Home Top Stories Govt has no solutions for underperforming economy – Jagdeo
…Jordan says Govt not responsible for low export earnings
Taking the Government to task for its failings, ranging from lopsided agreements with oil companies to worrying economic indicators to corruption, Opposition Leader Bharrat Jagdeo on Friday lambasted Government during his contribution to the 2019 Budget Debate; a debate also characterised by walk outs.
As Jagdeo rose to address the chambers, all Government members, save for Communities Minister Ronald Bulkan and Indigenous People’s Affairs Minister Sydney Allicock, walked out of the chambers. They too subsequently left as the Opposition Leader began dissecting the budget.
Balance of Payments
Jagdeo, an economist by profession, observed that there were no measures announced in the 2019 Budget for lowering the Balance of Payments deficit or dealing with other worrying economic indices. <<<<Guyana Times>>>> has previously reported that Guyana’s overall balance of payment in the 2017 fiscal year showed a deficit of US$69.5 million.
This was a hike when compared to US$53.3 million the previous year. According to Jagdeo, none of the themes that characterise a good budget, such as trans-formative measures for the economy or empowering citizens are actually present.
“None of this will be achieved through this budget as it is currently configured. In fact, we believe that these goals are not only unattainable, but many of the measures outlined in the budget will run counter to those objectives. So for anyone to have an understanding of the state of the economy and the future economic health of the country, we have to do an in depth analysis.”
“It starts with the four macro accounts. In the financial sector, the most salient feature is the domination of Government borrowing from the banking sector. The second feature is the running down of our net foreign assets. Two very important variables when one looks at the well-being of the economy,” he said.
Jagdeo also pointed to the deterioration of the Balance of Payments (BoP) deficit. According to Jagdeo, Government has had to dig into the foreign reserves to fill the hole left in the BoP. That aside, the former President noted that there is also an increase in taxation.
“We have seen a huge growth in expenditure, but mainly recurrent, non-productive expenditure. If you open the first few pages of the budget, you will see that in almost every sector of our economy, lower growth. So it is very ominous for the future when the four major accounts used to analyse the well-being of the economy are all exhibiting these negative traits.”
“So we would have expected the Minister of Finance to come here and rather than speak for five hours and recycle routine data, he would say to us here is how I am going to address these problems. These are the policy measures I will put in place. That didn’t happen. We got a budget full of useless statistics… this Government has elevated incompetence to a virtue!” he said.
Besides the worrying signs for the economy and the underperforming traditional sectors, Jagdeo noted Government has very misplaced priorities in its spending. He noted that there have been decreases in spending on sectors like health and the Director of Public Prosecutions, compared to previous years. However, Jagdeo referenced the increases in non-essential areas including personal security.
Jagdeo also debunked Public Infrastructure Minister David Patterson’s assertion that there were no feasibility studies for several sectors. According to Jagdeo, a feasibility study was in fact done for the sugar sector and was a prerequisite for foreign funds.
He pointed to the existence of feasibility and marketing studies for the Berbice Bridge, the Marriott Hotel and the Amaila Falls Hydro Project. In fact, Jagdeo noted that most of this information are contained in public documents and he therefore condemned Patterson for spreading misinformation in the National Assembly.
The Opposition members walked out before the preceding speaking – Prime Minister Moses Nagamootoo – delivered his speech. Thus, when Finance Minister Winston Jordan rose to deliver his rebuttal, it was to empty Opposition benches.
In his rebuttal to close off the debates, Minister Jordan refuted the Opposition’s assertions regarding projected inflation. The Minister also stressed that the Government favoured the small man in the salary increases it announced in the budget. Also, Jordan noted that Government has not increased taxes or set any new taxes.
Jordan stated that Government made a number of measures, such as a reduction of the income and manufacturing tax rates. He even cited the measures to allow returning students who have completed at least three years of continuous study overseas, eligibility for re-migrant status. This measure includes the proposed removal of the six-month overseas ownership stipulation.
On the matter of the underperforming economy and low foreign currency earnings from exports, Jordan cited international prices but then said he was not making excuses. According to Jordan, the old days of high earning traditional sectors are gone.
“This is not excuses we’re making. You can’t be selling timber, bauxite, rice, sugar, none of which you control the prices, and expect that tomorrow when the prices go haywire that export earnings will be stabilised.”
“This is the reality that we face in this country. They can tell you how much was earnings… They had luck with gold. They had PetroCaribe going with the rice. And sugar was still doing 212,000 tonnes. All that is gone… the past is dead. Long live the past,” Jordan stated, going on to point to projected earnings from the oil and gas sector.
Jordan also repeated utterances that had previously landed him in hot water with the Private Sector Commission. The Minister declared that the nation previously featured an underground economy and that he did not have to provide evidence.