Slash and burn

I listened intently to a television discussion last Sunday on Channel 28 sponsored through the auspices of the USAID LEAD Programme. The participants were Messrs Khemraj Ramjattan, leader of the AFC and Carl Greenidge, the finance spokesperson for APNU. Even for a jaded ex-politician like me, the discussion was extremely interesting. Both men spoke about their parties’ approaches to the Budget Estimates and the reasoning underlying any disapprovals they may apply. While both were equally articulate, Carl Greenidge offered the theoretical basis on which he expected the Budget to be constructed. As one of Guyana’s ablest and most experienced economists who has himself spent seven years in the hot seat as Minister of Finance, with vast international economic experience, his explanations were informative. It was a pity that the government did not participate.

At the same time, few in Guyana could have matched the competence, articulation and argumentation of Minister Ashni Singh in presenting the 2014 Budget and defending the Estimates. Since his first hesitant steps as Minister of Finance, he has grown into an assured professional with a firm grasp of his portfolio and a masterfulso140112ralph capacity to defend it. The television programme would have been an even more elevated discussion if it had involved Minister Singh. He may not have attended because the government objects to the LEAD Programme. To be deprived of listening to Minister Singh in such a setting, responding to a greater depth and higher standard of discourse than the cut and thrust in the National Assembly, was very disappointing.

All of this being said, the disapprovals by the opposition of the Estimates did not fit into the construct explained by Mr Greenidge. They appeared to consist of more slash and burn tactics, based not on high principle, but on political expediency. The disapproval of the Amerindian Fund, for example, was based on the suspicion, not evidence, that it was used for political purposes by the government. But I would have thought that when considering ‘disapprovals,’ to use the word forced upon us by the court decision, the opposition would have considered a higher principle which has not been sufficiently articulated and given enough prominence in targeted discourse by government spokespersons, even by Minister Singh.

It is that Guyana’s economy is on the move. This has been set out in the Budget speech and by various international bodies and persons, including the President of the Caribbean Development Bank on a recent visit to Guyana. A consistent growth rate of five per cent, more or less, and low inflation figures, need to be nurtured. Government spending on clearly beneficial projects such as the Specialty Hospital, the Airport, tourism and general infrastructure, hydroelectricity and others, whereby money is fed into the economy, helps along the development process and increases economic activity once inflation is being contained as is now the case. It creates or maintains employment which the opposition has severely criticized the Budget Estimates for not doing. Well, the opposition cannot argue from both sides of its mouth accusing the government of doing nothing to create employment and disapproving of major projects at the same time.

The Minister of Finance outlined the challenges faced by the economy. He announced that foreign direct investment and exports are both down. Investors look at the political climate, and what happens to the Budget is one factor, before deciding whether to invest. The sugar industry needs revitalizing and capital infusion to restore export volume. The tourist industry can do with all the help it can get. While the gold price is down the use of mercury has to be gradually curtailed in keeping with international prescriptions, which might well affect production.

Administrative capacity is needed to keep the governmental apparatus turning over and infrastructure development is necessary to increase efficiency of both the productive and service sectors. The rationale for the opposition disapprovals, based on suspicions and allegations, are not enough grounds to reduce the sums for whole items of the Budget even if difficulties are found with them. Where corruption, extravagance, wastage or political use of funds are suspected, other legislative mechanisms must be deployed to deal with them, not the haphazard and unsystematic slashing of the Budget Estimates. The opposition has the creative imagination to legislate checks and balances and if they do not attract the President’s assent, they can go to the public or the electorate.


The opposition has indeed argued that relief should be brought to the population by higher old age pensions, higher wages and salaries to public servants, more expenditure on training, more effort to create employment, increase of the income tax threshold and more. These are admirable and justifiable. But they can only go up if economic growth is encouraged and increased while maintaining economic and political stability and government’s budgetary support. There is no other way. And it is certainly not possible if the government were to reduce the VAT. The government cannot be expected to reduce its income and increase its expenditure at the same time. This argument is therefore not scientifically credible, but of course it is politically popular.

If Guyana has to endure another two-and-a-half years of this political gridlock, a frustrated population may well have something to say about it at the appropriate time.

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