People, the ultimate beneficiaries of the 2004 budget
April 6, 2004
THE 2004 Budget has been laid in Parliament by Finance Minster Saisnarine Kowlessar. The Budget, presented under the theme "Investing for Sustained Growth and Development," amounts to $75.6Bln, an increase of 5.3 per cent from that of the previous year's. Even allowing for inflation, it is the largest allocation in real money terms ever to be spent for the benefit of the Guyanese people.
As the theme suggests, the main focus of this year's budget is on sustained economic growth and development and enhancing human development. The high importance placed on human development is reflected in the structure of the budgetary allocation, which saw the social sectors, in particular education, enjoying the biggest slice of the national pie. In the case of the education sector, Government has increased spending from 8.4 per cent of Gross Development Product (GDP) last year to 9.4 per cent this year. In terms of actual money, this translates into an increase from $12.1Bln to $14.5Bln this year.
This in indeed a noble gesture on the part of this current administration to promote human development. I know of no other country in the Caribbean that has been spending as much money as a percentage of their GDP on education. The increase in education spending is all the more significant when seen against the miserly sums spent on education under the previous People's National Congress (PNC) administration. Public expenditure on education as a share of total expenditures contracted severely during the 1980's, reaching an all-time low of 1.2 per cent of GDP in 1991.
The current People's Progressive Party/Civic (PPP/C) administration, from the day it assumed political office in October 1992, declared that education is a top national priority. This is tangibly manifested in the progressive increase in the budgetary allocations, which moved from 1.96 per cent of the national budget in 1991 to 20 per cent this year, putting Guyana ahead of most countries in the hemisphere when it comes to education expenditure as a percentage of the country's GDP.
The importance of human capital for sustainable development cannot be overemphasized. Research has shown that there is a positive correlation between education and the rate of economic development. According to the World Development Report (1991), a one-year increase in schooling in developing countries can increase wages by more than 10 per cent. An educated worker not only earns more but also contributes to a much higher level of productivity, which in turn leads to higher per capita GDP.
But education is not confined to macro-economic indicators. It also has other non-market values. Educated people are more likely to be well-informed citizens, take better care of their health and participate more actively in the governance of their societies. In the case of females, increased educational attainment correlates with lower fertility, infant and maternal rates, improved health and nutrition in addition to other behavioural and attitudinal changes.
The PPP/Civic administration must be given credit for, in very deliberate and focused ways, reconfiguring national spending in favour of human development. The end result of growth and development is to improve the material and cultural life of people and to provide for their basic needs. This is in sharp contrast to the PNC when the lion's share of the national budget was spent on the army, police, Office of the President and Foreign Affairs.
Under the PPP/C administration, the emphasis has shifted to that of human development, with education, health, housing, and water getting the greater part of the national budget. This is indeed how it should be. After all, it is people that are the ultimate beneficiaries of any growth process.
The PPP/C administration remains committed to improving the quality of life of the Guyanese people. Despite unfavourable economic conditions, both locally and internationally, the performance of the economy continues to be satisfactory. Inflation continues to be contained below 5 per cent and the exchange rate remains by and large stable.
This is exactly what is meant by "development with a human face," to which this current administration is firmly committed.