Jul 31, 2008 News Comments Off on PSC Chairman urges… Revamp Privatization Unit
Guyana’s private sector businesses are calling for a revamp of the Privatization Unit (PU).
Chairman of the Private Sector Commission, Captain Gerald Gouveia, on Tuesday, also urged the Privatisation Unit to move beyond being guardian of Guyana’s assets and resources and see itself “as being responsible for the success” of Government companies by working closely with them “to turn the corner” and be profitable and viable.
Earlier this month, Gouveia was named as a member of the Privatization Board and the official played up the role of the private sector in having its say in the entire divestment process.
“The fact of the matter though…is that it’s no longer them and us…the private sector is represented at the highest level of its leadership on the Privatisation Board.”
The remarks of the Chairman were contained in his address to business leaders of Guyana during a one-day seminar on the taxation and privatisation policies of the country.
Making a comparison of the ’70s and mid ’80s where the prevailing system devastated all facets of life in Guyana — food shortages, restriction on importation of essential items for daily existence, unending lines for basic food items, high interest rates, devaluation, and the inevitable mass migration of brains — Gouveia noted that after 1985 there was a gradual reversal of this.
“…The Hoyte administration began the dismantling of the State’s control of the economy, under what was then called the Economic Recovery Programme, the privatisation process and the rebirth of the free market system in Guyana started.”
The businessman acknowledged that while there has been tremendous improvements in the country from the 70s and 80s, there is still a long way to go to “derive the benefits that should accrue from privatisation, since the creation of jobs, and may I say better paying jobs, should have been amongst the objectives of this (privatization) policy.”
Regrettably, Guyana is still unable to create enough employment for its people. There are inadequate salaries to compensate for the constant rising cost of living, he added.
“Regrettable also is the fact that Guyana is now listed amongst the highest in the world for the brain drain. We have all therefore quickly accepted that this can only be realised by encouraging more investment in Guyana.
“Specifically, Direct Foreign Investment and ensuring that there is an enabling environment which will be attractive enough and welcoming enough where investors will feel secure and comfortable with investing their money in Guyana.”
The official pointed out that the creation of the right environment is not the responsibility of the government alone, but of all Guyanese, especially the private sector, civil society and other NGOs.
“Unfortunately what the records show is that every major investor in our country over the last 20 years have been the subject of some kind of public ridicule, from one section of our society or another…in essence…where you stand depended on where you sit …never though in the national interest.”
Transparency, accountability, compliance with the rule of law and “even handedness” are part of the hallmarks and the pillars which must be the basis for all investments, investors and privatization deals, Gouveia said.
“I would also venture to add that it is my view that we must all expect to give some level latitude for flexibility on the part of the government officers as they negotiate and try to encourage investors. In business we all know and understand the need to have flexibility,” he added, in his defence of the government.
Guyanese cannot demand that the government operate like a business, and not expect flexibility. One cannot demand that government minimize the bureaucracy, remove the red tape and layout the red carpet…yet ridicule them if every “I” is not dotted and every “T” is not crossed…We would in fact force them to slow down, ” Gouveia contended.
Calling for a level of trust among the public officers, Gouveia said that Guyanese have to be assured that their only intention is to act “in good-faith” to facilitate the investors.
Several of the public-owned companies are now privately controlled, sometimes resulting in deteriorating quality of governance and in at least one case, such a company has not had an AGM for several years, the PSC Chairman noted.
“We are happy to see that since the privatisation policy paper was written, a number of regulatory bodies were set up to supervise the insurance and public companies.
“However, the relationship between the regulators and those companies has seen far too many matters engaging the attention of the courts. This therefore highlights the need for review of those regulatory systems.”
Taking a sarcastic swipe at the government, Gouveia pointed out that the government is still a major player in the economy, totally controlling GuySuCo, Guyoil, GPL, Guyana National Shipping Corporation, National Communication Network (NCN), Guyana Chronicle, and to this day, “the government allows the army to use its military aircraft to compete with the private airlines in the commercial market place.”
However, the PSC applauded the efforts which have been made so far by the PU.
“We are aware that many of our members, who have dealt with the unit, are somewhat critical of the thrust of the PU and question its role. Recently that role was stated as not only privatizing state entities, but also to protect the assets and resources of the State now held by new entities.”
Rather than being flexible, constructive and even imaginative, some PSC members, Gouveia said, feel that the PU has adopted a hard line and rather than be a facilitator, seeks to be a collector and revenue earner.
“We in the Private Sector do not see that as a developmental role and are convinced that the Privatisation Unit must see themselves as facilitators, developers, encouragers and helpers of those who may face challenges to turn those previous State entities around.
“We feel that there needs to be a building of trust, cooperation and confidence so that the entities play a more productive role in our economy. Wherever possible they should be encouraged and supported to build and grow and not be stifled.”
Gouveia felt that while PU has done a good job, its original mandate is nearing an end and its role should be evolving to a new developmental one.
“However, we should be grateful for the questions that have been raised of the latest (Sanata) deal which as a consequence has brought about this seminar.”
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