Democracy and the private sector Business Page Stabroek News July 23, 2000 BUSINESS PAGE is dedicated to providing objective information an opinion on issued of interests to the business community and the public at large. The articles in Business page are prepared and contributed by CHRISTOPHER RAM. Christopher Ram is the Managing Partner of Ram & McRae, Chartered Accountants, Professional Services Firm. Introduction That the elections of the President was the only newsworthy issue coming out of the recently held annual general meeting of the Private Sector Commission must be a cause for great concern to those who hold the view that the private sector in Guyana is the engine of growth. The entire affair has left many wondering whether there is some curse about elections in Guyana. (This curse almost struck the GMA at its AGM last Thursday until the Presiding Officer had to deem a resolution on the elections unconstitutional). The events leading up to the elections were truly remarkable and reflected the most artful boardroom practice. Among these events were a dinner so secret that even the guest of honour could not find the private room in the posh hotel where it was held, plans to out-manoeuvre the would-be king, an extraordinary change of mind, the break with a long-standing principle by a respectable multinational and an end game that is almost farcical. The fears of all those who many years ago saw the rule changes to the constitution of the Private Sector Commission as an incipient and dangerous move designed to shift control from the member organisations to the group made up of the chief executives of the top companies in Guyana have been more than realised. Commentator Kit Nascimento said some six years ago that those who initiated the move "though businessmen are also no less politicians." He saw it not as a way of strengthening the private sector equipping it to be the engine of growth but as a way of exercising control. "When you cut through the rhetoric and get to the bottom line... it comes down to a struggle for power over the private sector," Nascimento added. Disregard With total disregard for the dissatisfaction that the high-spirited pre-election conduct had caused among some of the member bodies, the post election triumphal boast about the "best brains the corporate sector draw together in the PSC" has been interpreted by them as offensive, divisive and entirely misplaced. It really is hard to believe that in this day and age anyone will be bold enough to equate dollars and sense and anyone reading the article in the Stabroek News of July 13 would be forgiven for thinking otherwise. At a time when Guyana badly needs credible individuals and independent organisations to mediate, adjudicate and review the actions of our politicians in matters pertaining to elections and governance the PSC through a palpable lack of thought and concern for transparency and democracy has shown it is no less capable of conduct that falls short of what as a country we so badly need. Mr Norman McLean, Human Resources Manager of Omai Gold Mines Limited, was invited by the CEO's of Guyana's top companies to a dinner and asked whether he would be prepared to accept the chairmanship of the PSC as the incumbent had repeatedly indicated that he would not be seeking re-election. Mr. McLean, not being on the Council of the PSC, indicated that he would consider the request but since he had no standing in the PSC he would have to have his company join the organisation as a corporate member. This action was unfortunate and inconsistent with Mr. McLean's long held reluctance to have Omai take up corporate membership. Gentleman's agreement or gall? Mr McLean's earlier position had always been that what the country needs are strong representative bodies such as the Georgetown and Berbice Chambers of Commerce and the Guyana Manufacturers'Association playing the important advocacy role, promoting and defending the interest of their members. Mr McLean has demonstrated energy and vision and gave sterling support to Mr Sattaur Gafoor the current President of the Guyana Manufacturers' Association. No doubt he would have brought the same qualities to the PSC but then other issues surfaced. One aspirant to the post is reported to have claimed rather unabashedly that there was an earlier "gentleman's agreement" for the rotation of the Chairmanship and that it was his turn. To the PSC's credit it rejected that claim but then either bowing to actual or implied threats or resulting from an extraordinary change of mind it realised that the McLean option could cause difficulties. It had to find a way out. Mr McLean was then again invited to a low-key meeting and offered the most implausible and ingenious explanation why his 'acceptance' had to be turned down. The corporate members, again without any reference to the member organisations of the PSC then offered Mr McLean the position of Vice-Chairman but he declined having suffered both personal discomfort and the embarrassment of providing his employers with a credible reason for the change. To complete the farce Mr McLean not only seconded the motion to re-elect the outgoing Chairman Mr George Jardim but also pledged to support him. Mr Ram Bhookmohan was returned as Vice-Chairman. Damage The problem facing the PSC is not only the fissures which it has once again opened and the blemish to its image but the fact that it has done no more than postpone a decision on what may turn out to be a power struggle next year when Mr. Jardim will be unable to run because of a term limit in the PSC's constitution. The PSC has signalled its own disavowal with succession or rotation but is this a principled, consistent position or one which it will throw aside as easily as it did Mr McLean in the light of changing expediency? The events seem to betray a discomfort with or dislike for democracy among certain members in the private sector. While it is true that a workplace is not the typical democracy modern management and business practices are becoming far more transparent and participatory. In any case given their much-vaunted intellect these distinguished men must be able to differentiate between their companies and organisations such as the PSC which have to conform with the norms of democratic behaviour. They cannot call on the politicians and trade union leaders to be democratic and simultaneously play musical chairs to retain power and maintain influence in private sector organisations. Business Page recognises the sacrifice that some of these persons make in a genuine effort to serve an interest beyond their own companies. Yet the recent incidents and statements are at best disturbing. There seems to be a suggestion that corporate members have superior intellect, that only their contribution to GDP can be measured, that their voices being significant to the economy endow them with special rights to be heard in helping to foster the climate needed for an improved economy. Is the PSC the only vehicle and do they need to pay $500,000 to have a voice? The statement that the CEO group has outlived its usefulness appears to vindicate Mr. Nascimento's earlier fears and suspicions. Now that the corporate members control the PSC there is no need for special meetings: Do it in the name of the whole private sector. Forget that the PSC does not include sugar, rice farmers, bauxite, Didco, Bakewell, Laparkan, much of engineering, gold but for the lure of the presidency, Beharry's, security, the professions and a list too long to mention. Forget as well that all the corporate members are Georgetown-based and that it is virtually an all-male enclave. Anyone who will may come As with every area of life in Guyana there is much that is wrong with our private sector. We do not help our case or the country's cause by over estimating our intellectual and economic capability and then acting on such erroneous assumptions. Guyana needs strong, vibrant and active organisations made up of good systems and dedicated people. We do need a strong, successful private sector much more than we need a powerful and influential PSC controlled by a few individuals. We need organisations that serve our economic sectors with leadership, competence and independence. There are more than enough representative organisations which can benefit from the membership and participation of our larger companies. Banks DIH, Omai Gold Mines, Le Meridien all make immense contributions to member organisations. Why can the other larger companies not do the same? What Guyana needs is not more but better organisations. We are witnessing a new phenomenon in which just about any organisation regardless of substance, history or membership can be encouraged to join the PSC and enjoy the same rights and benefits as say the Georgetown Chamber of Commerce or the GMA. Is this not the same type of democracy we so vociferously complained about in the then PNC-controlled TUC? Several years ago Business Page criticised the proposed membership policy of the PSC in relationship to IPED, a private company, and the aircraft owners and rice millers organisations which it described as "not only numerically insignificant but whose contribution to the economy, though admirable is not comparable to that of the members of the major organisations.' Then of course there is the corporate membership route which grants, for the payment of less than US$3,000 per annum, a voice at the highest level of the PSC with no need to bother with having to be elected by anyone. Interestingly enough had Norman McLean accepted the offer of the Vice-Chairmanship both top positions would have been held by corporate members. Defenders of corporate membership note that the voting strength of corporate members is limited to 30%, completely ignoring their ability to act as a group and to attend and participate in all meetings. Surely the engineering of the recent elections shows that the corporate members control the PSC. Conflict of interest The PSC must guard against the potential conflicts of interest which it can face by its admission of some companies whose business practices may warrant public and critical scrutiny. These companies must find the cost of corporate membership a small price to pay not only to prevent criticism by the private sector body but also to retain it as an advocate of its cause. It must be the least cost, maximum benefit type of lobbying possible anywhere! Credibility Credibility stems from a commitment to principled behaviour and ethical conduct. The pursuit of expediency over propriety can make the PSC an amorphous organisation with no guiding principle or value. The country badly needs a private sector that contributes to economic growth and development, not the recycling of yesteryear ideas articulated by like-minded people. What is the benefit other than control if the PSC is dominated by a few individuals who are common to a number of organisations? Where are the ideas and the arguments going to come from? Where is its call for tax reform, good corporate governance, compliance with the tax, NIS, Companies and other laws, a level playing field for contractors and support to all those businesses including rice farmers who are staring bankruptcy in the eyes. Where are the position papers on a range of technical issues or its voices and resources to defend the threats by our neighbours? Stop and think Every institution whether in the public or private sector must undertake periodic self-analysis and evaluation to assess whether its objectives are being achieved or need re-definition and to determine what adjustments may be necessary in the light of changing circumstances. The PSC must consider whether its admission policy has made it stronger institutionally, contributed to its greater effectiveness and that of the broader good of the country. It must consider whether its open door policy has allowed in persons and companies whose motives are consistent with the objectives and wider responsibilities of an umbrella organisation. It must consider whether that policy places it in conflict situations thus preventing it from addressing otherwise important issues of wider relevance. It must consider whether it has empowered or dis-embowelled its founder and constituent members. It must review its role and objectives for relevance and its structure for effectiveness. Its must consider whether its style and structure allow for effective action after proper consideration and consultation. It must have regard to competence and ensure that only the best are selected and elected. It must be seen to practise democracy in the truest sense of the word. It must ensure that when it speaks on an issue it does so after wide consultation with all its members. It must ensure that it can speak with credibility with all sectors in the country whether politicians in government or opposition, labour, women and society at large. Constitutional reform in the PSC The constituent organisations need to take back control of the PSC. They must take their own members into their confidence advocating their case and providing full reports of their activities including developments in the PSC. They must not allow their interest to be compromised by powerbrokers seeking to defend and promote narrow interest. They have to speak for themselves with the government, the opposition and the rest of society on all matters relevant to their members. These are critical times for the private sector in this country in which civil society is only now trying to regain its place. It is often called upon to address questions of elections and governance at the national level. It needs to put its house in order. Not only the PSC but other private sector organisations as well need constitutional reform. Follow the goings-on in Guyana in Guyana Today