Dennis Chung, Contributor
CHUNG
A COMMON thread throughout the recently completed budget presentations has been the issues of corruption and accountability. Over the past year, the government and private sector have been promoting the idea of corporate governance.
Indeed, this is a worldwide concept and became even more important for Jamaica coming out of the financial sector crisis.
GOVERNMENT AND GOVERNANCE
If we are to compete globally then this is surely one way to ensure competitiveness. Based on the budget presentations, we also need to ask why not apply corporate governance principles to government. After all, government is the biggest employer and spender in the country and has the greatest number of stakeholders. We also experience daily the effects of reckless fiscal management over the years as we are stuck with a debt burden which will impact even our grandchildren. Should we not be insisting then not only that corporations adhere to corporate governance principles but also government?
In all these definitions the underlying principle of corporate governance is that the board (government) must put in place proper management structure, systems, policies and the environment to ensure that proper management, leadership and accountability exists. The objective of doing this is to ensure that the goals of the company (country) are met and that this leads to greater value creation.
It is, therefore, appropriate that the Leader of the Opposition, Prime Minister and the Finance Minister all made reference to Jamaica as a corporation, where the Jamaican people are the shareholders and the government the board of directors. I would add that in this model the opposition must be the regulator. This relationship means that the government (board) must ensure that the managers (civil service) are accountable to the shareholders (Jamaican people) in ensuring the prosperity of the company (Jamaica) in alignment with the objectives. In all of this the regulator (opposition) has the responsibility of ensuring that the interests of the shareholders / investors are protected.
OPPOSITION'S RESPONSIBILITY
This means that the role of the opposition is exceedingly important, and it is its responsibility to ensure that government promotes the people's interests. Therefore, in the model of corporate governance, the opposition must understand the importance of its role.
RULES AND TRANSPARENCY
Corporate governance also implies transparency. This must be applied to Air Jamaica and Sandals Whitehouse. I commend the Finance Minister on his call for an investigation into the Whitehouse project and also for his cap on the amount of support for Air Jamaica.
The Whitehouse project has been referred to as "Scandal". Maybe if it were still to be Beaches then it would be called "Breaches".
Effective management means being proactive and not reactive. If proper monitoring systems are in place then we will uncover any deficiencies before the monies are spent. Another example is the way in which we monitor the budget, that is, after the fact. It is within the purview of the government to ensure that effective management is in place to ensure proper monitoring.
GCT ON TOURISM
Finally, a comment on the increased GCT on tourism. The Minister stated that based on the earnings of the industry and the significant concessions it has received over the years it should make a contribution towards balancing the budget. I agree that every sector should play a part in this process. What I would add is that this was one of the most vocal sectors for the continuance of Air Jamaica, despite significant costs to the tax payers. Even more importantly, is that this sector will benefit the most from Air Jamaica and so consistent with that benefit they should be asked to contribute a greater amount. Corporate governance also implies that government must be fair in all its dealings irrespective of the strength of any particular voice.
E-mail: dra_chung@hotmail.com
