The earlier the Budget, the worse it gets!

Aug 02, 2018 Letters

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DEAR EDITOR,
The former President of the USA, Barack Obama, had said that, ‘A budget is more than just a series of numbers on a page; it is an embodiment of our values’. I guess ‘values’ will also include where we want to see ourselves in the year ahead.
Unfortunately, our Budgets in Guyana for the past three years failed dismally to take our country forward in terms of economic growth and development. The Budgets are just a series of trials and errors and complete failures in some cases.
This Coalition seems to be obsessed with early Budgets and the Finance Minister has already informed us that this year’s Budget will be the earliest. Every year the economic performance gets worse and the Budget does nothing to stem this downward decline, so in this case, the cliché of ‘the early bird catches the worm’ is clearly inapplicable.
This early preparation of the Budget is fraught with uncertainties and guesswork, since it is done under conditions of severe revenue and expenditure uncertainty, as well as weak expenditure control, which have resulted in frequent changes in ceilings and appropriations.
We have seen that economic growth was 3.2% in 2015 and this was moved down downward to 2.1% in 2017 and it was projected in the 2017 Bank of Guyana Report to reach 1.5% in 2018. We have seen that forecasts are repeatedly revised, and this is because as Dr Jagdeo puts it, the Finance Ministry needs actual figures to work with and these are seriously lacking. Even the allocation of resources in the budget presents a serious disability.
When we look at the specifics we can discern that adult unemployment rate increased by 12%. It is the role of central government to create opportunities for gainful employment and this must be done through the Budget. But instead, we have seen that the Government’s brainless economic policies have catapulted more than 7,000 persons into the ranks of the unemployed and impoverished. It is estimated that 40% of our people live below the poverty line.
We have also witnessed a deteriorating health sector with a multitude of complaints, including widespread and frequent shortages of basic supplies of medications at health centres and public hospitals. This has further impoverished the people, since they have to find additional monies to buy medication.
This situation is compounded by long waiting lines and non-functioning medical equipment at hospitals and health centres.
In 2018, the Public Health Budget increased by $3.4 billion to $32.6 billion, but a decrease in value for money through poor implementation.
We have also witnessed the deterioration of public security and safety, with the news headlines being replete with reports of murder, robbery and other crimes. This is despite more monies being expended in the Public Security Ministry. The Budget increased by $1.3 billion to $34 billion. Again poor implementation.
On the other hand, the Agriculture Sector, which employs 21% of the Country’s workforce, has its Budget slashed by more than $1 billion to a paltry sum of $19 billion!
Since 2015, the Government has been cutting the budgetary allocations for Agriculture, and it is evident that the performance of this sector has been progressively declining. This year even the rice sector is projected to do badly since the dams in the cultivated areas are impassable. This is sheer short-sightedness!
In this same vein, the Public Infrastructure Budget was cut by $3.4 billion to $40 billion. Public infrastructure is vitally important to improve our economy and our quality of life.
In 2017, also, the capital expenditure budget was slashed by 20%. This has severely impacted on investment in the sector, resulting in accelerating the downward slide of the economy. This has exacerbated the unemployment crisis. More short-sightedness!
Thus there is clearly a disconnection between policies and expenditure. There needs to be a strengthening of the linkages between policy formulation and expenditure. The Budget must take into account the macroeconomic realities; if not, it can result in the continued poor economic planning which has manifested in the past three years.
Clearly there has been little effort by the Coalition Government to make budgetary allocations to increase production and productivity and to foster economic development. The treatment of the sugar industry is a prime example. Over 5,000 workers were heartlessly dismissed, no redundancy monies were budgeted for, and no alternative employment was provided. And to add insult to injury, until now, all the workers have not received their full severance pay. However, the wastage on pomp, celebration, pageantry and the ballooning excesses on the military will pave the way for the economy’s downward decline. This is definitely the worse economic planning by any government ever.
Therefore, the haste by this Government to prepare and present early budgets has failed to make evident the competence of this Government. I wish to agree with the Leader of the Opposition, Dr Jagdeo that this Government has learnt nothing from the past! Will it ever?
Yours sincerely,
Haseef Yusuf
RDC Councilor-Region 6

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