Where is the fiscal plan, Jagdeo?

Jun 08, 2024 Features / Columnists, Peeping Tom

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Kaieteur News – Vice President Bharrat Jagdeo is confused over the difference between a manifesto and a plan. While alluding to criticisms about the lack of a plan as to how the oil revenues are going to be spent, Jagdeo went off on a tangent about his government’s intentions regarding infrastructure, health and education. But these are generalities which requires a plan.

Jagdeo was at the time responding, at his weekly party press conference, to criticisms by Attorney-at-Law, Nigel Hughes. The lawyer was reported by this newspaper as saying “…there is no plan whatsoever as to how we are going to manage the economy across the board…”

If Jagdeo had only have taken the time to understand what Hughes was saying, he would have appreciated that the lawyer was specific in his criticism. Hughes added that there is no plan for development as to how much of this money we are investing to protect ourselves, how much of this money we putting into infrastructure, how much of this money we putting into education and how it is that we are protecting our investment. In other words, Hughes was referring to an absence of a medium-term or long-term fiscal plan detailing the planned use of the oil revenues.

Hughes has not been the first to make this criticism. Last year, the International Monetary Fund (IMF), recommended that the government adopt a comprehensive medium-term fiscal framework (MTFF) to ensure fiscal stability. This framework, the IMF advised, should include a clear medium-term fiscal anchor, a transition path, and an operational target. Additionally, it said the public investment management (PIM) and public financial management (PFM) frameworks should be further modernized. Periodic expenditure reviews were also advised to maintain macro-economic stability and preserve competitiveness by aligning the pace of public investment with the economy’s absorption and institutional capacity constraints.

What the IMF was recommending was that the government should implement a detailed and strategic fiscal policy plan that extends over a medium-term period to maintain and achieve fiscal stability. There are three terms which the IMF used that requires breaking down: medium-term fiscal framework (MTFF), fiscal anchor and transition path.

An MTFF is a tool for budgeting and planning that aligns government spending, revenue, and borrowing plans with its macroeconomic objectives over the medium term. It helps ensure that fiscal policy is sustainable, predictable, and supports economic stability and growth, and takes account of absorptive and institutional capacity.

A fiscal anchor is a key indicator or set of indicators (such as a target for the budget deficit, public debt level, or expenditure ceiling) that guides fiscal policy and ensures it remains on a sustainable path. This helps prevent excessive borrowing of expenditure splurging.

The transition path refers to the planned and systematic steps the government will take to move from its current fiscal position to the desired medium-term objectives outlined in the MTFF.

In the recent past, the Opposition had also raised separate concerns about the absence of a national development strategy. Jagdeo had then responded that there was a development plan, and absurdly walked into to a succeeding press conference with one of the volumes of the National Development Strategy.

That version of the NDS was developed more than 15 years ago and was never implemented. In fact, the very version that Jagdeo displayed was superseded by a civil society version headlined by Dr. Kenneth King, and which set such ridiculous and unattainable targets that it rendered the civil society version impractical.

At his press conference held last Thursday, Jagdeo opted to regurgitate generalities about what his government was doing in infrastructure, health and education, etc. But where is the plan and specifically where is the fiscal plan for the implementation of these intentions?

What Jagdeo is pointing to is no different from what is stated in his party’s manifesto. But a manifesto is not a plan.  It is merely a public declaration of a political party’s intentions, motives, or views. A manifesto needs a plan for implementation.

A manifesto is broad and contains general promises without extensive technical detail. In contrast, a plan is detailed and specific, focusing on practical steps and actions required to achieve objectives. It is the plan that breaks down the manifesto’s high-level promises into actionable items with timelines and resources needed.

The PPP/C can allay all the concerns being expressed about the absence of plan as how it intends to spend the oil billions. It can do so by producing a fiscal plan, either medium-term or long-term, as to how it will spend the oil earnings across the country.

Instead of doing so, Jagdeo goes on about the country building a world-class education system. This is the intention. But where is the fiscal plan that will tell this nation how much will be spent and on what and where it will be spent in the education sector.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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• Bharrat Jagdeo, criticisms, Manifesto, Peeping Tom, Vice President

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