THE STONE COUNT

Sep 18, 2013 Features / Columnists, Peeping Tom

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There are two related issues in the stone controversy. The first is the dispute over whether there is a shortage of stone on the local market; the second is the right of anyone, including the government, to import stone.
No company ought to have a monopoly on stone production and sales in Guyana. As far as is known there are two major quarries operating in Guyana and from all accounts these two companies have over the years been able to supply the local demand for stone.
Stone does not spoil, so there is no reason why quarries should not have surpluses of stockpiles in case there is an increase in the demand for local stone. A  major infrastructural project, be it private or public, should not lead to a shortage of stone, so long as adequate projections about demand are being made.
The government is claiming that at present there is a shortage of stone on the local market and it is threatening to import stone. The government is free to do this, because there are no quota restrictions in place on the importation of stone. In fact, if a private individual feels that by importing stone, he or she can compete with local production, that individual should be free to do so, since such imports will help to avoid a price increase by local producers.
The issue of stone imports should therefore be guided by the market. The government should not be importing stone without paying the requisite tariffs which help to protect the local industry. It is therefore one thing for the government, or any other entity or person for that matter, to import stone. It is another thing for them to be doing so without paying the necessary tariffs. Not paying the import taxes would undermine the local industry, and if this happens, then the matter should engage both the local competitiveness council and its regional counterpart.
If the government therefore feels that there is an insufficient supply of stone on the local market, it is free to import, but do so within the trade rules of the country, which means that the government should not enjoy any preferences by not having to pay the taxes.  The same should apply to any other grouping who wishes to import stone, regardless of whether there is a shortage or not.
But is there a shortage of stone on the local market? A shortage of stone would make it possible for the government to activate mechanisms for preferential importation of stone, as was the case many years ago with cement.
In that instance, the government allowed the importation of stone by waiving the taxes and a regional cement company protested and took its case all the way to the Caribbean Court of Justice, which ruled against Guyana. The country was fortunate to escape serious sanctions for its actions.
Guyana must not court a similar situation. If it decides to allow the importation of stone, it should ensure there is no breach of the trade regulations to which Guyana is a signatory. If, on the other hand, it wishes to waive those rules, then it may first need to establish, unlike what was done in the case of the cement, that there is a shortage of cement.
The Georgetown Chamber of Commerce and Industry (GCCI) is mindful of the situation and has therefore asked the government to give one local company the opportunity to show that it can supply the local market. The issue, however, is not just whether the company can supply the market, because this fact does not preclude anyone, including government, from importing stone. The issue is whether there is a shortage that necessitates the preferential importation of stone.
It would have been much more advisable if the GCCI could have brokered a compromise solution by asking the government to establish an independent panel comprising persons agreeable both to the local stone producers and to the government, to determine if there is indeed a shortage of stone on the local market and if existing stockpiles can satisfy local demand.
There is a dispute at the moment about these issues. The government is saying one thing and a major stone producer is saying another.  To settle this dispute, the facts need to be determined since both sides cannot be right. The way to determine who is right is not by the crossing of words in the media. The way forward is to have a panel agreeable to both sides to investigate and find out the state of stone production and stockpiles in the country.
If such a panel finds that there are inadequate supplies, then the government can make out a case to be allowed waivers to the existing trade rules, because of the shortage. There was a time, of course, when stone production could not meet the demand, and stone was controversially imported into this country.  The importation of stone is therefore, as the past dictates, not without its risks.
If on the other hand there is no shortage, then it means that whoever advised the government was wrong and needs to be corrected. This is the way forward. Simply asking that someone be given the benefit of the doubt will not confirm whether indeed there is a shortage.

 

 

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