SHTA discusses corruption and good governance “Private sector has shared responsibility”

POSTED: 06/21/13 12:31 PM

Emil Lee and Alma Balcazar

SHTA-President Emil Lee shares a word with Transparency International’s Alma Balcazar. Photo Today / Milton Pieters

St. Maarten – “For a government to be corrupt there must be a counterpart in the private sector.” With that statement Alma Rocio Balcazar, a member of Transparency International makes clear that it takes two to tango. Balcazar addressed the annual general meeting of the hospitality and trade association SHTA at the Great Bay Beach Hotel last night.

Balcazar, who is from Colombia, noted that the private sector has a lot of work to do to gain the confidence of the public. Research has shown that the private sector’s trust-level stands at a meager 41 percent. Another 45 percent thinks that the adoption of government policies is influenced by corruption, and 59 percent thinks that governments are ineffective in their fight against corruption.

Balcazar said that lack of corporate governance procedures has dire consequences. It is a threat to free market systems and to democracy and it leads to increased poverty and social problems. Institutions also lose their legitimacy.

The Transparency International representative said that the private sector has a shared responsibility and that it ought to implement corporate governance programs within individual organizations, as well as anti-corruption policies. The private sector should also promote legal reform and participate in transparency indexes, she said.

The SHTA-meeting was attended by amongst others Prime Minister Wescot-Williams, Minister Cornelius de Weever and MPs Gracita Arrindell and George Pantophlet. But when SHTA President Emil Lee went deep into corruption practices in St. Maarten, the Prime Minister left the meeting. It is unclear whether there is a relationship between Lee’s address and the Prime Minister’s departure.

Lee said that there is a direct link between transparency in government and gross domestic product: the higher the transparency, the better the economy performs. “Corruption makes things more expensive,” Lee said. “It has an impact on economic development and the environment, it leads to the erosion of values and the trust in government and it damages honest competitors. Ultimately, poor people pay the price.”

Lee noted that everyone in St. Maarten is concerned about corruption. “There is a need for change,” he said. As examples of the concerns he showed a cartoon that was published in the newspaper (and on Facebook, to be fair) wherein a boy announces to his dad that he plans a career in organized crime. “Government or private sector?” his dad asks. Other examples are the bumper sticker that reads: don’t steal; the government hates competition and a remark in a Teen Times article that said: government is a joke.

Corruption is monopoly plus discretion minus accountability, Lee pointed out. To combat corruption, monopolies must be reduces, discretion must be limited and accountability must increase.

The SHTA-President said that there are ways to combat corruption: change the risk-reward balance, increase the probability of detection, increase rewards for good behavior and penalties for bad behavior, and sign integrity pacts.

The shortcomings of St. Maarten are legendary, as it appears from the examples Lee mentioned in his speech. “The tourism authority is almost always almost there but it never arrives,” he said. The same goes for the Tourist Statistical Information System TSIS. “Even though 2 to 3 million have been spent on it, we still have no usable data.” Tax compliance stands at between 30 and 40 percent, the turnover tax (“the most destructive tax we have”) benefits contractors and not society, Lee said. He also referred to the hapless new government administration building on Pond Island.

“I understand that justice takes time, but some of these things are just taking too long,” he said. “It is time to poop or get of the pot. These are all real things that affect the quality of life. The solution is not pure government; citizens and the private sector also have a role to play.”

Lee took a stand for openness and transparency. “Make all processes transparent. Imagine if all bus and taxi licenses and other licenses were made public. They ought to be issued on merit and to people who need them, and not be used as currency to buy votes.”

Lee ended with a quote from Thomas Jefferson: When the people fear the government you have tyranny, when the government fears the people, you have liberty.”

Lastly, Lee had an interesting remark about where bribes go: “The highest bribers are not going to senators, politicians or contractors, they go to newspaper editors,” he said.

Former Lt. Governor Franklyn Richards addressed the issue of corporate governance, labeling it as a window of opportunity. Make sure that the Corporate Governance Council functions,” he warned.”If it is weak, you will not achieve your goals.”

Richards referred to the political steering group meeting of 2008 in Belair where the government agreed to regulate corporate governance for government-owned companies. “By ratifying that agreement the government agreed to ensure good corporate governance, but we have seen how difficult it is to implement it. You cannot build a country without those institutions; that will end in chaos and social unrest.”

Richards showed that St. Maarten’s gross domestic product was $1.2 billion in 2010 ($31,497 per capita) and that the current budget (457.9 million guilders) is just 20 percent of GDP. The balance sheet of the government owned companies combined is $1.8 billion, or 81 percent of GDP, while the turnover of the twelve companies in 2009 was with 603 million guilders already larger than the state budget and represents 27 percent of GDP.

The SHTA honored its former Executive Director Robert Dubourcq who has retired and is returning to the Netherlands. Dubourcq was named Today’s Man of the Year in 2012 for his career in the hospitality industry. He started the St. Maarten Hotel association in 1970 at Claude Wathey’s request; this became later the current SHTA. He is also the man behind the successful Dollar-a-Day program that has enabled the SHTA to support many social initiatives. Dubourcq received a lifetime achievement award during last year’s Crystal Pineapple awards ceremony and recently he received a Paul Harris Fellowship Award from the Rotary Club of which he was the president from 1983 to 1984.

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