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Friday, June 21, 2013

LEE: Corruption Hampers Good Governance

By Roeland Zwanikken , filed under: Uncategorized

PHILIPSBURG--President of the St. Maarten Hospitality and Trade Association (SHTA) Emil Lee pressed home, on Thursday night, the dangers of corruption to good governance on St. Maarten, during his speech at the General Meeting of the SHTA. The topic of the night was good "Good Governance and Elector

PHILIPSBURG--President of the St. Maarten Hospitality and Trade Association (SHTA) Emil Lee pressed home, on Thursday night, the dangers of corruption to good governance on St. Maarten, during his speech at the General Meeting of the SHTA. The topic of the night was good "Good Governance and Electoral Reform."
Though little was said by Lee or the other speakers about electoral reform, good governance received all the attention with Lee targeting the effects of corruption in society and breaking it down using simple math: corruption= monopoly + discretion -accountability. In other words, to make corruption resistant structures, monopoly power and discretion must be reduced, which will lead to an increase in accountability. "If elected officials focused on the development of specific and clear policies and delegated authorities to civil servants, monopoly and discretion would be greatly reduced. If clear guidelines are laid out and consequences for corruption are swift and deliberate, accountability would increase," Lee said.

Lee said despite the fact that there are a number of ongoinginvestigations; it is hard to say justice is clear or swift. He mentioned a number of allegations that undermine good governance, which must be dealt with or concluded sooner rather than later. These include, he said, allegations of money laundering related to the sale of government lease land, allegations of buying votes, blackmail, bribery, embezzlement and allegations of violation of accountability law. "While I respect that justice needs time to do a proper investigation, from a good governance/transparency perspective this is taking way too much time. This isn't fair to the people of St Maarten or the accused. It's time to poop or get off the pot," he said. "The point of this analysis isn't to point fingers or anger anyone.
The point of this analysis is to demonstrate that this isn't a theoretical exercise or academic gymnastics. Anyone that cares about the economy, environment and education should care about the structure in which decisions are made," Lee added.

"From all corners of society, everyone seems concerned and there seems to be a consensus on the need for reform or change. While I believe the governing accord is a step in the right irection, I believe that it still needs to be translated into a specific action plan with a focus on the core issues not the symptoms.
"While I understand that volatility and instability in government is bad for the country, the core issue is why our elected fficials are so volatile. There is a risk that just treating the symptoms might actually make things worse, not politically but economically and socially. While it might mean that government wouldn't collapse on an annual basis, it might also mean that politicians might feel less vulnerable as they please without fear of consequences.

"The good news is that St Maarten isn't the only country in the world that needs to strengthen its administrative processes. This is a common problem with easily applicable and easily transferable solutions. There is no need to reinvent the wheel," he added. Relaying a "formula for success" Lee explained that there are some very simple best practices concerning structures, leadership and incentives that have been developed and can be applied to St. Maarten's situation.
He mentioned among others: change the risk/reward calculations for the giving and receiving of bribes (economic crime); raise the probability of bad behaviour and good behaviour being discovered (transparency); increase the rewards for good behaviour (incentivize good behaviour); reasonable public sector pay scales (80 private sectors); raise the penalties for bad behaviour (punish bad behaviour); and use of integrity pacts (self-policing private sector).

However, Lee said when matching St. Maarten's objectives against the formula, "I understand the position we are in." He goes on to four glaring examples.
St. Maarten Tourism Authority: "We have managed to dismantle the Netherland Antilles, from country St Maarten in less time than the formation of a PPP structure to manage our main industry. While it is always almost there, it never arrives. Perhaps because this would translate into reduced monopoly, reduced discretion and increased accountability this may never actually happen."

Tourism Statistical Information System (TSIS): "Any business in today's economy needs to have statistics to measure the success of its marketing activities. The Tourist Statistical Information System (TSIS) would have allowed us to develop demographic information about our visitors. Besides being able to conduct more targeted marketing campaigns, it would allow the destination to gather visitor feedback from exit surveys and to calculate return on investment from a marketing perspective. In other words, it would improve accountability. Despite spending between two to three million guilders of SEI funds, we still don't have any useable data."

Overhauling of the tax code: "With the finance department's self-assessed compliance to be around 30 to 40 per cent, fixing the tax system should be a national priority. The Turnover Tax (ToT) is one of the most destructive taxes for St Maarten. This tax actively discourages locals from buying locally. While things are not yet clear, it appears that the metrics for negotiations were not about what is most beneficial for the country, but what was most beneficial for the contractors."

New Administration Building: "Very few businesses or residents could afford to pay rent and mortgage on an unfinished construction project, but the government's administration building remains a white elephant. This is another glaring example that obviously someone had too much discretion with not enough accountability; but, in the end the tax payers are paying double. "The fact that we can have this meeting, speak openly, have so many attendees from all sections of the community is proof that St Maarten is full of potential. I hope that I have been able to demonstrate that the choices St Maarten faces are not unique, and while the solutions might not be painless or effortless, they are clear. But, it begins with political will," Lee said.