By Gitanjali Singh
Stabroek News
June 26, 2001

Leading off the debate on the 2001 budget in parliament yesterday, Murray said the hour was late and much is to be put right to create a bright economic future for Guyana's youths.

A former trade minister in the PNC administration, Murray noted that the economy's performance has deteriorated under this government, pointing out that in 1992-4, GDP growth averaged 8.2% annually; between 1995-7 GDP growth averaged 6.4% annually and between 1998-2000, GDP expansion averaged 0.1% annually.

He listed four issues on which the government needed to act now to get the economy going, starting with clearly defining ground rules to attract investments so as to push economic growth and development.

He argued for all incentives to be automatic once the criteria for incentives have been defined.

"This will go a long way to create confidence in the system," he argued, noting the skepticism involved in a non-transparent and discriminatory system with discretion in the hands of ministers. He said in the current incentive regime, investors will not feel that they are getting a fair deal.

"If the rules are clear, he (the investor) will feel much more confident," Murray stated, referring to the recent example of Caribbean Telecommunications Limited claiming discrimination in a tax holiday being granted to CelStar. Geoffrey DaSilva, head of the Guyana Office for Investment (Go-Invest) has advised that CTL's application for a tax holiday is also being considered.

The second thing which the government has to act on, Murray said, is to bring greater efficiency and relevance to the institutions which impinge on the success of economic transformation and cited Go-Invest as an example.

He questioned the need for Go-Invest sponsoring a forum on the Caribbean Basin Initiative (CBI) for this week when a more relevant seminar would be the prospects and problems allied to the proposed Free Trade Areas of the Americas (FTAA). He wants to know whether the CBI conference is for historical purposes.

Murray further argued that the revolving door of Chief Executive Officers (CEOs) at the agency has not inspired confidence in the agency, much less the four CEOs themselves.

Murray also asserted that the PNC/R is opposed to President Bharrat Jagdeo chairing the board of Go-Invest and is of the view that the post should be held by the Minister of Finance, Saisnarine Kowlessar. Murray said that it is the minister who is vested with the authority to grant concessions and it is embarrassing to by-pass him in this post. Further, he noted that the President should serve as the person to whom a final appeal could be made and should not be played as the first shot in negotiating with investors. He urged instead, that the minister explore to the nth degree, winning of the investment and if needs be, then the President enters as the last resort.

The PNC/R front-bencher further argued that the institutions in Guyana must be geared to give positive responses to investment inquiries rather than to hinder or obstruct such investments. He cited the case of an internet service provider and a cable service operator who were recently written to by Prime Minister Sam Hinds about their operations.

Murray said that while he holds no brief for these persons, the country's ultimate aim is to have competition in the telecommunications sector and to get the best quality service for consumers at the best price. He said that Guyana should be proud of these entrepreneurs who have kept abreast with technology and have carved niche markets for themselves. He said that their efforts should not be frustrated by red tape but rather they should be approached positively. He suggested that if they have not fulfilled some particular letter of the law, the government should work with them to see how they can be helped to operate within the law.

His third recommendation is for the government to adequately fund and staff the various institutions with the best professionals and to ensure that resources voted are used for the purposes intended. He cited the bungling in resource usage in the intermediate savannahs agricultural project as highlighted by the Auditor General's report where $14.7 million of the $48.2 million spent was unexplained and administrative costs totalled $8M whilst consultancy fees were high. He also noted a seed project at NARI where the voted amount was spent on revetment.

"I find these shocking. No wonder we are getting no where seeing development in these areas coming to fruition," Murray stated.

His final recommendation is for the government to ensure that transparency and accountability are built into all mechanisms and institutions.

He noted the much talked about tendering reforms, legislation for which is still to go before the National Assembly. Since 1997 the issue of tender and procurement reform was mooted by the government. Murray noted that the 2001 budget was silent on the progress of this issue and called on Kowlessar to explain why.

He noted the current controversy surrounding the contract to print the updated version of the Laws of Guyana as testimony to the parlous state of affairs of the Central Tender Board and the issue of procurement generally.

Dealing with the budget targets, Murray is skeptical that the economy will grow by 2.8% as projected by Kowlessar, noting that when the international and regional economy's performance was strong, Guyana did poorly with negative 0.8% growth. He said with the projection of slower economic growth in the international economy this year, and Guyana half way into 2001, he sees the target as unrealistic.

The PNC/R parliamentarian pointed out that almost 45% of the budget presentation covered the public sector investment programme and argued that whilst this appears to serve short term political ends, it marks very deep and troubling economic problems.

He cited the heavy dependence on foreign inflows to meet capital expenditure and to bridge the deficit in 2000. The capital expenditure in 2000 was $17 billion and the government received $16.6 billion in external loans and grants and $2.13 billion in HIPC relief. This year, the capital expenditure is $1.7 billion higher and external inflows are projected at $21.4 billion.

Murray expressed concern about this and not relying on revenues generated from growth initiatives to fund the public sector investment project. He cited donor fatigue, the phasing out of preferential trading arrangements and differences in interests between donors and Guyana that would work against such a dependence continuing.

He also was concerned about the perception that the poverty reduction strategy paper is being devised as a short to medium term development framework for Guyana. He contended that poverty reduction has to be a part of a wider strategy aimed at growth generation. He questioned what has happened to the National Development Strategy which was only referred to once in the budget.

He called on the government to be pragmatic and to embrace practical situations, noting that the reasons given for the rice sector's performance in 2000 was the rainfall. He said whilst this has affected the situation, it was the industry's debt burden which forced many farmers and millers out of business.

Murray underscored the need for the government to start acting and stop talking, noting that the last five budgets have been heavy on rhetoric with budget policies repeated over the years but nothing achieved to date.

Prime Minister Sam Hinds in response to Murray's assertion, said that the economic decline under the PPP/Civic government was a result of the unrest from 1997 to 2001 with declarations by the opposition PNC that it would make Guyana ungovernable and street protests.

PNC/R front-bencher Winston Murray making his presentation yesterday.