Government borrowing a burden on taxpayer
-PNCR
Stabroek News
April 2, 2004
The PNCR says the government will spend $25.9B more in 2004 than it collects in revenue thus placing a heavy debt burden on Guyanese.
At its weekly press conference yesterday, MP Deborah Backer read a statement in which she gave the party's position on the National Budget.
She noted that the government has already borrowed more than US$800M or $160B. Meanwhile, the PNCR is to hold a public forum on Monday during which it intends to give its analysis of the National Budget, laid before the National Assembly this week. The event's main speaker is the party's Shadow Minister of Finance and Economic Development, Winston Murray and is scheduled to start at 4.30 pm in the auditorium of the National Library.
The PNCR said that while the expenditure announced for the social sectors is welcome, it should be clearly understood that under the Heavily Indebted Poor Countries (HIPC) arrangements there are specific identified percentage targets for expenditure in health and education - meaning that the level of allocation for these sectors is based on conditions of the International Financial Institutions (IFIs).
The party said that added to this is the fact that many projects are executed with "substandard specification, substandard material and in some cases no material at all," yet the full sums for the projects are disbursed. "But that debt has to be paid by the people of Guyana."
Backer said that notwithstanding the most positive utterances by government ministers, there is but a trickle of private investment to Guyana, "compared with the vastness of our resource base and our immense potential for economic growth."
She added that within the Caribbean "we are consistently lagging behind in economic development and, at the wider international level, serious and large investors are not looking in the direction of Guyana."
She also noted that every year in the lead up to the National Budget the "ritual of consultations" takes place with stakeholders, including the private sector organisations and this is usually trumpeted as an act of achievement even though few of those suggestions are incorporated in the budget.
She said the government must give up its appetite for control and leverage. "It must also remove the red tape and bureaucracy that [stifle] the effort to bring any investment on stream," Backer said.
She said that many foreign nationals and Guyanese expatriates recall the horrors of trying to bring investments to fruition. "The abysmal failure to pursue serious and focused policies with a commitment to attract private sector investment denies Guyana an exit strategy from the Structural Adjustment Programmes."
She said too that what was disheartening is that the government attempts to conceal its failure by touting the condition of the country as sound. "It is a fad in government circles to speak of the soundness of our macro-economic fundamentals such as inflation, monetary aggregates, reserves and exchange rate, but the government needs to be reminded that in a stagnant or contracting economy it is of little relevance."
She noted that in two of the last four years the economy contracted and over the four-year period grew an average of 0.4% per annum, noting also that last year the economy contracted by 0.6%. She said that this occurred when in 2003 world output expanded by 2.5% and world trade increased by 4.7%. "We submit that a projection of 2.5% real growth in GDP for 2004 (as stated in the budget) is most unrealistic," she said.
"When one looks at the overall picture one sees a country with no or low economic growth, borrowing heavily to sustain some level of programmed activity, largely in the infrastructure and social areas while very little is being demonstrated by way of vision-based policies to put the economy back on a sustained path of strong economic growth. This position is untenable in the medium term," Backer said.