A democratic system with sound institutions promoting fairness will result in sustainable growth Stabroek News December 14,

, 2013 Dear Editor, Please allow us to share some of the ideas we have proposed in the paper justifying Unity and Human Development (UHD), which can be downloaded at: http://bit.ly/18odYmG. We hope to ventilate these ideas and we welcome criticisms and comments. Here is one of the first principles in which we argue that the state must act fairly as it distributes the resources of the people. From the late 1980s, Guyana adopted a comprehensive agenda of free market reforms, but these reforms paid scant attention to nurturing a developmental state. After the Jagdeo government took over, the state was either criminalized or captured solely for the benefit of special interests. Given the myriad challenges Guyana faces, a developmental state would be essential for clearing several bottlenecks and for addressing the ethnic insecurities. A developmental state is one which is embedded enough to understand the problems and market failures in the society, but is yet autonomous enough so that its various functions are not captured or corrupted by special interests. The state could alternately be predatory. One of the features of a predatory state is that it is captured by special interests. It functions on behalf of a few at the expense of the entire society and overall national development. Political capture results in a corruption of democratic institutions that benefit the few via oligarchic governance. Oligarchic systems tend to deceive the elites in control. They tend to grow faster in the short term because elites capture all the favoured investment opportunities; however, oligarchies will typically collapse because the elites will have established numerous barriers to entry, preventing the masses from succeeding in business and sharing resources. Therefore, in the long term, it is a democratic system with sound institutions to promote fairness that will result in sustainable growth. In the context of Guyana, a developmental state is essential for solving many structural bottlenecks that impede production and employment. Some bottlenecks include the financing constraints businesses face, the high energy costs of doing business, physical insecurity, a limited pool of educated workers, and a limited pool of workers with specific vocational training and technical knowledge. The developmental state will also be required to manage the territorial threats from the western and eastern borders skilfully by providing the most effective foreign service. The state must also be involved in environmental conservation, macroeconomic stabilization, and should spearhead the coordination of structural production change. The developmental state stays while elected governments come and go. The state implements policies of the democratically elected political regime. The state is ever present, specific regimes are not. The scholarly literature defines a developmental state as one with the following capacities: (i) bureaucratic capacity to implement policies and to be accountable; (ii) legal capacity; (iii) territorial capacity to project power; (iii) fiscal capacity to extract tax revenues;

(iv) the capacity to shape societal behaviour; and (v) coercive capacity to deter or repel internal and external challenges. To repeat, in the long term, it is a democratic system with sound institutions to promote fairness that will result in sustainable growth. Yours faithfully, Terrence Simon Hubert Wong Tarron Khemraj (http://www.stabroeknews.com/2013/opinion/letters/12/14/democratic-system-soundinstitutions-promoting-fairness-will-result-sustainable-growth/)