conditioned on both the proper use of funds and
the pursuit of structural reforms, it is unlikely to help the poor, even worse,
debt relief funds may be used to support activities that actually aggravate
poverty and fuel corruption. Debt relief packages do not go to the poor it
goes to the same governments that racked up the debts in the first place, many
of which are weak, corrupt and authoritarian, hardly the best intermediaries to
carry out a philanthropic agenda"
"Such corruption is fuelled by the
public's demand for private goods rather than public policies supporting a
system of patronage or ethnic politics the very definition of corruption, the
use of public office for private gain. Most HIPC government officials do not
fear losing an election if they fail to respond to the people's needs. This
lack of accountability plays out in the theft and waste of public resources, in
routine torture and extrajudicial killings and in the prevalence of government
operating with impunity"
So will anything change because of
this recent write off? Or will there just be more money to thief now, and
probably less pressure from the IFI's to force good governance?
The US Government is right, these
write-offs if not accompanied by substantial changes to the way the governments
of the HIPC nations conduct their business will change nothing, writing off the
debt is not the answer, writing off the governments that create them are, you
ladies and gentlemen have the power to do it, are you prepared to take the fist
step next year?
