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 capitalise 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 creditworthiness. 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 would ensure a strong year of accomplishment that would 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, which is less vulnerable to supply chain fluctuations, would 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 secure 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 would provide a reasonable return on investment.
Opening markets and ensuring sales should be a high priority alongside our citizens’ convenience and increase 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 must be 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 nonproductive 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 would 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 applaudable. 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 lots’ 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.
It was refreshing to hear that the budget has embraced the Arts, and with it should also come an investment in our cultural diversity. We are blessed with being a country that is defined by six peoples, and our cultural expression should reflect this diversity and what joins them together in our beautiful Guyana. Cricket is richly rooted in the history of our country, and the Government’s commitment, as expressed in this year’s budget, is clear. We must also embrace the great accomplishments of GCC and the strong history of the Bourda Cricket Ground. It is world-renowned, and must also be a venue of choice for future events.
Overall, the budget was in line with the approach taken during previous years, and CRG continues to encourage the Government to relook at the opportunities that have presented themselves over the recent past, and refocus on what is both urgent and aligned with our long-term needs. For example, focusing on completing the new Demerara Harbour Bridge may be sufficient a project of such magnitude for the current project management capabilities available in the country.
In keeping with the spirit of the budget, “Improving lives today, building prosperity for tomorrow”, the Government can be more impactful within the population by considering the priorities and effectiveness of investments. We must maximise the current opportunities before us, and avoid risking the hard-found funds that have been made available after such a long and difficult history.
The outline of digital solutions was the highlight of the budget, and will help improve productivity and reduce the urgency of some of the infrastructural needs within the transportation sector.
Given the recent complaints around the Judiciary, one had expected an increased level of investment beyond what has been allocated in this year’s budget. The increase would have also improved the support needed for the planned increased investment in crime reduction and prevention. CRG looks forward to retooling the current budget proposal. May it bring balance and the needed focus to ensure its effective and efficient implementation.
Best regards,
Jamil Changlee
