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Restructuring the Public Sector
In mid-1988, the Government announced that it was implementing a significant redirection in Government policy. At the core of this redirection was a virtual reversal of the roles of the private and public sectors in facilitating development. This reversal was seen as necessary to reverse the deteriorated condition of both private and public sectors. By the mid 1980s, arising out of the nationalisation programme that had been undertaken in the 1970s, the Government of Guyana had controlled over 80% of recorded import and export trade and 85% of total investment.
This control of the economy by the public sector did not yield many developmental gains rather most public sector infrastructure had deteriorated sharply. For instance, power and water supplies were erratic, the road system was in deplorable condition, the sea defences, which protected the most productive agricultural lands required major reconstruction, and social services were in poor condition - schools and hospitals needed basic repairs and equipment.
The government determined with the guidance of the international financial institutions that it needed to reduce its participation in a number of these activities. A privatisation programme was therefore started under which - over the next three years - a number of government managed industries and sectors were sold, closed, leased or were being prepared for complete or partial privatisation. These state owned agencies were privatised by international, regional and local companies such as the US Virgin Islands-based Atlantic Tele Network and CLICO Trinidad Ltd. In addition, a number of initiatives were also implemented to train and equip the local private sector to function as the primary stimulators of the economy.
International financial and developmental institutions also advised that good governance would also be promoted through public sector reform. As early as 1983, the IFIs opined that the administrative capacity of the public sector required crucial adjustments to reflect the latter's new role in the political economy of Guyana.
Initially, public sector reform meant a programme of restructuring ministries, eradicating overlapping tasks among government departments and readjusting their activities to facilitate enhanced economic management. For instance by mid 1991 the number of government ministries had been reduced from 18 to 11 in addition to which, dispensable designations within the reduced ministries were eliminated. Further, a limited number of specified professional categories including medical doctors and teachers were separated from the general public service to make easier the payments of higher salaries to these professionals.
These measures, although necessary, were however inadequate to address the structural deficiencies and crisis which gripped the public sector. Evidence of the crisis included lack of professionalism, corruption, lack of transparency and accountability, acute shortage of skills at higher grades, overstaffing at the lower grades and inadequate salaries and emoluments - all resulting in a demoralised, politically dominated public service.
Accountability and corruption in the public service was also addressed as another hindrance to the practice of good governance. The World Bank indicated that the decline of the public sector was partially "a result of the decline in real wages". One strategy used therefore to address this was to increase the salaries to sufficiently attractive levels with the hope of curtailing corruption.
The issue of securing public accountability under a liberalised political climate went much further than attractive salaries however, since a number of the basic instruments of accountability had been allowed to lapse or deliberately sidelined under the Burnham regime. For instance, reviews of the activities of various ministries were hardly held and Parliament had not been presented with public accounts statements in approximately 10 years. To improve these accountability mechanisms, the Hoyte government embarked on a number of initiatives including enhancing salaries of those in revenue and audit departments, and hiring qualified non-political personnel to head various departments. These were designed to begin the process of restoring confidence in the public service since it was recognised that this restoration process would invariably be a long term one.