Very early into his 2014 budget presentation, Finance Minister Dr Ashni Singh expressed great pride that the country had experienced eight consecutive years of GDP growth with last year’s being 5.2%. The figure and sustained growth are to be commended, except that critics and the average citizen would query whether that expansion in GDP has accomplished two things: a significant upswing in the job market and the lifting of the per capita income particularly for those under and near the poverty line. Such analysis has not been a feature of the Minister’s annual presentations or for those that preceded his but without that type of correlation, the annual growth figure is a mere statistic; the type that is summoned up from deep recesses to impress.
An enduring and inestimable flaw in PPP/C budgets are their unwillingness to address the evident unemployment and underemployment in the economy. Nowhere in the Finance Ministry’s annual activities or in the government’s interface with the public is the matter of the unemployment figure addressed and there is no policy or programmatic attempt to confront it in the 2014 budget. It must mean that the government has no ideas on how to create jobs or even to stimulate the private sector to accomplish this – the lone big project in recent years being Qualfon’s call centre. The Minister of Finance was able to complete his lengthy presentation without any direct reference to unemployment and the measures that the government would take. The results of the 2012 National Census, which may shed some light on this, are still being awaited in 2014. It seems that the government’s answer to this issue of unemployment is merely to continue highlighting the varied youth training programmes being offered by it and non-governmental organisations. These may create some enterprising entrepreneurs and lead to a few jobs but certainly not in the quantities that are needed.
Qualfon’s six thousand promised jobs in business process outsourcing is undoubtedly a big development in the information technology sector. That aside, the government has been unable through policies or by attracting investors to significantly transform the economy. The danger of this straitjacket was evident in the fall in foreign exchange earnings in 2013. Sugar was down because of production problems, so too was the economic star, gold because of the slide in world prices. Rice returns were up but in essence a set off against what Guyana would have spent purchasing oil. Bauxite and timber had unimpressive showings. There was no other co-star to share the stage. Twenty-two uninterrupted years of PPP/C governance has failed to restructure and transform the pillars of the economy and there are dangers to each of the established sectors in the years ahead.
One of the major measures announced by the Minister in this year’s budget, the $6B subvention for the Guyana Sugar Corporation will undoubtedly become a major flashpoint during the consideration of estimates by the Committee of Supply. The announcement of the subvention is as audacious as the bold-facedness with which it has been presented. Given the deep troubles facing GuySuCo, senior government spokesmen have gone on the offensive defending the subvention on the grounds that sugar has historically given to the country far more than these amounts. It is not an argument that will give the subvention a free pass.
If he wants this subvention to be approved, a total of $11B in three years, Minister Singh will clearly have to present to the Committee of Supply a viable plan for lifting GuySuCo out of its indebtedness and production rut. The problems are well known but neither the government nor GuySuCo project any real command of them. Therein lies the dilemma. Given the slumping production in recent years, the loss of a significant part of the labour force, poor field and agronomic practices, the size of the wage bill, impending negative developments in the EU market and the intractable problems at the Skeldon factory, the government has to lay out a convincing plan to the public that GuySuCo will be able to begin a sustained turnaround as was the case in the early 1990s. The omens are not positive and the government appears frozen in the politics of sugar and unable to take the right decisions even in relation to the composition of the board and management. Even after costly adjustments to the mammoth Skeldon factory it won’t deliver what it had promised five years ago. It is a disastrous result which the government will have to admit to and face otherwise the Skeldon factory and the industry will continue to be a drain on a weak economy.
Before a vote on the subvention is taken by the Committee of Supply there should be a forensic examination of GuySuCo’s accounts over the last five years, an assessment of its indebtedness and the scrutinizing of its present recovery plan to evaluate whether there is risk of continuing in the present direction. The government will have to explain what about the industry’s circumstances in 2014 necessitates a whopping $6B compared to $1B in 2013 and whether there is any certainty of recovery in the short to medium term. The use of recent subventions to GuySuCo and the large tranches from the European Union in accompanying measures since 2007 must be explained thoroughly. This openness and transparency should not be a problem for the government as the Minister himself acknowledged in his budget speech that GuySuCo will have to take a series of steps to “survive”.
Elsewhere in the budget, the large subsidy subventions for the Guyana Power Light (GPL) and electricity supply in Region 10 speak of the drift in government policy and the failure to address the underlying challenges. Government and Region 10 are still to engage on the power subsidies that rose to the fore in the middle of 2012 while the subventions to GPL are a result of the absence a diversified energy supply with an increasing emphasis on non-carbon options. The tortuous and stalemated moves on hydropower have highlighted this shortcoming.
There are no breathtaking policies or changes in Minister Singh’s speech which will give hope for a floating of all boats on a resurgent tide, just a marking of time. Benefits for the elderly have been adjusted slightly but larger issues like the fate of the NIS have not been tackled head-on. Embarrassingly, the government’s two-year-old promise on tax reform is yet to be delivered.
Amid this lacklustre presentation, the populace is now left to await the outcome of the debate and the fate of the budget considering the ruling of Justice Chang. One hopes that both sides of the House will carefully consider the gravity of the matter before them.
