Dear Editor,

THE proposed SARA bill has been presented to the Guyanese people as an attempt to “recover illicitly obtained assets with the primary objective of reducing the consequential damaging effect of corruption on sustainable development.” This is, of course, a noble cause and I wish to affirm my stand in support of the protection of public property, eradicating corruption in government and promoting sustainable development. But the entire SARA story doesn’t add up. It is clouded with policy issues which SARA would not solve, but instead become a burden for taxpayers. This raises questions about the real motive behind SARA and its potential violation of our constitution.In its present form, the SARA bill is designed to allow the executive branch of government to take justice into its own hand and away from the judiciary. This is nothing more than executive over-reach and legislative encroachment. Allowing the government to confiscate private property allegedly acquired illicitly without prosecution is in effect violating the private property clause and the right to due process as outlined in our constitution. These provisions were placed in our constitution for the very reason of checks and balances and preventing the executive from encroaching on the rights of citizens.

Let me be clear, the government has all right to investigate all acts of illicit acquisition of public assets, this is in the best interest of taxpayers. But beyond such investigation, the government must place such persons before the court of law for it to decide whether such assets were in fact acquired illicitly or not. We must have faith and trust in our judiciary in executing its functions in a fair and unbiased manner. Moreover, it is the right of every citizen to due process in which he or she defends himself or herself. If the government is certain that it has a strong case, then it should not be afraid to present its case before the court. In fact, anyone who is guilty of illicitly acquiring public assets should face such charges and penalties as permitted by the law. This is how a democracy functions. Lawmakers would basically be giving the executive licence to seize and confiscate private property under the disguise of asset recovery, without due process. Lawmakers should not support this bill in its current form, but insist that the ultimate arbitrator in any matter involving the seizure and ultimate confiscation of private property is the court of law and not the government.In moments like this, we need lawmakers to put partisan politics aside and stand up to defend our constitution, defend the rights of citizens and ensure executive powers are kept within established checks and balances.

There is no estimate of how much money the economy was and still is losing from the illicit acquisition of public property, the very purpose which SARU’s existence is based on. Instead, SARU’s conceptualization was solely or largely based on claims that Guyana was losing over $300 billion a year under the previous administration. Specifically, $188 billion through the underground economy, between $25-$35 billion through procurement fraud, and $90 billion through the illicit capital flight. While I have serious concerns about these estimates, the methodology used in their calculation and the lack of evidence in supporting any of these claims, the entire story seems like nothing more than a hoax. Let’s examine these claims and see whether the proposed SARA legislation has any bearing on them whatsoever.

The first claim is that Guyana was losing between $25-35 billion annually in procurement fraud. Without questioning the integrity of the estimate, this means that the APNU government since acquiring office in 2015, would have been able to increase savings or public expenditures by at least $50-$70 billion by simply eradicating the corruption in procurement and without raising a single dollar in taxes and fees. Likewise, the APNU government, since acquiring office in 2015, would have been able to add $180 billion to the economy by simply stopping illicit capital flight. In short, by simply eradicating procurement fraud and curbing illicit capital flight, the APNU government should have added between $230 – $250 billion of new money to the economy without raising a single dollar in taxes or fees. Where is the evidence of this?

In fact, what we have seen is the total opposite of this. We have seen an increase in taxes and fees to the tune of 10,000 percent in some cases and billions of dollars in public debt. Solving the procurement fraud issue requires the establishment of the procurement commission and updating the necessary laws and administrative rules, and curbing illicit capital flight problem requires updating the relevant regulations and enforcement of compliance. None of these commonsense solutions has anything to do with SARU. If the government is serious about these issues it should be putting forward legislation that would solve these problems. To date, no such decisions have been taken, raising the question of whether these claims were based on facts in the first place.

The final claim is that Guyana was losing $188 billion through the underground economy. The definition of an ‘underground economy’ is economic transactions not measured by government statistics and ignoring government regulations and laws. The underground economy is also referred to as the ‘black market’, ‘shadow economy’ and ‘parallel economy.’ Note that these are not illegal transactions, they are legal transactions. To bring the underground economy into the formal economy, therefore, requires broad-based reforms and improvement in enforcement. For example, simplifying and streamlining business registrations, the acquisition of tax identification numbers, making it simple and easy for small and bottom house businesses to get registered and even establishing support systems for such businesses to be encouraged to get on board with government rules and regulations, pay their fair share of taxes and contribute to shared prosperity of Guyanese.

And again, the government’s actions are exactly the opposite of what is required to bring the underground economy into the formal economy. For example, the government increased the cost of acquiring tax identification numbers, increased regulations that would make it harder for small businesses, increased the effective tax rates on households and the list goes on. In short, the measures taken by the government would feed the underground economy instead of curb it. Note that none of this has anything to do with SARA yet again. So, the entire justification of SARA is based on problems which SARA’s existence would not resolve and its real purpose is to empower the executive to take justice into the government’s hand by circumventing the courts.

Let me end by saying I do believe that anyone who stole from the public should be charged, placed before the court of law and for judgment and penalties as permitted by our constitution. The SARA bill, which would empower the government to confiscate private property without due process is undemocratic and unconstitutional. Currently, the government has the power to investigate and prosecute anyone who acquired public or private assets illegally, prosecute such individuals and let the court decide their innocence or guilt, without SARA’s existence. Moreover, the entire justification for the SARA bill is based on policy issues for which SARA’s existence would not solve. Instead, it would be an added burden on taxpayers to fund SARA’s operations. Lawmakers should reject this bill until its mandate can be made explicitly clear, sufficient evidence of the problem it seeks to resolve is available, and that its operations would not violate an individual’s right to private property and due process.

Dhanraj Singh,
Economist