QAII DEAL STINKS TO HIGH HEAVENS

Aug 10, 2008 AFC Column, Features / Columnists

---

‘Da Silva, Brassington, Ashni Singh and others

involved should be fired’

An adapted Presentation by Chairman of AFC, Khemraj Ramjattan, in the National Assembly on the Fiscal Enactments (Amendment) Bill – 31st July 2008

When Mr. Yesu Persaud, a doyen of our business sector and an elder who must rank with the most decent, patriotic and astute in our community, had the temerity to point out at the launch of Guyana Times that there must be a broader distribution of the grant of concessions and tax incentives to companies and businesses, it was treated to a tirade of vitriolic abuse by an increasingly belligerent Mr. Jagdeo.

Mr. Persaud’s request was a perfectly balanced, measured and justified call for a leveling of the playfield. So how come such an innocuous call provoked such an un-presidential response?

Why this extraordinary exhibition of arrogance and disrespect to such a respected personage and in the presence of so many with so many cameras on focus?

Mr. Speaker, I have been speaking to this issue several times now, herein, and outside of this Assembly hall. This Government and, moreso, the President who leads it, do not want an iota of challenge from any quarter to any of their decisions or actions. What is wanted by them both is submissiveness.

And if you want to be loud and boisterous it must be only in glorification of them. This Government and its President feel that ‘they know best’ and everybody else are ignoramuses who must attend some seminar which will be arranged at the Govt’s auspices where these ignoramuses will be educated and edified.
Respect is being quickly eroded and replaced even more quickly with arrogance.

This assault on respect for others coming as it does from a President against a harmless soul like Yesu is greatly damaging the reputation, quality and integrity of our Presidency, a Presidency restored with these attributes by Dr. Jagan. Oh how he must be writhing in anger at what he sees happening in his country.

This incidence of arrogance at the launch of the Guyana Times at Le Meridien is what has caused us to be here to deliberate on this Fiscal Enactments Bill 2008. For this reason I wanted to name it the Yesu Persaud Bill.

But no, I rather believe that for the reasons I will detail, the Queens Atlantic Bill will be a better synonym. It is to this Company’s benefaction that this Bill has been brought here. And the circumstances stink to high heavens!

Mr. Speaker largely today’s debate will have to rightly centre on events leading up to this Bill namely the Queens Atlantic deal with the Privatisation Unit, the Guyana Revenue Authority and Go-Invest.

We have now learnt that after there was no suitable response from investors to take Sanata Textiles Complex (after the Chinese left it), Queens Atlantic was approached by the Government to formulate a proposal.

Why Queens Atlantic? Was it because this Company had a true friend in the President? Why did the Government not go to some other Company? We now know, too, that there was a variation between what was advertised for intended investors and what was negotiated with Queens Atlantic.

We are now told that there was an appealing part of the investment proposal. The officials from Go-Invest and Privatisation Unit and even the Government would have us believe it was the Bio-Technology and Textile aspect which were very appealing to them.

I just hope so and hope it was not other attractions which have to do with corruption and clientellism, a word I learnt from Dr. Jagan concerning deals the PNC used to make to its friends.

I say that I just hope so, Mr. Speaker, because of what we already know from studies conducted, the results of which were quoted by me in my last Budget presentation. I want to quote same again to corroborate my suspicions that this deal with QAII stinks to high heavens.

In its Executive Summary – Summary of Main Findings and Recommendations, the World Bank’s Investment Climate Assessment on Guyana stated this: “While corruption is not perceived as a major problem, bribes paid out by firms to secure public contracts are very high – at 15% of contract value.”

So when the Government went forward to deal with Queens Atlantic I hope and pray it was the appeal of the Bio-Technology and Textile aspects of the proposed investment and nothing else!

This Bio-Technology and Textile aspect caused these senior officials, all of them, including the one who is Ministerially responsible in Parliament, the Hon. Minister of Finance, to lose track of the legality of what was going to be granted as concessions and incentives! Was it carelessness? Or was it more?

When the eagle-eyed Accountant, Mr. Christopher Ram, commenced his inquiries as to the scope and legality of this transaction, the entire nation was aghast that no law provided for the grant of concessions and incentives to the two so called pioneering industries His Excellency wanted his officials to lecture Mr. Yesu Persaud on.

I wonder now how embarrassed His Excellency and his Cabinet must be. But true to their character, I am told that they maintain they were not wrong. It was the law that was wrong, they say. And so we are here to remedy the law.

This fiasco, this debacle, Mr. Speaker, ought to have seen officials, who we taxpayers pay huge salaries and big perks to, fired. I mean that! And these officials should include Da Silva, Brassington, Ashni Singh and others involved.

Such a huge faux pas as this in this alleged new dispensation of Guyana’s politics ought to at least realise the take down of some who were the prime movers. But it would not happen in this crumbling democracy, this elected dictatorship.

Not only for the reason that these officials have scant regard for transparency, accountability, ministerial responsibility, and the rule of law, but because from all my inquiries the prime movers believe they are above the law.

We pass Acts – all kinds of Acts, Tax Act, Income Tax (in Aid of Industry) Act 2003, Fiscal Management and Accountability Act 2003, Investment Act 2004, Tender Board Act regulations, Procument Act to amend Constitution, the whole gamut – and none seems to be adhered to.

The adherence to the Rule of Law has diminished as a hallmark of this Administration. Control-freakism has been made prominent! And that is what we have here within the provisions of this Bill 14 of 2008.

The whole hog of powers is sought by the Minister in view of him having found out that he was bereft of any under the 2003 Amendment to make his grant to this beneficiary QAII and its subsidiaries.

We were all here in this Assembly in 2003 when we were being told by the then Minister of Finance that the divesting of the discretionary powers of the President was necessary because of its corrupting influence – the position of the PPP/C in 2003. Why all of a sudden this somersault?

Why this shifting of position? Is there something about discretion now in 2008 that has halted its corrupting influence? Mr. Speaker, yesterday a client came to me. He deals in stationery. Printing is his business.

His broker for some unknown reason in filling up the Customs Entry Clearance form puts in the rates of 15% duty and 16% VAT. It was so obvious a mistake because paper has a 20% duty and a 16% VAT.

He pleaded with them that he could never have deliberately done that to defraud the State because paper is always 20% duty. Moreover, they were there to pick up just that kind of an error.

“No! You want to defraud the State”, shouted the GRA official. He who had made an obvious unintentional error had to pay $25,000.00 (twenty five thousand dollars) fine on the spot. Look I have the receipt!

But those brilliant officials over there – look at them – whose mistake will cause billions of dollars in losses, they having no authority to do as they did, will go un-penalised. Is this justice? I searched hard for the penalty sections of various Acts passed which may apply.

The Fiscal Management and Accountability Act No. 20 of 2003 – Section 85, comes closest to capturing their wrongdoing.

This is what it says: “An official who colludes with any other person to defraud the State or make opportunity for any person to defraud the State is guilty of an indictable offence and liable on conviction to a fine of $2m (two million dollars) and imprisonment for 3 years”.

It is my legal opinion that the officials involved in this embarrassing episode should all be charged under this section, placed on no-bail, and if the jury acquits them, the DPP should file appeals right up to the CCJ in accordance with the recently passed Court of Appeal Amendment Act, so that they stay incarcerated!
The law must not only be for he that is low, but also for he that is high.

Imagine, these officials have not even spared a thought to even apologise for their mistake. Not one of them! They acknowledged their mistake but never thought it fit to proceed to apologizing.

The President ought to, at the very least, publicly apologise to Yesu. In any decent democracy we would have seen resignations. But not here! Decency does not exist here in Guyana!

This Bill Mr. Speaker is brought here so as to legitimize and legalise what I want to regard as a wholly tarnished and (what a whole lot of Guyanese believe) probably a corrupt deal. This bodes bad for our democracy.

I want to close with a passage from a recent book which was adapted for an essay in Foreign Affairs, a popular journal. It is Larry Diamond’s – “The Spirit of Democracy : The Struggle to Build Free Societies throughout the World” – 2008. He is a famous academic and Senior Fellow of the Hoover Institution.

He was talking about democracies which were losing their way and were suffering a democratic roll back. I will quote some passages: “….At-risk Democracies are almost universally plagued by poor governance.

Some appear so trapped in a pattern of corrupt and abusive rule that it is hard to see how they can survive as democracies without significant reform …

…In such States, the behavior of elites is cynical and opportunistic. Ordinary people are not truly citizens but clients of powerful local bosses, who are themselves the clients of still more powerful patrons.

Stark inequalities in power and status create vertical chains of dependency, secured by patronage, coercion, and demagogic electoral appeals to ethnic pride and prejudice…

… Officials feed on the State, and the powerful prey on the weak. The purpose of government is not to generate public goods, such as roads, schools, clinics, and sewer systems.

Instead, it is to produce private goods for officials, their families, and their cronies…
… People do not get rich through productive activity and honest risk taking; they get rich by manipulating power and privilege, by stealing from the State, extracting from the weak, and shirking the law…
… Presidents silence dissent with threats, detentions, show trials, and even murder.

Government Ministers worry first about the money they can collect and only second about whether government contracts serve the public good”. I think that Larry Diamond had Guyana in mind when he wrote those words.

Mr. Speaker, President Jagdeo has made it clear that before he signs on to the Economic Partnership Agreement with the European Union he wants to consult with his people first.

Similarly, should there be consultation with Guyanese, especially business people, before the provisions of this Bill are approved by this House.

Just like how Brassington commenced a negotiation to work out the best deal with QAII, so now must Hon. Minister Ashni Singh commence a negotiation with businessmen to work out the best Bill on fiscal/investor incentives for this Assembly.

The AFC will not support it as it now stands unless this pre-requirement is met, and the sweeping powers of the Minister curtailed.
Thank you Mr. Speaker.

---

---