Budget does little to help to promote investment, provide jobs
Stabroek News
March 21, 2002

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Dear Editor,

Examining the reports on the PPP/C 2002 Budget, it was most unfortunate to read of the high level of disinterest by members of Parliament who snoozed, as a colleague made a statement on how the economy is expected to perform in the future. If Ministers of Government cannot keep their focus for a few hours on an important national event, could anyone blame the man-in-the- street for his pessimism and his rush for an exit visa? This is an embarrassment on government when your appointed representatives 'sleep on you program'. Perhaps the opposition did the honorable thing when they left.

I noticed also that the Office of the Prime Minister received no budgetary allocation in 2002. Yet the Prime Minister is responsible for several critical sectors, including energy and mining, among others. Where is his technical team and what really is his responsibility? Without a support staff, a work-plan and evaluation parameters, how could the Prime Minister get his work done? Could the failure to allocate resources to this constitutional office be justified? I hope it is a reporter's error and not anything else.

A large hole- a deficit of G$15.2 billion - is projected in the Budget. This is one of the more troubling issues facing Guyana, for revenue collection is not keeping pace with expenditures that are being allocated to several White-Elephants in a rising tide of corruption, poor tendering and lax procurement procedures. Lean and clean are long gone, leaving a hill of broken promises.

Domestic and overseas borrowing, according to the Minister, should finance the deficit, presumably from international donors, including perhaps the IMF, the World Bank, among others. Are these donors getting value for money? Are they not concerned about waste and inefficiency?

A second concern of the deficit is its link to the national debt and its growth. In the budget report by Ram and Mc Rae on the national debt, additional work should be undertaken to correct the record, as we often hear of the US$2.1 billion debt that the PNC government accumulated over 28 years. Yet reports are scarce on the speed with which the PPP/C/TUF government has accumulated a total of at least US$ 700.3 million in new domestic debt and foreign debt (US$600 million in new foreign debt and US$166.3 million in domestic debt) in ten years.

Moreover, there is no doubt that the international donors have been very generous and they are set to extend additional financing again this year, without the requisite care and accountability from government. I hope Ram and Mc Rae, the Accountant General and the Auditor General can follow up on the debt problem by providing a listing of the debt under the PNC and the PPP/C/TUF. Building the same road or seawall twice within ten years, cannot be viewed as development and therefore tracing where these funds have been spent is the best thing these agencies can do for Guyana at this time.

On investment, the Minister snoozed, calling on the opposition to be politically docile so that business can flourish, but fixing the investment code and streamlining the activities of Go-Invest were by-passed. Besides, projecting economic growth of 2 percent in 2002 could be very optimistic, given the current difficulties local companies are facing with declining demand and serious credit and repayment problems.

The $l.6 billion was for the Caricom Secretariat, the funding for which was noit stated, not the unemployment programme. The Minister also snoozed on the idea of when the financial sector will once again have access to long-term credit. This must be a mistake, along with the announcing of a short-term plan to employ 300 to 400 workers when the unemployment rate is in the tens of thousands. What criteria were used and what were and are they doing at a cost of G$4.0 million per worker, with no justification, work plan or evaluation procedures identified? Taxpayers need to know, so too the public service unions, who were again treated as insignificant, being 'clout-less' and no match for the sugar unions.

Incidentally, sugar and bauxite receive budgetary allocations of US$7 and US$8 million each. The allocation to bauxite is a loan with apparently no terms and conditions specified in the budget; and no information is provided on the allocation to sugar, so it is not known if it is a grant, a loan, additional equity or a combination of these options. A comparison of these two allocations should be made to clarify the strategy being adopted.

Much more could be said on this year's budget, but why bother? It makes no difference in a system that is only responsive to securing debt relief, with no concern for attracting new investment, or creating private sector jobs and encouraging real growth. Anyway, let me leave you with an interesting event from the 2001 budget debate. A Member of Parliament who after making his budget presentation said he needed to sleep and promptly took his seat. This caused much laughter; but make no mistake, this man is a visionary!

Yours faithfully,

Dr. C. Kenrick Hunte

Editor's note

Parliamentarians sleep in parliament throughout the world, even while it is being televised. This may be due to the fact that they have had a hard night or that some speakers, especially if they go on for a while, induce sleep. A long budget speech at the best of times is somewhat tedious.

There was no allocation for capital expenditure for the Office of the Prime Minister. The allocation for current expenditure was $42 million, down from $l05 million. This was apparently due to some restructuring with some agencies being taken out of this portfolio.

The l.6 billion was allocated for the Caricom Secretariat not the unemployment programme.

It was not made clear if the allocation for the sugar industry was to be a loan or a grant or additional equity.