The public is rarely interested in the details of budgetary explanations and analysis and for many like me, I find going through figures very tedious. But we can’t help but feel a sense of frustration at the end of the budget speech by the Minister responsible for Finance. As expected, and consistent with his first term as Finance Minister, the Budget envisaged a sense of optimism and underlined this by increasing benefits for the most vulnerable, removing burdensome taxes and increasing spending on services and infrastructure .
Much of this is based on positive economic growth this year, rather than a contraction in last year’s economy. Predictions of growth, 6 percent, from last year’s 7 percent drop, are ambitious. Guyana is still afflicted, like most countries, by the COVID-19 pandemic and will be for the rest of this year. It would retreat during the year as the vaccination program took hold. But whether the diminishing impact of the pandemic, together with investments to support the oil industry, is sufficient, remains to be seen. There was no indication whether the $ 200 million US oil reserves that Guyana has used as budget support if the Minister’s predictions fail. It is hoped that the laws relating to the Natural Resources Fund will be amended soon and this will enable the Fund to be used for specific purposes if targets are not met.
During the early period of the PPP’s terms of office the economy had slowed significantly from the euphoric growth figures that had begun during the Hoyte years (1980-1992) and continued in the Jagan presidency (1992-1997). But that success was not sustained and reliance was placed on loans and grants. Although the last APNU + AFC Government was unfortunate to face the pandemic in its last year in government, its early years were a stark reminder of the PNC’s economic history from its earlier years from the mid-1960s to the mid-1980s. It deliberately and intentionally damaged, or failed to encourage, or failed to support, the rice, sugar and agriculture sectors of the economy because PPP supporters dominated these areas; not unlike Mr Granger announced that the rice industry was privately owned, suggesting it was not a government concern. Closing four sugar estates painted the government as car-free, especially for PPP supporters.
The economy declined and taxes increased in the years that PNC and APNU + AFC were in office. The PNC did not know or care how to make the economic pie bigger. All he did was try to share the same pie. It came as no surprise to many that this time in 2015, among his first acts was to suck $ 1 billion dollars from Amerindian communities by dismissing hundreds of Amerindian workers assisting communities and abolishing the $ 10,000 for mothers of schoolchildren. He then went on to enforce a large number of taxes on business and expand the scope of VAT on a wide range of goods and services, including electricity, water and health services. Guyana’s debt increased to extraordinary shares. No one knows where the money disappeared. Spending on the productive sectors, including infrastructure, fell. The APNU + AFC learned nothing during the PNC years in opposition and nothing during the 1985-1992 Hoyte years.
Winston Jordan is one of Guyana’s leading economists. But you do not need an economist to succeed as Finance Minister, as is often announced. Hoyte was finance minister and president. He was a lawyer, like Christine Lagarde, the last very successful head of the IMF, the premier economics job in the world. Jim Yong Kim, a former head of the World Bank, was a doctor. It’s not about the qualification; the policies and commitment.
After the APNU + AFC government came into office, it participated in extensive investigations through SOCU and SARA, both newly established, the second by legislation, targeting mainly PPP officers or persons deemed to be such. There were no convictions. Some of the cases that had not started, or were not completed, were withdrawn because they were widely considered vendettas based. Mr Eusi Kwayana, in a recent letter, has called for an explanation. I wish someone would facilitate it. I have seen firsthand the lack of professionalism of SARA. Since the change in government, there have been widespread discussions of dubious financial transactions during the last government by people associated with it. No one has been charged.
The Minister did not refer to expenditure systems, particularly for procurement and contracts. That may not be its mandate but much more effort needs to be made to ensure that government spending and activities are open and public and can be monitored. The temptations will increase as our oil income increases. If the PPP fails to act, as I have written in the past, it cannot complain if doubts remain. After allegations have already been tainted by past allegations, the PPP seems to have learned its lesson and is now secretly issuing fishing licenses. The budget was great. Protecting the money he plans to spend would be even greater.