Sunday, July 3rd, 2005

The progress Guyana has made in addressing poverty can be summed up in a few paragraphs drawn from the just released 106 page Draft Poverty Reduction Strategy Progress Report 2005 (PRSPR) which offers some of the most challenging reading since the 48 volumes of Lenin. But the poverty of intellect which underlies the mass of words is highlighted both by a few extracts taken from the Report as well as the incredible omission of any consideration of rice.

Reading the draft, one has to wonder whether any of its authors bothered to look back at the Report 2004 and whether any editing was done to remove any inconsistencies in the current Report. Such errors and omissions only serve to reduce further any intrinsic value of what is increasingly seen as a political document. Rather than raise legitimate questions about how the Skeldon sugar strategy will help the impoverished in the rest of the country, it quotes two conflicting rates of the sugar price cuts by the EU, neither of which is correct.

The Report:

Some samples

Quote: 'The assumptions of the strategy's impact on poverty have not been quantified because of the dearth of data to conduct a poverty diagnostic and impact evaluation of policies. Success in monitoring the outcome of the PRSP in the medium term depends on the implementation of the Social Statistics Project.'

Translation: We are spending billions on a strategy but we have no way of knowing whether it is working.

Last year (2004-05-16) Business Page pointed out that the Government had placed the cart before the horse by taking three years after the PRS programme was launched to set up the Monitoring Unit. Now the Unit, without any hint of embarrassment, tells us that we do not have the mechanisms to assess the results of the work. It is equally baffling why it has taken six years to update the poverty survey or why the PRS targets have not been revised in the 2005 progress report as promised in 2004.

It seems that having published its 2004 Progress Report this Unit, which is headed by Dr. Coby Frimpong and where the salaries are so huge that they have to be quoted in US Dollars, went to sleep and completely ignored the several tasks it undertook to carry out last year. It had promised the completion of the Household Income and Expenditure Survey in 2004, now it says that 'the HIES is underway and preliminary results will be available in July 2006.'

The Progress Report is looking increasingly like the annual Budget Speeches and it is not surprising therefore that several weaknesses of those Speeches are reflected in successive Progress Reports particularly in respect of under-achievements. Apart from the Investment Conference, the following have not been implemented: the establishment of the National Economic Advisory Council, action necessary to continue the political dialogue with the main opposition party (instead the dialogue has formally ended), re-basing of the weights of GDP, enactment of legislation on deposit insurance, strengthening and reorganisation of the Integrity Commission, establishment of the commercial court and improving the Justice Administration (we are now without a Chancellor), holding local government elections in 2004 (instead the Government sought to impose an unelected group on the municipalities).

Quote: 'Despite progress with the legal and regulatory framework, the private sector has not responded in a way that will boost the economy and create jobs that will reduce the prevalence of poverty.'

Translation: The private sector bears much of the responsibility for the failure of the government to carry out one of their major responsibilities: reducing unemployment. Not surprisingly the Report fails to explain why the Government has not held the Investment Conference promised for 2004 or why it has done nothing about Go-Invest, which the 2004 report accused of not having laid 'the groundwork for providing information and company matching services to the private sector'.

Meanwhile the Minister of Finance continues to ignore the law which requires him to publish the annual report of the Guyana Revenue Authority which has been singularly unsuccessful at dealing with the self-employed and the big ones who with complete impunity, refuse to pay while the wage earner and the consumer pay the lion's share of taxes. Incongruously, as part of its poverty reduction strategy the Government is committed to increasing the already high tax burden on the country which is one of the highest taxed developing countries in the world. Incongruously too the majority of the people in the Poverty Unit are paid tax free salaries while imposing additional burdens on the populace.

Source: IMF and GoG

Quote: Given its commitment to maintaining a sustainable debt profile, the Government may have to pursue grant resources, reprioritise its investment and other programmes and seek a waiver in the near term for its debt sustainability commitments.

Translation: Our poverty projects are premised on further debt relief and/or aid since we do not have the money to finance the programme.

Quote: Given the changing modalities of debt relief, Guyana's post HIPC status and trends in development assistance globally, there is the possibility that the external support may fall below what is required.

Translation: We do not think that moving out of the category of Highly Indebted Poor Country is such a good thing after all. It is better that we stay poor, at least that seems to be the thinking and philosophy of this Government.

Quote: There is also the need to improve policy literacy, particularly through the budget process. Satisfying this need is not only the responsibility of government in opening the space for policy education and dialogue, but communities must also feel encouraged to make demands on this space through their representatives.

Translation: Individuals are not welcome through the space allowed by the government.

If this government is serious about policy literacy it can start with its own members of parliament, letter writers and the state media whose contribution to policy literacy is negative. Policy discussion is distorted and discouraged and individuals are either targeted or seek refuge in self-censorship.

Plenty sugar but no rice:

The PRSPR devotes considerable space to the Skeldon Project on which we seem to be prepared to bet the shop and allots space and attention to the Cricket Stadium but none to rice! Now what is the positive contribution from spending six billion dollars on a special purpose sporting facility compared with the rice sector on which about sixty thousand Guyanese depend but which is yet to recover from its own problems with the EU market? There was no public expression of outrage by the Government and the private sector when the EU reformed its rice market with devastating consequences on prices.

This is a test of those who mix their politics with industry interest to see how they will demand a correction of this unforgivable omission. Given the little thinking that goes into the management of the economy the omission is not surprising but it must surely be shocking that a government can so callously disregard a sector from which it derives its electoral support.

Where have the Berbicians gone?

For some time word has been that the results of the Census have been withheld because the Government was uncomfortable with the findings on Regions 5 and 6 from which the PPP/C derives a large part of its electoral support. Well the PRSPR has added a basis for those rumours and the results show that over the period 1990 and 2002, the population of region 6 has fallen by 13% while that of Region 5 has increased by less than 1500.

These numbers are quoted in absolute terms without any reference to what would be the population if the normal rate of net increase (births minus deaths) of 1% is considered. Using the target approach also and taking 1990 as the base, the population of Regions 5 and 6 have declined by 10% and 26% respectively and at the national level the decline is 8.9%.

The incongruity of a policy that permits a single project costing more than the capital budget of the rest of the country in a region with decreasing population needs no further comment. And this is without any reference to expenditure on the Berbice Bridge about which all the Report would say is being left to the same private sector which it criticises for not responding in the way it should to 'boost the economy and create jobs'.

Conclusion:

The seriousness with which the Office of the President takes the document and the strategy is best seen by looking at the website which still lists as members of the Steering Committee George Jardim who left Guyana years ago and Ms. Jocelyn Dow who ceased to be a member for almost as long. Such elementary failure is evidence of the waste in which this country indulges year after year supported by the international financial agencies and the donor community. They could not care less that it is the taxpayers who eventually have to bear the burden of such extravagance and incompetence. It would be good to have a performance assessment system in the Office of the President but then the question is who dares to undertake it?

It is time that the PRSPR is scrapped and replaced by a Development Strategy that changes the economic model and strategy. One that moves away from donor dependence and an obsession with foreign investors whose only interest is maximum returns to one that recognises that for the foreseeable future we have to pursue a tri-sectoral approach to wealth-creation and development.

The rich poverty unit in the Office of the President can then be reassigned to do some real work instead of preparing an annual report that no one will bother to read. Guyana cannot afford such luxury and extravagance. Our intelligence cannot bear further insults.