PPP/C wants motion on stimulating economy debated before budget

Irfaan Ali

In the wake of concerns about the state of the country’s economy, Opposition MP Irfaan Ali on Monday urged that a PPP/C motion on proposals to stimulate the economy and reduce poverty be debated ahead of the November 27 presentation of the 2018 budget.

“We believe that it is essential that this motion be considered before the presentation of the national budget so that adjustments can be made”, Ali said during a press conference where he cited what he said was  “massive levels of corruption across the government” highlighted in the recently released 2016 Auditor General Report.

Ali told reporters that the half-year report on the economy also showed that sugar, livestock, forestry, mining and quarrying, bauxite and gold production levels have all declined. “So if you look at the entire productive sector of the economy there was a total decline….These are the sectors that generate most of the revenue, brings in foreign revenue and allow us the space to grow the economy and to invest in public infrastructure”, he said adding that aside from this decline, food prices, the price index for medical and personal as well as educational and recreation services have grown. “So … you had a decline in the economy and a decline in the production sector which naturally would affect the employment rate”, he said.

According to Ali the country’s overall balance of payments moved to negative  US$46M from a surplus of US$12.1M. He said that this situation has resulted from low revenue from export earnings.

“… our external debt while our foreign reserves is at its lowest it has ever been in seven years has increased by US$53M…”,  he said.

It was in this regard that the motion in the name of Ali and Opposition Chief Whip Gail Teixeira was sent to Parliament.

Ali explained that the motion covers the opposition’s analysis of the economy and interventions required in every sector. He said that a response was received that the Clerk and the Speaker were out of the jurisdiction and as a result a date for debate can only be set once they have returned. Ali stated that to date there has been no word in relation to the hearing of the motion. Interestingly, he said, a number of the recommendations made in the motion are aligned with the government’s campaign manifesto.

In the recital to the motion the two MPs argued that all indicators are pointing to an economy that is deteriorating and which requires urgent “counter cyclical policies”. They further argued that the government’s tax-oriented approach to the economy has caused it to slide and that thousands of jobs are at risk.

Under fiscal and taxation policies, they called for the withdrawal of VAT on items that were previously zero-rated and the rescinding of new fees and licences from the 2016 and 2017 budgets. They also want VAT removed from essential food items, electricity, water, education goods and services, heavy-duty machinery  and local products in the forestry sector among other areas.

A major plank of their proposals is the saving of the sugar industry. Aside from reversing the planned closure/privatisation of estates, the MPs want a suspension of the proposed Special Purpose Unit to handle privatisation/diversification of the industry. Ali and Teixeira want the government to pursue a diversification study of the industry and a comprehensive socio-economic impact assessment.

On the transparency front, the PPP/C MPs urged that an international firm be hired to trace assets held overseas by former and present government officials. They also want an international firm to do a facts-based check on the acquisition of state assets from 1970 to the present.

On the electricity front, the legislators appealed for an end to the constant blackouts and to restore management of the power plants by Finnish company, Wartsila.

For the mining sector, the motion seeks the reversal of VAT on equipment, the tributors tax and the 2% final tax. It also wants unallocated oil blocks to be auctioned.

Later, Ali defended the opposition’s decision not to participate in budget consultations saying that it was unfair to ask them to participate in such a process without requested documents being supplied.

PPP/C MP Nigel Dharamlall who was also at the press conference highlighted issues in the Auditor General’s report which he said speaks to the levels of mismanagement and incompetence that “we see prevailing across the government”.

He said that these issues have to do with the many procurement violations during 2016, the overpayments made on contracts and services provided by the government, violations of the contingency fund advances and the sub-par performance in many ministries specific to the execution of capital works.

“We feel too that as these things are happening there is an obstinate and reticent presence of the government with regards to dealing with corruption…levels of incompetencies that we see taking place in our ministries, the lack of transparency …accountability and overall the lack of good governance”, he said.

Among the issues he singled out was the millions overpaid for contracts by the Ministry of Public Security and Ministry of Public Infrastructure as well as by regions.

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