Leader of the Opposition Bharrat Jagdeo yesterday warned of excessive borrowing by the government and said that negative traits in major fiscal accounts paints an ominous future for the country.
Making his presentation on the government’s proposed 2019 national budget in the National Assembly yesterday, the former president said that the goals of the budget as presented in its title are not achievable since its measures contradict its goals.
Minister of Finance Winston Jordan, on November 26th, presented a $300.7 billion budget under the theme “Transforming the Economy, Empowering People, Building Sustainable Communities for the Good life.”
Taking the floor yesterday, Jagdeo, for nearly three hours, regaled the House with his concerns. He argued that the four macro-accounts display mainly negative traits and therefore paint a picture of an ominous future. He emphasised that the monetary sector is dominated by government borrowing from the local banking sector, while net foreign assets are depleted to fill the gap, creating an increasing Balance of Payment (BoP) deficit. The fiscal account, he added, has seen a massive increase in tax revenue and huge growth in expenditure but this expenditure continues to be in the non-productive sector.
“Almost every sector has suffered from lower growth or anemic growth,” he told the House.
According to Jagdeo, who has also previously served a Finance Minister, in the face of such realities Jordan should have told the nation how he would have addressed these issues.
“I expected he would say…these are the policy measures I will put in place to reverse this reality,” Jagdeo said, before explaining that government could either control demand or increase supply to address the BoP but instead chose to present a budget full of “useless” statistics.
Further, he argued, while government has increased domestic borrowing by 373%, foreign borrowing is a fraction of this at 11% since international money lenders require feasibility studies and conduct project audits. He emphasised that the full sum owned to local lenders is the equivalent of two years of the country’s projected income from Exxon. According to Jagdeo, rather than increasing as projected by Minister Jordan, Guyana’s foreign reserves will continue to be depleted.
“His [projected] BoP figure is always very different from the actual outcome,” Jagdeo told the House, before adding that the “tone deaf” government has elevated incompetence to a virtue.
“They are impervious to criticism and impervious to advice because they think they know it all when the fact is the country is heading to disaster,” he said.
He went on to accuse the government of decimating the re-migrant scheme after campaigning on the inclusion of the diaspora. “They have reduced the tax concession to a tax credit of $5 million,” he said before accusing government of “coded racism.”
According to Jagdeo, by arguing that his administration diverted funds from the public sector and armed forces to subside sugar, government is suggesting that only one ethnic group benefitted during his tenure.
The rhetoric of the APNU, he stressed, is that of the past even as his party welcomes “every gender, race or class.”
“We all know that sugar workers tend to be of a particular ethnicity while public servants and policemen tend to be of another,” he told the House before asking where monies formerly allocated to the sugar sector is now being spent.
For Jagdeo, these monies are being spent on vehicles and celebrations by a government, which he accused of setting up a Commission of Inquiry (CoI) to vindicate a criminal. The Lindo Creek CoI, he claimed, served no purpose other than to vindicate the “Fineman gang” and implicate the armed forces.
Further, he argued, government is even incompetent when it comes to implementing judgements it has won in court since the $3.8 billion judgement against Guyana Stores Limited is still to be acted on while shopkeepers, vendors and taxi drivers across the country are hounded by the Guyana Revenue Authority.
“Why? Because of political connections…they are ignoring low hanging fruit like this judgement because of political connections, the same type of connections that had them selling Stockfeeds stock below market value,” he stressed.