The Budgets of Jagdeo and Jordan have a lot in common

Nov 28, 2018 Features / Columnists, Peeping Tom

When you are in Opposition, you are at a disadvantage in criticizing the Budget because you do not have access to all the data necessary for a complete analysis.
But the Opposition can offset that liability. It has had no input into the preparation of the Budget and therefore it does not have the burden of defending it; it can make heavy weather of the measures which the government has announced.
This year, the Opposition does not have a difficult task. The Budget is tailor made to be ripped apart at the seams. It was a lengthy Budget speech but was short in terms of answering the fundamental issues relating to the management of the economy, and preparation for first oil.
In fairness to the Minister of Finance he was at a major disadvantage because the Green State Development Strategy is buried in slothful consultations. By the time it digs itself out of that quagmire, it would have to be updated to cater for the numerous changes which have taken place since it was first conceptualized.
The government also does not have a renewable energy strategy and this makes the Minister’s job even more difficult.
As such, on major issues such as the environment and energy, the Budget consists of patchwork of measures. This represents a major challenge for other sectors since, for example, without cheap energy, manufacturing simply cannot take-off. Without a green development plan, the government will lack the basis of properly incentivize tourism.
Budget 2019 resembles the many Budgets under former President Jagdeo. It is Budget of crunched numbers and collaged measures lacking any coherence, direction and focus.
The Minister was of course very familiar with those PPPC Budgets since he would have had a hand in their development and even used to appear on television to explain the Budget.
He therefore ought not to have fallen into the practice of producing Jagdeo-like Budgets. He should have avoided those same missteps.
Like the Budgets under the PPPC, the 2019 Budget is not part of any major developmental strategy. It is balancing act of trying to please a number of stakeholders without offending too many constituents.
Were there a renewable energy plan, the Minister could have said that in 2019 the announced measures were intended to achieve certain aspects of that plan. But instead what we have are initiatives thrown in for good measure with only minimal impact on overall renewable energy development.
It is a problem of planning. The Minister should have a target and to say that in 2018 the Budget will ensure that so many kilowatts or in whatever unit it is measured, will be generated using renewable energy and it will save the economy X dollars and reduce foreign exchange usage by Y dollars. Instead what we have is talk about piloting an electric car? How much is that going to impact on renewable energy?
It is the same rigmarole with taxation. Each year we read about increasing the threshold and reducing taxes. A comprehensive tax bill is needed which treats with major tax concerns. This patchwork approach to tax reform simply will not suffice as Guyana prepares for first oil.
The Minister is fully aware that Guyana does not have the absorptive capacity to spend the oil revenues which will come our way from 2020. As such, the past few years should have been devoted to building that capacity.
But not much of that is happening and one has to ask what is going to happen to the oil revenues? Will the revenues be parked in the Sovereign Wealth Fund in the same way as the G$30b which was supposed to be used to put the sugar corporation in a state of readiness for privatization?
The communities which depend on the sugar industry have been devastated by the dismissals of almost 5,000 sugar workers. The sugar workers have not received an increase since the APNU/AFC came into office. Even their severance to which they were entitled was doled out in piecemeal fashion.
Admittedly, the industry with which they work is undergoing a crisis and is suffering losses. But are these workers any less productive and efficient at what they do than public servants who chalk up an increase each year without any way of measuring whether their performance on the job is ‘loss-making’?
Even if the government feels that the sugar workers do not deserve an increase what about the social costs caused by the retrenchment within the industry? Why were there no measures aimed at stimulating the rural economy so as to be able to absorb the large numbers of dismissed workers?

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The Budgets of Jagdeo and Jordan have a lot in common

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