Dear Editor,
Whatever small benefits that the 2017 Budget promises to bring to hard pressed Guyanese consumers will in all certainty be completely wiped off by the new taxation and fiscal measures announced by Finance Minister Winston Jordan in his budget presentation to the National Assembly.
The main triggers for this inevitable increase in the cost of living will be the application of Value Added Tax (VAT) on water and electricity which are unavoidable inputs to the production and manufacturing sector. This increased production will be passed on to consumers by way of higher mark-ups and a consequential increase in the overall cost of living.
The situation is further compounded by the removal of a wide range of zero rated items which will result in a further increase in the cost of living.
But the most worrying aspect of the budget presentation was the acknowledgment by the Finance Minister that there was a contraction in the anticipated growth of the economy by over two per cent, which is a departure from the growth trajectory under the previous PPP/C administration where the economy registered an average growth rate of five per cent for nine consecutive years. And while the 2017 budget is strong on increasing revenues through a plethora of taxation measures, it is severely deficient on putting in place an incentive regime to stimulate the economy and create jobs for the growing army of unemployed as well as the underemployed.
My fear is that if this trend of contraction of the economy is not halted, it could lead to an increase in the level of poverty, growing unemployment and the concomitant adverse impact on crime, prostitution and other forms of social pathology.
A growing economy is the foundation for prosperity and any downward trend must be a matter of grave concern not only for policy-makers but for citizens as a whole.
It is perhaps a good idea for the administration to convene a bipartisan task force on the economy which should include representatives from the private sector, the academic community and a wide cross-section of civil society with a view to generating new and innovative ideas on how to grow the economy in an accelerated and sustainable manner.
Yours faithfully,
Hydar Ally
