Today’s piece seeks to weigh in on concerns and criticisms of the $95 million allocation in budget 2020 for vehicles for Government officials versus salary increases for public servants and risk allowances for frontline workers. While these are not to be denied or ignored, the budget did in fact make provision for risk allowance for frontline health workers; and, following the protest, the Ministry of Health has taken the concerns very seriously, and is addressing them in order to arrive at some resolution. This is commendable, and is a good example of how a caring Government should respond.
However, having said that, this column is compelled to deal with the debate on this one particular allocation, which has occupied the attention of many commentators.
Now, let’s step back a bit and understand how the economy works. The critics of the $95 million allocation for vehicles are arguably replicating a caveat that is similar to that voiced by those who had criticised when the Marriott Hotel was constructed with Government funding back in 2011/2012. In hindsight today, we need another four hotels like the Marriott. Even the most ardent critics, like the owner of the Pegasus Hotel, was back then heavily critical of that investment; and today, the Pegasus owner is investing over US$100 million to expand his hotel to cater for the increased demand for executive suites and hotel accommodation over the next 10–20 years.
The Marriott was a bold and visionary investment at the time, given Government’s long-term development agenda for Guyana back then. Now, when you invest in a facility like the Marriott, it does not only cater for direct employment (the employment of some 200+ people), but also indirect employment; where, because of the Marriott – and the National Stadium – Guyana can host international cricket and bring in over US$ 1 million, or Gy$200 million, into the economy.
Think of the taxi owners at the airport. This is increased opportunities for the taxi owners, or the local transportation sector; again, more employment and commercial activities for the locals. Think of the local restaurants and the tourism and hospitality industry: all of these, where persons operate businesses, earn more income simply because of an investment like the Marriott.
Think of all the foreigners coming into the country, and all the big oil companies – foreign direct investments and the large international events; where are they held?
So, this is how that investment, which was taxpayer-funded, contributed to the long-term creation of sustainable jobs within the economy. Of course, later on, the Government can put up the Marriott for sale and double or quadruple what it had invested.
In an economy like Guyana’s, where the private sector or foreign investors do not have the risk appetite and investment capacity for such large-scale projects like the Marriott, and where the Government has an ambitious development agenda to take the country forward, it becomes necessary for the Government to make such an investment in order to mobilise more resources and encourage the private sector to get on board (that is how you boost confidence in the economy when it is lacking). Hence, in hindsight, the Marriott turned out to be an excellent investment, given the trajectory of the country.
Let’s now come back to the $95 million allocation for vehicles. While the critics are focused on the $95 million, they have ignored the allocation of over $300 million to support small businesses through grants and loans. They have ignored the risk allowance of $150 million for frontline health workers. They have ignored the $4.5 billion to support households which have been economically affected by the COVID-19 pandemic, where some 45% of households have lost their income and are on the breadline. They have ignored the fact that the health and education sectors have been affected, and so, by removing corporate tax, persons would not be denied access to education and healthcare, as the public system is not in competition with the private service providers in these areas per se; rather, they are complementary, especially in this circumstance.
There are many other measures in the budget to support not only the health workers and public servants, but the vulnerable and thousands of households affected, as well as the productive sectors that have been neglected and destroyed over the last five years. The budget contains fiscal measures to put the productive sectors back to work, which in turn would create employment and help to reduce the level of unemployment in the economy.
If these are not pro-poor policies, then what are?
Thus, why focus on $95 million – which, if we divide that by 21 ministries, works out to $4.5 million per ministry per vehicle – which represents a meagre 0.03 percent of the total budget.
It should be borne in mind that the old vehicles can be refurbished and would have some residual value, and can then be put up for sale.
It should be borne in mind also that since August 2, 2020, for the first time in five years, Guyana has a working President versus an astute delegatory, ceremonial and inactive President; and this President literally works around the clock, and this is an irrefutable fact. Every other Minister has been working around the clock seven days a week.
Having said that, $95 million for vehicles is therefore not as bad as the 50% salary increase in 2015 for Ministers; given that this is only a one-time expense into the acquisition of vehicles, and it is less than one percent of the total budget.
The real question is: Is this a well-deserved and justified benefit for Government officials? It is the view of this columnist that the answer is yes, given what they have accomplished in a matter of one month versus five years, and the vision outlined for Guyana by his Excellency.
When one listens to the President, as he articulates the vision for Guyana over the next 30 years, and what his administration intends to accomplish, one hears of an ambitious and achievable vision, undoubtedly so.
About the Author: JC. Bhagwandin is an economic and financial analyst, lecturer and business & financial consultant. The views expressed are exclusively his own, and do not necessarily represent those of this newspaper and the institutions he represents. For comments, send to [email protected].
