Ramotar defends Government borrowing

Feb 21, 2009 News

…as PNCR Chief Whip dismisses budget as visionless

By Gary Eleazar

People’s Progressive Party’s General Secretary, Donald Ramotar, in his presentation to the National Assembly yesterday, told the House that the conditions in Guyana did not warrant a stimulus package, commonly called a financial bailout.

Local banks were not collapsing, persons were not losing their homes and jobs, and businesses were not shutting shop. As such the provisions in the budget will suffice.

Ramotar sought to remind the House that the 2009 budget was crafted in an environment where the countries that primarily fuelled the global economy have been adversely affected by the Global Financial Crisis and Guyana has remained relatively stable.

“In the context of the global environment we are not doing as bad as the opposition would make it out to be.”

He said that the global environment worsened to the point where there is social unrest in many countries, even to the point where xenophobia has once again gripped nations, in that there are rebellions against companies hiring foreigners.

On the local front, Ramotar pointed to stringent management of the financial system which has to some extent allowed the country to be spared the pitfalls gripping so many others. “We are not immune; we still face challenges.”

As it relates to the continued pessimistic perception of an impossible projection of GDP (Gross Domestic Product) growth, Ramotar told the House that it was based on facts. He emphasised that the economy has performed well ever since the party took office in 1992.

He also defended the borrowing by the Government. The Opposition charged that the government was consistently borrowing money, thus increasing the national debt.

Ramotar reminded the House that when his party took office the national debt was in excess of US$2B, and to date that figure has plummeted to below US$1B, which represented monies paid back with the assistance of some debt write-offs.

“Nothing is wrong with borrowing money to grow the economy… The money we are borrowing is to create conditions to generate wealth… We have been building the capital base for the country.”

He said also that the Opposition was cleverly using the Value Added Tax as a political football by misrepresenting the situation.

Ramotar told the House that in the past the consumption tax of 30 per cent was not illustrated as prominently as the 16 per cent VAT, and it is because persons could more easily monitor this tax that it will be used.

The real situation was the fact that VAT was one of the largest tax cuts in history, which allowed persons more disposable income to spend, and any apparent windfall that appears simply represents the fact that more persons were now willing to comply with the tax laws, given that it was lowered.

Ramotar also sought to dispel what he called a notion that the government did not care for the elderly, given that the pension was only $6,300. He said that while the government would like to pay more it was a matter of affordability, adding that in 1992 the amount allocated for that purpose was 0.6 per cent of total revenues while at present it is 4.3 per cent of revenues.

He told the House that one particular difference between the actions of the PNCR and the PPP/C was the fact that the current administration prioritised its spending, citing as an example that, whilst in the PNC era its foreign affairs ministry was in receipt of billions, health and education received meagre allocations.

PNCR Chief Whip, Lance Carberry, who closed the arguments on the debate for the PNCR, told the House that he was impressed by Dr Ashni Singh’s masterful display “of the linguistic and presentational skills of the illusionist, or would it be more appropriate to say conjuror… He demonstrated that it is possible to intelligently say a lot about very little.”

According to Carberry, an analysis of the merits of the 2009 Budget, as is the case of the previous year’s Budget, must be within the context of a known and explicitly articulated framework for the development of Guyana.

“No such framework has been presented to this National Assembly, though we have been told by several members of the Administration, including the Minister of Finance several times during this debate, that the activities undertaken are consistent with the PPP Manifesto for the 2006 Elections.”

Carberry reminded the House that his party had tabled a motion requiring the National Assembly to accept the National Development Strategy and the measures and policies therein as an overarching strategy for pursuing the economic and social transformation of Guyana.

That motion was defeated through the use of the Government majority.

Carberry added that the bristling of the administration as it relates to the suggestions that they seek the help of local and regional experts in the context of the meaningful involvement of all major stakeholders must be noted.

This think-tank that has been suggested by the party is aimed at analysing the local situation and recommend remedies that would place the economy on a path of growth and development.

He also sought to point out instances of bad governance that must be addressed by the administration, such as the manipulation of the Regional Democratic system through the misuse and abuse of the office of the REO; the nepotistic issuing of contracts and the attitude of the executive towards accountability and oversight by the National Assembly; the apparent misuse of the Disciplined Forces to violate the rights of citizens, for example, the failure to condemn the use of torture against citizens and the blatant undermining of the rule of law; and the continuing violations of the Constitution, among others.

“I, and I suppose others who are not jaundiced PPP supporters, have come to recognise that whenever the sensitive underbelly of discrimination, marginalisation, and the now endemic corruption as practised under this PPP administration is brought convincingly to the notice of the Guyanese people, the government instinctively resorts to a vicious, vituperative propaganda attack, by employing the well honed and willing skills of their known house slaves, and/or hired character slayers and/or spinners, who treat truth as an optional extra.”