Eye On The Issues by GHK Lall: The financial sector has had a free pass; time to change that

Last Updated on Tuesday, 18 April 2017, 22:27 by Denis Chabrol

There have been occasional mutterings over a very profitable segment in the visible, well-regarded part of the Guyanese economy.  It is time that an honest probing telescope is trained on it, and the mutterings coalesce into a consistent crescendo.  The private financial sector is highlighted.

Even to the untutored layman, there is some discernment that recognized institutions may have allegedly aided, if not allegedly abetted, wrongdoing of the worse kind in this society.  They appeared to have furnished financial comfort and financial cover for wrongdoers engaged in businesses that are about violence, blood, and other assorted evils.  In so doing, this segment of the private sector has done well for itself; the glowing media disclosures speak volumes in this barren society where multitudes live in severe deficits.  The applause and regard for this sector must cease; a different drumbeat, once muffled, must now reverberate and draw attention to its sordid collaborations.

In many a long rollicking year, this staid, starched community has rarely, if ever, filed one CTR (Customer Transaction Report), or SAR (Suspicious Activity Report), or the local equivalents with any oversight agency.  The steel filing cabinet served as the burial ground for the clear persuasive evidentiary chains furnished by the financial tricksters.  Among the activities ignored were and are those that: lacked economic substance, made no financial sense, were out-of-customer profile, and were highly suspicious in and of themselves.  There are no dots to connect; the dots are so many and so large that they mass and tumble into easily recognizable blobs.  The blind and illiterate would have been wise to what was transacted under a diaphanous veil of legitimacy.

There should have been questioning and acting.  In fact, this is done but with mainly the small inconsequential customer.  The actions are instructive in the cunning arts of selective due diligence, class discrimination, and administrative chicanery.  An ordinary struggling citizen presents himself, and it is the third degree about identity, source, and the equivalent of a Homeland Security grilling.  The full nelson lock of exhaustive bureaucratic pressure comes alive and is brought to bear on the insignificant ones.  It does not matter that he or she is honest, clean, and a longstanding customer; he is simply too negligible in the bigger picture, and therefore a prime target for the pretense of AML compliance.

Now if the same sharp thorough interrogatories are brought to bear on the big ones and the big guns, then this would be a markedly different, if not cleaner place, economically speaking.  A regulatory sensitive and sound money sector has an integral part to perform; of course, if it does so that would diminish the impressive financials.  To a material extent, the latter are the result of the collusion and cooperation, albeit tacitly, between the captains of what passes for commerce, and the self-appointed high priests of high finance.  When lumped together, they represent a low group of people.  It is where the bloodied fist greets the bespoke suit.

Still, if the high net worth customer contexts were different, it would be a warming example of putting the customer first.  Then again, there are customers, and there are much sought after specially prized customers; they add to the black ink bottom line.  The man-in-the-street customer should not be mistaken for belonging to the latter group.  One more thing: every time that there is such willful blindness and such accommodations occur between collaborating interests, the rest of the country pays yet another tax.  This one is not government in origin.  This tax goes beyond money and balance sheets.  It is a quality of life tax, a safety tax, an ethics tax, an environmental tax, and a tax on the present and the future.  Guyanese live involuntary with all of this collateral fallout.  They know who and where to lay the blame, even though it is too late and of little solace.

In closing, I paraphrase Balzac: behind every great income statement there are corresponding great crimes.  For too long the local money players have been given a free pass; it is time to expose it and then haul it over the coals.