Budget 2022 is $476,000 debt for each Guyanese family — Shadow Finance Min.

Feb 03, 2022 News

Kaieteur News – Budget 2022 represents a debt burden of $476,000 on the shoulders of each Guyanese family even as $600,000 per family is being withdrawn from the Natural Resources Fund (NRF), and as such has been given a failing grade by the Opposition over several missed targets.

Shadow Finance Minister, Juretha Fernandes adding her voice to the 2022 budget debates yesterday.

This was revealed as day three of the Budget Debates on the $553B Estimates of Expenditure for this year escalated yesterday in the Dome of the Arthur Chung Conference Centre (ACCC), when opposition Shadow Finance Minister, Juretha Fernandes gave the document a failing grade for a third time.
This conclusion, according to Fernandes, was made based on Dr. Ashni Singh’s own admission that for the third straight budget cycle, government has failed to meet any of its targets with regards the non-oil economy of Guyana.
She sought to impress on the House that none of the targets promised by Dr. Singh—Minister within the Office of the President with responsibility for Finance—in relation to economic growth rates, sectoral performance or inflation.
According to Fernandes, her conclusion of a failing ‘F’ grade is not her own but Dr. Singh’s own admission.
To this end, she reminded that Dr. Singh in his Budget presentation delivered a report of total failure when he “reported that the 2021 non-oil GDP (Gross Domestic Product) growth was an anaemic 4.6 percent after a projection of 6.1 percent and after suffering a contraction of 7.3 percent in 2020.”
Qualifying her position further, Fernandes reminded the National Assembly that the Minister for this year now gives a projected growth for 2022 at 7.7 percent and again, “I project an epic failure to meet that target this year.”
Significant Failure
Breaking down the figures into context, she explained, while gesticulating to government member, Minister Kwame McCoy that, “the PPP/C continues to fail at economic policies to sustain or grow the non-oil economy, and thanks to their failure, the non-oil economy today is still smaller than the non-oil economy of 2019.”
Even as Fernandes noted that the country has witnessed the PPP/C miss two GDP growth targets in two years, she posited, “not only have they missed every growth target set since they came to office but they have missed both by miles.”
She expounded further by saying that in 2020, the Minister projected the GDP would contract by between 1.4 percent and 4.3 percent.
When presenting the 2021 budget, however, “he reported that the economy actually contracted by 7.3 percent.”
Fernandes reminded, “…with that failure on his record, he then projected GDP growth of 6.1 percent in 2021…6.1 percent was a very modest sum which fully took into account the reality of COVID-19 and the current oil boom Guyana is going through. But modest as it might have been, it was clearly not modest enough to overcome the legendary incompetence of the PPP/C.”
To this end, she reminded that Dr. Singh last week reported that instead of the 6.1 percent projected growth, Guyana had recorded a GDP growth rate of only 4.6 percent.
With this in mind, she said, “with another significant failure on his record, he then proceeded to project that 2022 would see a GDP growth rate of 7.7 percent.”
According to Fernandes, “I’m willing to take any bet that the PPP/C is going for the hat-trick of 3 failed GDP growth targets in a row.”
She posited for the sake of argument “that they somehow get their act together and finally deliver on a promise, let’s say the economy actually grew by 7.7 percent in 2022, as unlikely as it is, that would amount to an average GDP growth of 1.47 percent over the three budgets executed by the PPP/C”.
Inflation
On the matter of inflation, Fernandes lamented, “they stand here and talk about transformation” but this obtains in light of another litany of failings as it relates to containing the country’s inflation rate.
To this, she noted that last year Dr. Singh projected that inflation would have been contained at 1.6 percent.
This did not obtain however, as reported by Dr. Singh himself, inflation rate in 2021 was in fact recorded at 5.7 percent.
This, she recognised “is over three and a half times his announced target; and that projection was made in light of the COVID pandemic.”
According to Fernandes, “I pause and wonder how a government could be so utterly incapable of hitting a single one of the targets they set.”
Putting the figures into context, the opposition Shadow Finance spokesperson reiterated, “when this budgetary period ends, the PPP/C would have presided over a total inflation rate of over 11 percent in just two and a half years.”
Breaking it down further, Fernandes said it represents a cost of living increase of $11,000 on a $100,000 budget and questioned, “where would the average worker and pensioner find the money to meet this spike in living cost?”
According to Fernandes, “in the biggest budget ever, a budget that drains the Natural Resources Fund, the pensioners will receive an increase of $3000; that is the relief that this uncaring administration offers, when by their own projection they would have presided over an inflation of 11 percent since they assumed office.”
Referencing the criticisms on the part of the government, Fernandes quipped, “these are the people that want to scold us on management of the economy, what a joke! Their own report reeks of economic mismanagement.”
Compounding the situation, Fernandes drew reference to the fact that outside of the oil sector, there has been an abysmal failure in the performance of key sectors such as Agriculture, Forestry and Fishing.
That sector, she observed, contracted by 9.1 percent in 2021 and “this comes after he had estimated that sector to expand by 5.6 percent in his previous budget presentation.”
With regards the failure on the part of meeting the targets in the Agricultural sector Fernandes noted, Dr. Singh “now is trying to blame their failure on the floods.”
To this end, she responded by saying, “we did our homework and we can tell this nation that when you look at the GuySuCo report, you will recognise that the highest yield achieved was 5.63 tonnes of sugar per hectares.”
Debt Burden
As such, “even if we are to take into consideration the lost from the flood, we will still be left with a resounding ‘F’ in this department as well.”
According to Fernandes, Budget 2022 “rips through the very soul of this nation, a nation that was hopeful. This hope is now lost.”
Further compounding the situation, Fernandes posited, “this abomination, which the PPP/C calls a budget, lays out a plan to add a further debt burden of $100 billion while emptying the Natural Resource Fund of $126 billion.”
She expanded saying, “let me put that into context for the Guyanese people, the PPP/C has outlined a plan to place a debt burden of $476,000 on the shoulders of every Guyanese family while they also withdraw the $600,000 per family that was saved in the Natural Resource Fund (NRF).”
This, she said, represents $1,076,000 per Guyanese family or $90,000 per month for every Guyanese family.
According to Fernandes, that money was more than enough to immediately end extreme poverty in Guyana and make hunger and homelessness a distant memory for the countless thousands of Guyanese who struggle in the depths of extreme poverty.
“Yet, you can search for the next year and you will find nothing in this 2022 budget – the first budget to use all the oil revenues – to end extreme poverty.”
To this end, she concluded, after this budget – the biggest budget ever of $552.9 billion, the first budget to use all of the oil revenue, after it would have been fully implemented at the end of this year, “there will still be a plastic city in Region 3.
There will still be families struggling in Tiger Bay. There will still be children begging on the streets. There will still be homeless people sleeping on every road corner of our city. After the biggest budget ever, and the first budget to utilise our oil revenues, Guyanese will still be struggling to survive.”
Trickledown Economics
She was adamant that with Budget 2022, “poverty, the lack of basic human needs, will continue to plague our most vulnerable under this careless, heartless, immoral, inhumane budget.”
Fernandes insisted too that single mothers struggling to provide for their families, pensioners who are no longer able to work, the sick and the disabled, these are the people who make up the bulk of those who suffer in extreme poverty in this country and “this budget does absolutely nothing to raise the standard of living of those persons.”
To this end, she questioned, “is it too much to ask that, in a country set to have the third highest oil production per person when the Liza Unity comes online in a few weeks, that this 2022 budget should have outlined a plan to end childhood hunger? Is it too much to ask that there be a plan to get thousands of children living in the squalor of squatting areas be provided with emergency housing? Is it too much to ask that our pensioners be given enough money to have at least three healthy meals a day?”
According to Fernandes, the government of the day is least concerned about those people and those issues, “they are more concerned with projects and programmes that will yield the biggest kickbacks.”
The PPP/C, she said, “seems to be filled with two extremes, on one hand, they have people that don’t care and on the other hand, they have people that don’t understand; so in essence, they are a group in which the wicked and corrupt is leading the blind.”
According to Fernandes, if the PPP/C was accurate for once in their life, they would have named budget 2022, “trickledown economics again, we promise it will work this time.”