The public is hardly interested in the details of budgetary explanations and analysis and for many like myself, I find going through figures to be sheer drudgery. But I could not help but feel a sense of elation at the conclusion of the budget speech by the Minister responsible for Finance. As was expected, and consistent with his first term as Minister of Finance, the Budget projected a sense of optimism and this was underlined by increasing benefits for the most vulnerable, removal of burdensome taxes and increased expenditure for services and infrastructure.
Much of this has been premised on positive growth in the economy this year, as opposed to a contraction in the economy last year. Predictions of growth, 6 percent, from a 7 percent decline last year, is ambitious. Guyana is still afflicted, like most countries, with the covid-19 pandemic and will be for the remainder of this year. It would recede during the year as the vaccination programme takes hold. But whether the decreasing impact of the pandemic, together with investments to support the oil industry, will be sufficient, is left to be seen. There was no indication whether the US$200 million oil funds that Guyana has will be utilized as budgetary support if the Minister’s predictions fall short. Hopefully the laws relating to the Natural Resources Fund will be amended soon and this will enable utilization of the Fund for specified purposes if targets are not met.
In the early period of the PPP’s terms of office the economy had slowed considerably from the euphoric growth figures which had started during the Hoyte years (1980-1992) and which continued in the Jagan presidency (1992-1997). But that success was not sustained and reliance was placed on loans and grants. While the last APNU+AFC Government was unfortunate to be faced with the pandemic in its last year in government, its early years were a distinct reminder of the PNC’s economic track record of its earlier years of the mid-1960s to mid 1980s. It shortsightedly and deliberately damaged, or failed to encourage, or failed to support, the rice, sugar and agriculture sectors of the economy because PPP supporters dominated these areas; not dissimilar to Mr. Granger announcing that the rice industry is privately owned, implying that it was not a government concern. Closing four sugar estates painted the government as uncaring, particularly to PPP supporters.
The economy declined and taxes increased in the years the PNC and APNU+AFC held office. The PNC did not know or care how to make the economic pie larger. All it did was to try to divide up the same pie. It was no surprise to many that this time around in 2015, among its first acts was to suck out $1 billion dollars from Amerindian communities by dismissing hundreds of Amerindian employees assisting communities and abolishing the $10,000 to the mothers of school children. It then proceeded over the following years to impose a large number of taxes on business and expand the coverage of VAT on a wide range of goods and services including electricity, water and health services. Guyana’s debt increased to extraordinary proportions. No one knows where the money disappeared to. Spending on the productive sectors, including infrastructure, declined. The APNU+AFC learnt nothing during the PNC years in opposition and nothing during the Hoyte years of 1985-1992.
Mr. Winston Jordan is one of Guyana’s leading economists. But an economist is not needed for success as minister of finance, as is frequently promulgated. Hoyte was minister of finance and president. He was a lawyer, like Christine Lagarde, the last very successful head of the IMF, the leading economics job in the world. Jim Yong Kim, former head of the World Bank, was a physician. It’s not the qualification that matters. It’s the policies and the commitment.
After the APNU+AFC government came to office, it engaged in wide investigations through SOCU and SARA, both newly established, the second by legislation, targeting mainly PPP officials or persons perceived to be such. There have been no convictions. Some of the cases which had not started, or were not completed, were withdrawn because they were widely seen as based on vendettas. Mr. Eusi Kwayana, in a recent letter, has called for an explanation. I wish someone would facilitate him. I have seen SAR’s lack of professionalism firsthand. Since the change in government, there have been widespread exposures of questionable financial transactions during the last government by persons associated with it. No one has been charged.
The Minister made no reference systems in expenditure, especially for procurement and contracts. Maybe it’s not his mandate but much more effort needs to be undertaken to ensure that government’s expenditure and activities are open and public and capable of being monitored. The temptations will increase as our oil income increases. If the PPP fails to take action, as I have written in the past, it cannot complain if suspicions remain. Having had it reputation already tarnished by past allegations, the PPP seems not to have learnt its lesson and now grants fishing licences in secret. The budget was great. Protecting the funds it proposes to spend would be even greater.