Government has no economic nous

The debate on one of the most contentious Budgets concluded on Friday; and unfortunately, more heat than light was generated from the Government benches about where we are headed. While boasting about its plan to spend over $300 billion, the Budget is a patchwork of short-term quick fixes like plaster to cover erupting sores. In developing economies such as ours, however, the Government should be playing a very active role in promoting economic development; and fiscal policy, as executed through its Budget, is the instrument it must use.
From our perspective, the greatest failure of Budget 2019 is that it is not guided by a clear strategy to address the challenges that confront Guyanese society today; and inevitably, it therefore lacks coherence in its proposals and projects. Take, for instance, the PNC-led Government’s stated commitment to deliver reliable electricity at lower costs, to encourage the economy to engage in more value-added production and move us away from being a primary-product- price-taking economy.
Entering into the fourth and penultimate year before the 2020 elections, the Government is nowhere closer to fulfilling that promise by investing in new generation equipment – whether “green” or “black” — and yet castigates the business community for not investing more. The much touted 25MW wind farm from 2015 has not materialised, and the solar alternatives to the rejected Amaila Falls Hydro-Electric Project (AFHEP) are as still-born as is the “Green State Development Strategy” (GSDS) — which is not even a pale imitation of the world-recognised Low Carbon Development Strategy (LCDS) of the predecessor PPPC regime.
What we have dangling under our noses is a nebulous plan to build a 200MW gas-fired generation plant even though Exxon, which is supposed to be producing the natural gas by separating it from oil aboard its Floating Production and Storage Offloading vessel, is recommending that the gas be reinjected to bring up more oil. Guyana has no way of countering the study which is being conducted by Exxon, since it does not have access to the data on which it will be based. Furthermore, a 200MW generation plant – with its liquefaction and regassification plants — will conservatively cost US$500 million, and the Government has not even broached the matter of a feasibility plan for this elephant in the room.
Another area in which the PNC Government has exposed its total inability to generate growth is on completing the infrastructural projects they inherited from the PPP. The expansion of the Cheddi Jagan International Airport (CJIA), for instance, was predicated on promoting Guyana as a regional air hub. Unfortunately, the Government has allowed itself to be bamboozled into accepting a severe truncation of the initial plan – a refurbished rather than a new arrivals building, and four rather than eight elevated boarding gates — while spending millions more. The delays on initiating the East Bank-East Coast bypass road and the Lethem-Linden Highway are just two other instances of infrastructural constipation.
Another example of the lack of coherence in the budget can be seen from the Government’s refusal to follow up on its manifesto promise to “prepare a long term National Development Plan with consequential programmes based on consultation with relevant bodies and key stakeholders. The objective would be to take sustainable advantage of the vast potential of Guyana’s resource endowments.”
Once again, the aforementioned GSDS was touted by the Finance Minister, but without it being tabled in the National Assembly, it is just “ole talk”. In the absence of such a plan, the budget inevitably becomes manifestly an exercise in “ad hocism”, especially when it comes to the economic development of the country. As the Opposition Leader has pointed out, the GSDS is not geared at producing revenues for Guyana’s development, but focuses on spending from the Consolidated Fund. It is clear the PNC Government believes that a “Green State” means painting everything not moving green, to join our pristine forests which are already green.
Budget 2019 was an incoherent, missed opportunity, and betrays the PNC Government’s lack of economic nous.