The World Bank Report – draft and final compared A GINA Feature
Guyana Chronicle
January 25, 2004

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COMPARABLE information contained in a draft World Bank Report titled, Draft Development Policy Review and the proceeding final report; Guyana Development Policy Review – the Challenges of Governance and Growth, revealed tremendous changes that have redefined the significance of the draft document.

Information in the draft report [ please note: link provided by LOSP web site ] was intended for scrutiny and necessary comments by the Government of Guyana. However, this information was misused and misrepresented by sections of the Media.

As a result, Minister of Finance, Sasenarine Kowlessar issued a summary of his response to the World Bank draft report to the media. In essence the final Development Policy Review, dated November 6, 2003 vindicates his assertions that the draft report was inadequately researched and lacked substantial evidence.

For example, Section 1.5 of the draft report stated that ‘Commitment to change is often rhetorical and not sustained’. However, due to the lack of strong evidence to support Government's commitments, this section was omitted form the final report.

Minister Kowlessar stated that the draft paper demonstrated profound ignorance of documents that are tabled in parliament and are also found on websites of donors.

For last year alone, two comprehensive legislations, the Fiscal Management and Accountability Act[ please note: link provided by LOSP web site ] and the Procurement Act[ please note: link provided by LOSP web site ] , were passed in Parliament and subsequently assented to by President Jagdeo.

These pieces of legislations will allow for greater transparency and accountability of public accounts.

Additionally, a Draft Broadcast Bill[ please note: link provided by LOSP web site ] , to reform the broadcasting industry, it currently opened to furtherpubic consultation.

Another section (section 1.8) as stated in the draft report and omitted from the final paper, stated that “the governance problem identified in the Poverty Reduction Strategy Paper (PRSP) has worsened, at least until quite recently”.

Rightfully put, Minister Kowlessar stated that the above statement lacks quantitative and qualitative evidence and draws conclusion without proper analysis.

Since, the proposal of Inclusive Governance has been adopted by the Government with an aim of providing greater Opposition Parliamentary involvement in the decision-making process.

Another section omitted from the final report is Section 1.12 stated that ‘the PPP opposes shared governance because it believes it won the 1992 election after many years in political wilderness and should therefore enjoy the same monopoly of executive power the PNC enjoyed during which it consistently refused PPP request for a national unity government.’

This section is a far cry from the truth since the PPP/C Government has always been opened to Inclusive Governance and agreed to and facilitated the functioning of several decision-making public Commissions and Committees.

Section 1.16 of the draft report further stated that “No mention was made of the PNC’s far-reaching paper on Shared Governance (2002).”

To this end, Minster Kowlessar stated that the ruling party considers the governance chapter as reflective of the PNCR statements and extremely biased. That section was subsequently omitted from the final report.

Section 1.2, stated that “The continuing crisis in respect of crime, especially in the East Coast village of Buxton and the manner in which the problem is being dealt with currently has also rendered prospects for any sustainable breakthrough improbable.” This section was also omitted from the final report.

Further omission from the original report, dealing with governance stated that “Unless the agreements of Government and opposition are fully implemented and good governance is put in place, Guyana’s political, social and economic situation could further be undermined.”

According to Minister Kowlessar, the Governance Chapter lacked sound basis and assumed that the village of Buxton is treated unfairly. Further, the ruling party considers the governance chapter as reflective of the PNCR statements and extremely biased.

Economic Transition – An Overview of Development Outcomes

Again, vague evidence led to Section 2.14 of the draft report concluding that “‘In the 1990s, smuggling, money laundering, drug trafficking and other aspects of organised crime were added to the underground economy.”

Since no evidence was provided to substantiate the above claim, that section was omitted from the final report.

Section 2.25 – “At present, progress towards the E-HIPC completion point is mixed with six of the twelve triggers achieved and the remaining six at various stages of implementation. Progress on two triggers in particular – civil service downsizing and investment legislation - is far from satisfactory.

Despite comments in Section 2.25, Guyana reached Completion Point and qualified for the Enhanced HIPC relief in December last year. That section was deleted.

Section 2.35 stated, “Guyana donors fear that governance standards wouldn’t permit external assistance to be utilised effectively as budget support”.

Minister Kowlessar noted that the paper speaks about increases in productivity but does not provide an empirical basis for measuring this. The real reason for increase in real wages should be investigated. Was it for example, the rapid decline in inflation levels from over 100 per cent in 1990 to single digits at the close of the decade?

After further review of the draft report, the World Bank subsequently omitted Section 2.35.

3. Improving Public Sector Performance and Governance
Part of Section 3.3 stated that “….weaknesses remains in all phases of the public financial management process.’ Section 3.4 – ‘Weaknesses in the budget preparation and approval process include …..(ii) Late approval of the budget (up to three months into the fiscal year) which disrupts and delays spending programmes.”

However, with the creation of the Fiscal Management and Accountability Act, all weaknesses in the public financial management system have been addressed. The Act sets out specific guidelines for the preparation and execution of national Budgets. Specific timelines are also set out for the presentation of Budgets for each fiscal year.

Section 3.4 (v) read, “Considerable discretion of the MOF in setting agency budget.” It was subsequently omitted, since it no longer bears merit.

Another section omitted from the final Guyana Development Policy Review – the Challenges of Governance and Growth stated that “The Economic service committee (ESC) set up for this purpose is not functioning, with the result that the budget estimates do not receive enough scrutiny and tend to be approved without amendment by a simple majority vote”.

To this end, Minister Kowlessar stated that the paper does not acknowledge recent structural reforms.

The final report stated that with the recent establishment of the Economic Service Committee (ESC) it is expected that parliamentary oversight would be strengthened.

4. Investment Climate and Governance
Originally stated under Investment Climate and Governance, Section 4.1, it was stated that “Overall private sector development remains seriously hampered by ….corruption ….poor physical infrastructure. These constraints must be addressed in order to improve the business climate for private sector development and achieving its potential.”

Improved Government/private sector relations thought greater commitment and increased incentives led to the omission of the above section.

Also omitted were Sections 4.6 “Despite progress in recent years, Guyana’s economic policy regime is not conducive to private sector development and impedes Guyana’s competitiveness within and outside the region.” Section 4.11 “Business taxes are high and complex with many exemptions, holidays etc. Most tax incentives are discretionary.”

In his response Minster Kowlessar said that the statement “case by case approval of all budgets and programmes by the Office of the President …” is outrageous.

Section 4.12 – A high level of corruption continues even though the efficiency of revenue collection has improved after the GRA was established. GRA was unable to dismiss corrupt officers as envisaged under its operating legislation. As a result GRA’s director resigned in 2002 and no replacement has been appointed.”

Corruption, especially where revenue collection is concern, cannot be totally eliminated. However, Government has pledged human and capital resources towards fighting corruption at the Guyana Revenue Authority. This has resulted in a decrease in the level of corruption at the authority.

As a result, individual cases, where evidence is forthcoming, have been pursued. An example to note is the investigation currently proceeding at GRA into the alleged granting of duty-free concessions to re-migrants.

That section was subsequently omitted from the final report.

In the area of investment Section 4.20 stated that “Guyana has an investment promotion agency that was considered ineffective.”

At its end-of-year media conference, the Guyana Officer for Investment stated that form 2003 alone a total of $17.7 billion was garnered in investment, across sectors.

That section was also omitted from the final report.

5. Investing in Human Development.
In Section 5.7 it was stated that “the NDC leadership remains politically appointed contributing to the aura of politics that permeates planning and implementation even at the local level.’

Coming out of the Joint Committee on Local Government Reform are several recommendation on the way forward for the local democratic organs. President Bharrat Jagdeo and Opposition Leader Desmond Hoyte subsequently set up a Task Force to make recommendation for a revised local government electoral and administrative system consistent with the 2001 constitutional reform. Section 5.7 of the draft report was also omitted.

In the area of infrastructural development, it was stated in Section 5.26 that “Poor infrastructure has contributed to inefficiencies…..”

Reforms in the water, sanitation and housing sectors have been tremendous. Since 2000, with assistance from the IDB, the EU and the CDB, much progress has been made in the rehabilitation of the water infrastructure. As a result, the quality and quantity of potable water supply in Georgetown and Lower Coastal areas have improved.