UNFINISHED BUSINESS - 1996 to 1999

This year Focus takes a look at key issues identified in Budget Speeches over the period 1996 to 1999. The table below identifies some of the critical activities of continuing importance which have not been achieved to date:

TOPIC

PLAN

REMARKS

Rationalising and Consolidating Public Sector Resources (1996)

- A detailed examination of the services provided by each agency will be conducted with a view to contracting out - Computerisation and appropriate staffing for the Central Tender Board along with a revision of the existing legislation

Agencies have not been identified nor has significant contracting out been done. Tender board procedures remain a sore point among sections of population.

Special Issues (1996)

Access funds through the European Union to finance various programmes in Linden

A location study has been competed by the European Union. Meanwhile, Linden remains a depressed area with its main industry - LINMINE facing an uncertain future.

Private Sector Development and the Incentives Framework (1997)

- Provide incentives to attract local and foreign investment - Work with local and international banks to provide long-term pre and post shipment financing, and other related financial and business services to assist the manufacturing sector - Establish a Merchant Bank

This is a commitment in almost every budget. Restoration of Tax Holidays modalities still to be still to be worked out after two years. No progress A consultant recently carried out a study for the establishment of a Development Bank but no report was published. Two licenses have been approved for Merchant Banks to private operators.

Improving the Welfare of Amerindians (1997)

- Develop market networks in the Caribbean for Amerindian art and craft - Acquire transport to further link Amerindian villages

Not done With the privatisation of GAC, air links are less frequent and more expensive.

Youths (1998)

Launch of Youth Employment programme to 1000 young people

Not done

Civil Service Reform (1998)

- Revise civil service rules - Establish benchmarks for civil service remuneration

Done. Rules are now with the Ministry of Public Service. The Public Service Union withdrew from the Committee and the implementation date uncertain. Overtaken by the Armstrong Tribunal.

Structural Reforms (1999)

Commence restructuring of GUYSUCO and GNCB

Done

Private Sector Development (1999) Private Sector Development (1999) cont’d

- Establish a securities council - Bring new semi-autonomous Deeds Registry into operation - Place trade officers in key embassies to improve access to international markets - Review incentive regime - Improve institutional framework for trade and investment facilitation - Appoint a Commissioner of Insurance and supporting staff to enforce legal framework - Support distressed companies

The Securities Industries Act was assented to on December 31, 1998. Council still not appointed. Act passed but not brought into force Not done Review in progress The Merger of Go-Invest and the Export Promotion Council was done. The impact of these is yet to be determined with Go-Invest being publicly criticised for lack of achievement owing to excessive bureaucracy in permits, licenses, etc. We also understand that a draft investment code is with the Private Sector Commission. Not done. This sector controls large volumes of public funds and proper measures are urgently needed in this under-regulated sector of the economy. With the co-operation of the Government, the Banks and the borrowers much can be achieved in putting a number of companies back to viability.

Job Creation (1999)

- Establish an NGO Co-ordination Unit - Carry out a survey of private sector labor needs

Not done A labor market survey requires technical support which is currently being sought from CDB and ILO.

Public Sector Modernisation Programme (1999) Obtain loan from IADB for public sector reform programme Team set up but never met. Technical assistance programme was announced some time in the year 2000.

Ram and McRae’s Comments

Despite the Presidential Summit which the President held with the Private Sector, promises over the years have not been converted into action. The Private Sector Commission has shown extreme temerity in lobbying its case and must accept responsibility for so many commitments not being kept.

The Ministry of Finance’s functions have been split between the Ministry and the Office of the President. To ensure that nothing falls between the cracks, careful consideration and planning is required between these two offices.

Helping Distressed Companies - The FIA has forced the commercial banks to take action against their more delinquent customers. Focus believes however, that it is in the interest of the economy to help these distressed companies wherever possible in a win-win-win situation. The following model is suggested:

  • The lender agrees to restructure the facility including write-off of interest;

  • The Government agrees to waive Corporation Tax on the amount recovered;

  • The debtor agrees to perfect any defect in security and to more direct supervision by the lender.