Dear Editor,
This year’s budget started unexpectedly with the parliamentary site showing that the budget presentation had ended on January 15th at 3:30pm. A sign of things to come or an error that could be easily corrected? With economic development timing is very important. The global economy is slowing, inflation is high and interest rates are skyrocketing. The past budgets were not balanced and excessive spending was driven primarily by borrowing. This year’s budget should be retooled to ensure government receipts balance with expenditures. The additional funds available in the NRF should be invested to capitalize on the high interest rates, while allowing inflation to fall as supply chain issues are resolved. Not only will this make our development plan more affordable, but it will also allow the Human Resources and internal capabilities of the country to further develop to a level where the economy can efficiently and effectively absorb the increased expected future growth. Our CapEx investments continue to be limited by our internal capabilities. We must allow time for these capabilities to further be developed and enhanced. Paying down our debts continues to be important and will help ensure favourable future credit worthiness. The local economy is also at risk of overheating and this approach to economic development during this difficult global financial period will allow Guyana to strengthen its long-term position for further development. Having 2023 be a year of focus on electricity, water, drainage and community needs will ensure a strong year of accomplishment that will have a direct impact on our citizens.
The non-oil sector’s growth is promising and should be further encouraged, but we must be in tune with demand and expected price growth. Strengthening market growth that is less vulnerable to supply chain fluctuations will require an increased focus on regional growth and improved forecasting. The opportunity with India for the production of millets was timid and should be revisited with a baseline acreage of at least 1000 acres combined with a secured sales agreement. Our country should also no longer overlook the organic farming industry and the opportunity that it offers.
We must be cautious of the build it and they will come approach and revisit our infrastructural investments to ensure that the economic activity involved will provide a reasonable return on investment. Opening markets and ensuring sales should be a high priority alongside our citizens’ convenience and increasing of productivity within the economy. Our sugar production has fallen while prices have increased and our rice production yields have increased while prices have fallen. Investing ahead of the curve must be in tune with macroeconomic conditions and supported by secured market sales. We must be careful to not be too aggressive in our investment programme unless there is a guaranteed payback period that will guarantee that funds are not prematurely spent in a high inflation environment where the cost of debt is higher than the expected rate of return. In the largest market in the world stores are closing and many businesses are in debt. The US and China should be an indication of an opportunity to wait for demand to fall, supply chain bottlenecks to be removed and prices to become more affordable to support our future development while our funds increase in value as a result of the current higher rates of investment. The non productive sectors that cater to the health and well-being of our citizens continue to be a focus in the budget and should be applauded. The education of our children and their safety continues to be a focus of the budget and it is CRG’s hope that the immediate infrastructural needs that are being looked at will include the fire safety needs that have now become clear to our Nation. It is unfortunate that those safety needs were not explicitly mentioned during the presentation. The continued development of the University of Guyana in Demerara and Berbice is encouraging and we also look forward to an investment in a strong offering in Essequibo.
Housing growth is also praiseworthy. However, the opportunity continues to exist for a pre-investment in a sewage system, underground electricity lines, the supporting water system; and having the roads, clinics and police outposts in place prior to lot distribution. This will ensure the avoidance of the current problems we have with electricity, water, road, security and healthcare needs in established communities. We must ensure the correct level of focus is in place for our investments to bring about a stronger and safer economy. This also highlights the current gaps that are in place within the current infrastructure. Let’s make a better effort at improving what we currently have before an aggressive expansion programme is pursued. It is in our country’s best interest to secure what we have by completing the improvement of our drainage and sea defence infrastructure. The current proposed budget needs to provide further clarity in this crucial area of our infrastructure.
Best regards,
Jamil Changlee
Chairman
The Cooperative Republicans of Guyana
