Reckless spending is a disease Guyana should cure before it creeps in

Oct 02, 2017 News

– former Petrotrin Chairman

By Abena Rockcliffe-Campbell

Former Chairman of the Petroleum Company of Trinidad and Tobago (Petrotrin), Donald Baldeosingh has warned that Guyana can shoot itself in the foot if it mismanages the revenues to be received from the oil and gas industry.
He said that while it is fact that Guyana will be earning way more than it ever has through oil and gas, wise economics is still key to sustained development. This was during an interview with this newspaper.
“The temptation is often for the state to use the money that it receives and subsidize everything else. That, in my opinion, is the mistake that Trinidad and Tobago made. So we knew we have all this money from gas and what we did was pay people to do every little thing.”
Baldeosingh noted that more than 50 percent of Trinidad and Tobago’s national budget accounts for transfers and subsidies. He said that this is way too high a percentage for the country’s own good, “it is like taking the revenue that we earning and feeding inefficient operations.”
Baldeosingh presented a case in point. “Our water company loses about 50 percent of its water through leaks; so what we did, we built two desalination plants and we are desalinating the sea water and making it into drinking water and pumping that into the system.”
“Even though we losing we are producing more so that it doesn’t matter we are losing though the leaks we are still producing enough that we can supply the population.”
Baldeosingh said that that is not the wisest course of action. “We should not be doing that; we should be fixing the leaks; we should not be desalinating the water when we have so much fresh water in Trinidad. But because we have money we could do those crazy things.”
Already, some ministers are seeing the need to guard against wasteful and lavish spending.
At least one Minister, Dominic Gaskin has noted that there is a need for Guyana to guard against “chaotic spending.”
Caribbean-Central American Action (CCAA) recently hosted a conference at the Marriott Hotel. The conference attracted a theme, “The transformational economy: perspectives and opportunities for the private sector.”
Gaskin, the Minister of Business, noted that just the single Liza-1 well could add about 15 percent to Guyana’s GDP in the first year of production. “We could see double digit growth for a number of years in a row. Whatever the numbers are, we are anticipating unprecedented levels of economic growth and there needs to be a strong commitment to a clear developmental pathway so that growth brings development and not just chaotic spending and over consumption.”
Gaskin said that that is the very reason why the government is formulating a Green State Development Strategy. He said that the strategy will guide Guyana towards the achievement of the Sustainable Development Goals set out in the 2030 Agenda for Sustainable Development.

Former Petrotrin Chairman, Donald Baldeosingh

Minister of Business, Dominic Gaskin

The Minister noted that there is currently a draft framework document in circulation that outlines the general principles and the central themes around which the strategy will be structured. He said that the strategy is supposed to be completed by the middle of 2018.
According to Minister Gaskin, the Green State Development Strategy will help Guyana to avoid the pitfalls associated with newly introduced oil revenues. He said that it will give the Guyanese people the confidence needed to make sound decisions for their long-term well-being, and it will let investors know the direction of the country and its economy. “And this last one is very important because this is precisely what we want to see happen. There are key sectors such as agriculture and agro-processing, forestry products and tourism that can make a much greater contribution to the national economy with the right investments.”

1 thoughts on “Reckless spending is a disease Guyana should cure before it creeps in”

Pam October 2, 2017 at 12:52 pm

People who are generally irresponsible and incompetent, lack the wisdom to use money wisely. One hundred dollars can grow into one thousand dollars and continue to grow into thousands of dollars if ‘spending’ is sensibly controlled and directed……..differentiating between ‘needs’ and ‘wants’ and just prioritizing. lack of maturity is also a factor in loose spending. Unfortunately, many of these people are in positions of authority in managing the country’s affairs.