Early Appeal

As Guyanese were coming to the endof the Lenten Season, they were presented with a new fiscal offering from the newly constituted Donald Ramotaradministration.  President Ramotar’sadministration got its first opportunity to present its budget to the Nation and, in effect,an opportunity to concretize its new and fledgling relationship with the country.  Having earned the right to do so on November 28 last year, the administration has chosen to use the budget to communicate its vision to the country and make an early appeal for the sympathy and support of Guyanese.  For example, with its tax concessions, increase in public transfers, promise of jobs and financial offerings to the small business community, the administration has attemptedto raise the hopes and aspirations of Guyanese while seeking to appear confident and compassionate.  There is no doubt in the minds of Guyanese who is in control of the country.  But, their decision at the polls last year suggests that they were looking for something different from the new administration.

What they got instead was the declared intention of the new administrationunder the theme “Remaining on Course, United in Purpose, Prosperity for All”to change nothing.  Without giving up much, the budget exhorts everyone to accept the feel-good vision which informs the estimates, butthat debate, commentary and analysis have begun to reveal do not place Guyanese at the center of attention.  It is legitimate to wonder then if the budget will do enough to wipe away the reservations that the majority of Guyanese have about the economic and social direction of the country.

Ardent Critics

Even the most ardent critics would concede that the vision espoused for the country in the budget is admirable.  Wanting Guyana to be a place where every Guyanese has an equal chance at success is highly commendable, as is the desire to make it a place where those who want to invest and live will find an enabling and responsive environment.  The nation has been talking long and hard about improving productivity and competitiveness.  These two goals do deserve to be pursued for the increase in wealth and strength that they could engender.  Guyana has also been talking about achieving the long-term sustainability of the environment.  Equally significant is that vision of a country where the quality of the social and other services are efficiently performed and are readily available.  Guyana is not there yet, but it is good to feel that the constant advocacy for a better Guyana finally might be paining the ear drums of policymakers.

No Guarantee

Reaching the goals mentioned above is premised on several factors, but the most important are centering development on the people of Guyana and placing trust in public accountability.  In pursuing its vision expressed in the budget, the administration expects Guyanese to place faith in the institutions of state, especially on matters of safety, security and justice.The areas of security and justice, for example, still do not give Guyanese a feeling of comfort or satisfaction.  An important policy document like the budget ought to contain convincing evidence that the administration will play its part, and will not spend money propping up unprofessional conduct that offers Guyanese no guarantee that they would not be the next victim of criminal activity of the police or an unfair judicial decision.  There is no evidence in the budget that no effort will be spared to upgrade rapidly the important human assets of the security forces.  Unable to afford personal security services, Guyanese must feel safe from both police and thief.Police must be constantly trained to deal with the public and given the proper incentives to do so.  The budget is not convincing Guyanese that they would easily be able to separate their law enforcement personnel into one category only.

Confidence of the Public

The issue of public accountability includes enjoying the confidence of the public.  With a plan to spend G$192 billion this year, and the poor judgment displayed already on important public works, there should be some effort to elevate the confidence of the public.  A commitment to ensure that the Public Procurement Commission (PPC) was set up would have gone a long way towards lifting the Guyanese public’s confidence.  Reference has been made to other Commissions, but not the one that has created angst and given grief to the vast majority of Guyanese.  The budget recognizes these important needs but underestimates the government’s obligation in this arrangement.  The sentiments of the budget might be sincere, but the numbers are unkind.  The administration has requested an increase of nearly G$39 billion for central government of which less than 10 percent will be given directly to Guyanese.  Four billion dollars will be left in the hands of Guyanese with the raising of the income tax threshold and the increasedtransfers to the indigenous and other vulnerable communities.  However, 90 percent of the increase will shift from the private sector to the central government, indicating the amount of public money up for abuse without the PPC in place or some other mechanism to achieve check and balance.

Shareholder Expectations

In setting up the budget framework, the administration does not give sufficient attention to variables with possible unforeseen consequences for sustainable development,and downplays the significance of remittances in the income equation.  The presentation leaves some readers wondering about the optimistic assumptions about commodity prices.  A sharp decline in the price of gold, for example, could lead to an aggressive over-exploitation of the environment in the short-term as investors seek to make up revenue lost from the decline in price.  The investment in minerals is by private companies which have to meet shareholder expectations.  There is no evidence that our concern for sustainable development anticipates such a possibility and the consequences shareholder interest could have on the environment.

The estimates will also be affected adversely and result in inadequate resources for policing the subject areas effectively.   A review of last year’s performance will show that growth slowed down considerably in almost all the sectors, except in education and transportation and storage.  The budget does not acknowledge this development and does not offer an explanation for the possible causes.  Nor does it anticipate this scenario worsening.


According to the Inter-American Development Bank, remittances in 2011 accounted for about 25 percent of the income generated by the Guyana economy.  That has been a regular feature of the Guyana economy which is surpassed only by Haiti as an economy dependent on remittances.  In fact, remittances have been the single largest contributor to the foreign exchange receipts.  Last year was the first time in several years that the inflow from Guyanese workers abroad was not the leading contributor to the international reserves held at the Central Bank.  It represents income that does not come from work and should be a major consideration in the preparation of the budget estimates and the policymakers’ outlook on the Guyana economy.  That importance is not recognized by the budget and could be an important contributor to the misunderstanding of poverty in Guyana.

While the budget articulates a positive vision for the country, the ability to achieve it remains questionable, since important institutions are not in place and important assumptions are excluded from the preparation of the estimates.  With Guyanese expected to enjoy limited benefits from the budget, the vision of the administration, though defensible, might remain out of reach.


No information was available at the time of writing to update the LSI.  As a consequence, the index remains unchanged in Week 2 of April.

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