I don't know what's going to happen to my country.

Would Cheddi have sold his house for $120 million?
In the Diaspora
By Arif Bulkan | 29 Comments
In The Diaspora | Monday, March 7, 2011
Arif Bulkan teaches human rights law at the University of the West Indies in Barbados.

At a public forum in Georgetown in August 2009, Distinguished Professor C.Y. Thomas described Guyana as “a state for itself”. Elaborating, Professor Thomas explained that such an entity is even worse than a failed or a criminal state, because it has no “higher altruistic purpose” of national development or national advancement, but is concerned instead with obtaining benefits for those who control it. If anyone were to require support for this analysis, they need look no further than the reported sale by outgoing President Jagdeo of his Goedverwagting property for the staggering sum of $120 million, followed by his acquisition of a second parcel of state-subsidized land in a prime oceanfront area on which he is in the process of constructing yet another mahal.

The events surrounding this sale do not amount to an ordinary real estate transaction, and the ongoing debate as to the President’s liability or not to pay capital gains tax obscures some more troubling related issues about ethics, integrity in public office and accountability. In the first place, the purchase price of $120 million for a residential property in Guyana is virtually unprecedented. In the last few months I have caused checks to be carried out of property values in four of the most exclusive areas in the country – Bel Air Gardens, Bel Air Springs, Oleander Gardens and Courida Park – and the maximum sale price of any property in these areas is in the region of $60 million, just about half of what the President obtained. What makes the President’s purported selling price all the more unreal is that his property was not in any of these prime areas. Despite the perceptions caused by its moniker ‘Pradoville’, the area itself is very rural, with poor infrastructure including only one entrance and exit over a rickety bridge. Across the canal to the east there is the constant reminder of Guyana ’s impoverished masses, where one can see people bathing, brushing their teeth, and conducting all manner of personal hygiene rituals in full public view. However natural such activities may be, they are not features of prime real estate which values ‘location, location, location’ above all else, and because of these limitations one prominent realtor told me that the diplomatic crowd (which pays the highest rents) would generally not contemplate rentals in this area. Thus the undeniable fact of President Jagdeo’s sale is that it commanded a price far in excess of market value.

It is not a norm of commerce for people to pay more for a product than what it is worth. Indeed, it is not a norm of human behaviour for people to act against their own interests. In this instance, the difference between the selling price and the market value was not a dollar or two, but could have been as much as (if not more than) 100%, judging by sale prices in those other exclusive areas. One is therefore compelled to ask why would a savvy Ernie Ross, Guyana consul to Trinidad & Tobago, pay so much above the normal market price for real estate?

The President’s enrichment did not end with the sale of one property, however, for immediately thereafter he obtained another 2.5 acres in north Sparendaam, a more upscale area bordering Courida Park and overlooking the Atlantic Ocean. Despite the whopping profit made on the previous sale, the President parted with a mere $5 million per acre for this second parcel. The exceptionalism of this deal is revealed starkly by comparing what is offered to re-migrants, as one overseas-based Guyanese pointed out in a letter to this newspaper (Harry Gill, 18/1/2011). The largest parcel of land which re-migrants can buy is only 8,000 square feet, or less than one-quarter of an acre. Further, land in the areas offered (Eccles and Providence) costs almost 6 times as much as what the President paid for his second parcel, despite the fact that those areas are generally less desirable. What this means is that if a re-migrant could buy land in Sparendaam, s/he might have to pay $28 million per acre, whereas all that the President shelled out was a paltry $5 million per acre. Thus with this second purchase President Jagdeo benefited in a further two ways – by obtaining much more land than what the average Guyanese would get, and then paying a price for it far below market value.

The costs to the poor Guyanese taxpayer do not end at the provision of heavily subsidized land for Mr Jagdeo. For as revealed during the budget debates by one opposition Parliamentarian, while many areas in Guyana such as Dazzell, Bare Root, Victoria and others on the East Coast of Demerara do not have access to water, water mains were laid to the new housing development in Sparendaam months ago, long before anyone has even moved in. Moreover, at a recent press conference the President admitted that the land in Sparendaam never went to tender, but was “allocated” to members of his Cabinet who did not have land. However, standard government policy regarding the allocation of house lots under the land distribution policy is that beneficiaries must not own or have owned land before.

Such subsidized sales benefit the young and poor; the outgoing President falls into neither category. Even if the condition prohibiting prior ownership is one of policy and not law, its unexplained waiver for the President’s benefit violates basic standards of administrative justice and the rule of law, which dictate that all should be equal under and before the law. Moreover, the executive Presidency created under the 1980 Constitution endows the incumbent with extensive immunities that are more characteristic of royalty than a constitutional office-holder. A moral President should make special efforts to avoid actions that suggest those powers and immunities are being abused. In particular, anything dealing with land, government procurement, and personal gain should be utterly transparent and strictly scrutinized. But President Jagdeo’s land dealings have not been subject to such scrutiny, and reveal instead the utter contempt he has for the Guyanese people.

The President’s large gains are most sobering when considered against the searing inequalities now commonplace in Guyana, where the gap between the government and the governed has taken on epic proportions. The President pays no taxes, lives rent free, and has just secured for himself a retirement package that exceeds even what a US President gets on demitting office. Under recent legislation, the benefits to former Presidents now include a tax-free pension, free medical treatment for him and the dependent members of his family for the rest of his life, an unspecified number of motor vehicles to be maintained at the taxpayers’ expense, an annual vacation allowance equivalent to the cost of two first class return airfares, full time personal security and security at his place of residence, payment of services for an unspecified number of personal and household staff, payment for the services of a gardener, payment for the services of an unspecified number of clerical staff, payment for the services of “technical” staff, whatever that means, payment for the services of an “attendant”, whoever that is, payment of his water rates, payment of his electricity bill, payment of his telephone bill, and toll free road transportation in Guyana.

The only thing omitted from this vulgar list, it seems, is payment for toilet paper.

Meanwhile, many Guyanese live in crippling poverty. One-third of personal income is taxed, and in addition to this a 16% VAT is imposed on many goods and services. Nurses and teachers earn starvation wages, even after decades in the public service. Rentals start at $20,000 per month just for a room in Georgetown, where many live in appalling conditions — a whole community next to a garbage dump that the present government infamously refused to do anything about. Electricity rates are among the highest in the world.

The Council on Hemispheric Affairs (COHA) based in Washington DC recently revealed that one-fifth of the Guyanese population lacks access to clean sanitation facilities, and we boast of one of the highest prevalence rates of HIV/AIDS in Latin American and the Caribbean. Overall, despite figures that show positive economic growth over the past decade, COHA charges that the average Guyanese has not benefited from any so-called increase in prosperity.

I would like to re-phrase my opening question: ‘would Cheddi or Desmond have sold a property for $120 million?’, and the answer is an unequivocal and deafening ‘no’. Former President Hoyte famously eschewed ostentation, and both in and out of office lived humbly in a modest area of Georgetown, a mere stone’s throw from one of the busiest city markets. Former President Jagan was an avowed socialist, who stood for equality and the eradication of poverty among his constituents. This incarnation of the PPP/C under Jagdeo’s stewardship, however, is an unrecognizable deformity, far from the ideals of either of Guyana’s postcolonial parties. It is indeed, as Professor Thomas describes, a state for itself, “with no other vocation but doing and seeing what [it] can grab for itself”. Enter President Jagdeo, whose prodigious appetites will have to be met for the rest of his life through the blood, sweat and tears of Guyanese taxpayers.