Tony Vieira's Comments
18 October 2017

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HIPC's
(Aired 10 January 2002)

   Today 41 of the world's poorest countries are bankrupt. These nations identified by the World Bank as heavily indebted poor countries [HIPC] owe some 170 Billion US dollars, while half of their 6 hundred million citizens get by on less than 1 US per day. Guyana is one such country, the only one in Caricom. The 170 billion is of course owed to the richest countries in the world.

   In a recent article published in Foreign Affairs Magazine September/October 2001 by one professor M.A. Thomas an economist at the University of Maryland from which I will quote heavily tonight in this comment, one wonders if HIPCs are truly poor or are made so by their own political administrators.

    The sequence of events seem to be that a country which has a good financial structure commences ill-advised spending, because of a sudden upsurge in the price of one of its commodities in our case it was sugar in the 1980's. These unsustainable upsurges are transient but when prices normalize these countries instead of cutting back on their spending and tightening up their administration borrow ever-larger amounts until they literally have a debt that they cannot pay.

    These 41 HIPC countries have much in common, many of them maintained money losing public enterprises, created government posts to provide employment for friends and family, imposed artificially high rates of import duties, taxes etc and formidable trade barriers. Most HIPC governments have been found to be riddled with corruption, in a survey done by the Transparency International Journal in 2000 it was discovered that 9 of the 15 HIPCs polled, ranked at the bottom of the pile of nations and were the most corrupt.   

    Now ladies and gentlemen I am still quoting here directly from Thomas, "many HIPCs are unable to formulate good budgets because they lack access to reliable information, their biggest problem seem to be significant differences between planned and actual expenditure,.. in more than a third of the countries now receiving debt relief, what is budgeted is often not disbursed and what IS disbursed does not arrive where it is supposed to go"

    "At the same time the executive branch makes unbudgeted expenditures throughout the year, these loose practices make public spending data extremely spotty, the data that IS available is often inaccurate or falsified" Thomas tells us [as if we did not know] that "when making government purchases Hipc's routinely violate the rules of public contracting, officials award contracts to favored companies, despite laws requiring competitive bidding, they manipulate criteria, violate the confidentiality of bid documents, and privately negotiate the terms of contracts, after the contracts have been awarded. As a result these governments persistently purchase unnecessary, inappropriate, overpriced or low quality goods and services"

   Many HIPCs do not archive contract documents making subsequent audits impossible. Thomas misses an important point here, we Guyanese have found a new way to hide these contracts, we have inexplicable fires every now and then. Thomas tells us that complicated spending procedures prompt even well intentioned officials to evade the rules. He tells us that "HIPCs also fail to follow standard procedures of human resource management; recruitment is not transparent and does not correspond to actual staffing needs, minimum qualifications for positions often do not exist, and where they do, they are not respected. Thomas hints here, that these hirings are intended to put in place persons who will aid and abet wrongdoing by the bosses rather than fill vacancies with competent persons"    

    "In many HIPCs procedures and laws are violated in part because systems of monitoring are either weak or non-existent. And listen to this one folks audit offices are typically understaffed, undertrained and underfunded, according to the IMF/IDA report only one third of the HIPC's currently receiving debt relief have active audit systems but even these are ineffective"

   "Many governments do not close their books at the end of the fiscal year and some government units keep no books at all" Now before you accuse me of attacking the government in this country again, since all of this is so familiar to you, let me repeat that this is an article written by professor M.A. Thomas printed in the Foreign Affairs Magazine in 2001 it specifically identified what contributes to a nation becoming HIPC, If you see your own country starring here it is because Thomas knows what he is talking about, I am reporting verbatim from it, and that the Guyana situation is not unique.

   So in the middle of this comment let me ask this question again, do our public administrators make us poor or were we born poor? And if we do not make them change by demanding accountability will we not get poorer?

  Let me continue to quote Thomas, "when government officials violate the law, justice systems often cannot hold them accountable. Police forces are untrained and unequipped, subject to political interference and no match for sophisticated white-collar criminals. Judiciaries are weak, underfunded and corrupt, case files are heaped in dirty corners or kept in rooms often open to the public making them easy to lose or manipulate. Judges lack access to law books and even paper on which to write opinions. The executive branch firmly controls judicial appointments and promotions and consequently interferes with the judicial process"

   The lack of procedures and institutions to ensure accountability is, Thomas tells us, not simply a technical problem to be fixed with money and more training. He expresses the opinion that the root of the problem lies with the very nature of governance itself.

   "In many HIPCs illegality permeates the highest levels of government, implicating presidents, ministers, legislators and supreme court justices, these officials fill posts with cronies and pressure them to grant favors and remit money often collected through bribes and embezzlement. This top –down pressure for illegal activity trickles down to all levels of government creating hierarchies of wrongdoing"

   "At the same time governments officials protect themselves by deliberately destroying the fabric of accountability, it is misleading to say simply, that systems of accountability are weak or nonexistent, someone is actively deliberately weakening or neglecting them to hide the high levels of corruption and incompetence that exists. People charged with maintaining records falsify or destroy them, people who are responsible for nominating Judges choose those who are obedient rather than those who are independent and honest, people allocating resources underfund judiciaries and audit offices, in the absence of the necessary controls all types of abuses become possible from petty corruption to human rights violations. When most of government is corrupt the government is rendered powerless to sanction its own members or reform itself"

     Thomas argues that "simply forgiving debt will not solve the problem since dept relief dollars rarely find their way to poverty relief programs in the HIPCs anyway" he puts it this way that "unless debt forgiveness is effectively conditioned on both the proper use of funds and the pursuit of structural reforms it is unlikely to help the poor, even worse, debt relief funds may be used to support activities that actually aggravate poverty such as war. Or they might be illegally diverted by government officials who to protect themselves further undermine institutions of accountability.  Debt relief packages does not go to the poor it goes to the same governments that racked up the debts in the first place, many of which are weak, corrupt and authoritarian, hardly the best intermediaries to carry out a philanthropic agenda"   

   "Such corruption is fuelled by the public's demand for private goods rather than public policies supporting a system of patronage or ethnic politics the very definition of corruption, the use of public office for private gain. Most HIPC government officials do not fear losing an election if they fail to respond to the people's needs. This lack of accountability plays out in the theft and waste of public resources, in routine torture and extrajudical killings and in the prevalence of government operating with impunity"

   It is all here ladies and gentlemen the HIPC situation is created by corrupt governments aided by a public which does not demand public accountability or proper public services.

    What is the answer? I frankly do not know, but this much is certain, the breeding ground for this type of situation are all here in Guyana, a disinterested public which does not care about the repercussions of putting these same incompetent, corrupt officials in power term after term for nothing other than the color of their skin, or manipulation of the ballot, regardless of the fact that the repercussions can be what Professor Thomas outlines for us here and which is so familiar to us, as it is for 41 other heavily indebted poor countries. This much I do know, we were not created a heavily indebted poor country, we were made so by our racial politics, and unless we begin to demand the accountability I have been telling you about in all of these commentaries, we will continue to be so in perpetuity.