Dear Editor,
The Government is preparing the budget for fiscal year September 2020-Aug 2021. Often, the nation is not given an input on how the budget is prepared – how the numbers are derived in revenue intakes and expenditures. There was hardly any national consultation during the last regime, and given the emergency of the present situation, it is unlikely that the new Government has time to consult with the nation on needs that must be addressed. In earlier years, however, Jagdeo had consulted the business community in budget preparation.
Over the last several years, the budget was prepared and rammed down the throats of the public. Contributions from the public were ignored. Guyana, and even other countries, should consider emulating the US model on budget preparation and approval. The President presents a budget and the Congress debates and changes the budget. Historically, Congress amended the budget after consultation with the public, and the President tended to accept the changes.
Anyone who studies Economics would know what is a budget (plan on estimated income and expenses for a given period) and why it is necessary. Economists know the essentials of budget preparation of a country, as well as the importance of wide consultation. It is a mandatory course for anyone majoring in Economics, and most certainly for those doing MA or PhD on the subject. Budget preparation is part of the training to become an economist. Even organisations, universities, schools must have a budget (revenues and expenditures) that are reviewed and approved by the full body.
When I taught Economics, students were required to learn the importance of how to prepare a budget. In a country or an organisation, money cannot be expended without approval, unless there is a proven emergency. When I was elected to student government, and held the post of treasurer, I had to present a budget for approval (by the entire elected body) normally in September, and could not even order refreshments without authorisation of expenditure in a vote.
The same was true when I served at City College President’s Council, where I attended meetings and debated the college’s budget and its disbursements to various departments. Even the college President could not expend money without approval. There is consultation with stakeholders in the preparation of the budget for the student government, and the same applies to the presidency of the college before its submission for approval by the respective full voting bodies.
The same should be true of a country’s budget, which is the most important decision and vote in Parliament that a Government has to make.
In Guyana, the young Government should undertake a needs assessment and a review of revenues at hand and projected intakes. Government needs wide national approval, not just parliamentary approval, for its planned expenditures, to balance demands against affordability (revenue coming in). It would also help the Government on the feasibility and desirability of the budget, from a macroeconomic as well as microeconomic perspective.
Democratic countries mandate that the legislature debate and approve the budget. Once approved, items cannot be added or funds amended without approval by the legislature. The US President, for example, cannot expend money without approval of Congress, but he can also reject changes made by Congress. Normally, there is compromise once the budget gets to Congress, where the President’s budget is largely accepted with minor changes.
Usually, for any country, or organisation, or educational institution, the budget is a redo of the previous fiscal year, with the revenue and expenditure numbers changing, a few items being removed, and a few items added. The same would be true for Guyana, where technical experts prepare the budget guided by a Finance Minister and his team. Vice President Jagdeo is very experienced and skilled in this area. He is also very good at revenue creation, and even his worst critics would admit this.
This year, there is an additional burden across all items, and perhaps the introduction of a new item on the budget – the impact of COVID-19 – and it is likely to take up a large chunk of the expenditure side of the budget. Guyana has been devastated by COVID-19, not in terms of infected cases, but in terms of COVID’s effects: closure of business, loss of jobs and incomes, and contraction of GDP. And the situation is compounded by the effects of bad polices and governance by the predecessor regime, which sent home some 20 thousand workers.
Government must allocate money to provide assistance to so many persons who are now on the breadline.
An assessment through as wide a consultation as possible would help to give understanding of the needs of the population before completion of the numbers in the budget.
Yours truly,
Vishnu Bisram
