President Irfaan Ali on Tuesday said that the Government is working assiduously to have an emergency budget in place, at a much-needed time to recuperate from the economic crises which the country faced in recent months.
During a brief engagement with the media on Tuesday evening, the Head of State said a financial plan is gravely needed, since no budget was passed for 2020 and the year is rapidly coming to an end. This, he added, has been compounded with the COVID-19 pandemic, causing a negative dent in Guyana’s economy. Later in the year, a National Budget will be presented to the National Assembly, he pointed out.
“At the moment, we’re working on what I would term an emergency budget; a budget that we have to go to quickly. Of course, we will have the more expansive budget later this year but we have to have a budget to move forward to the end of this year and to deal with some of the immediate issues, including the programme for the $4.5 billion to help at the household level in terms of the COVID-19 pandemic,” President Ali said.
While this provision would cater to households, Ali said he is in talks with international partners to render assistance, along with the Central Bank to extend the relief to small businesses.
“I’ve also been actively involved in mobilising resources from international agencies and bilateral partners and it has been going well so far. I’m hoping by Monday, we’ll be in a better position to say how much resources have been mobilised. I’ve also asked the Bank of Guyana to work on a relief package that would help people at the household level and secondly, help small businesses and people who would’ve had loans for housing and so on,” the President said.
The last budget approved by Guyana’s National Assembly was one for the fiscal year ending 2019, which means that all expenditure for the first half of 2020 has been curtailed to a monthly one-twelfth of the previous year’s expenditure. No new spending was possible during the first half of this year save for special circumstances as was with the advent of the coronavirus Task Force.
Under the coalition’s term in office, Guyana’s reserves were depleted to $0, but the account has since been running an overdraft to the tune of hundreds of billions of dollars. This situation was illustrated in the Bank of Guyana’s statement of Assets and Liabilities, published in the May 23 Official Gazette, revealing that the General Reserve is -$290,667,332. Additionally, Public Deposits have also depleted to below $0, also recording a negative balance of -$88,629,401,855.
Guyana’s Contingency Reserve account also reflects an alarmingly low amount of $2.3 billion. When APNU/AFC took office in May 2015, Guyana’s General Reserve had in its coffers just about $6 billion while the Contingency Reserve held $4 billion.
Despite affirmation that the December No-Confidence Motion (NCM) against the coalition Government was validly passed and the Caribbean Court of Justice (CCJ) explicitly stating that the Administration should stay within its caretaker mode, the previous Government had proceeded to commence for 2020’s Budget. But this did not follow through after the People’s Progressive Party/Civic was declared victorious and sworn in just over one week ago.
The five-month-long delay, controlled by the APNU/AFC coalition to remain in power, has compounded Guyana’s economic state. Throughout this time, the Bank of Guyana had sounded the alarm on the impending economic gloom facing the country.
In the Bank’s quarterly report and statistical bulletin for the first quarter of 2020, it was observed that Guyana would’ve been unable to escape the effects of the expected slowdown in global economic growth. In fact, the report noted that the world is likely to experience the worst depression since the great depression of the 1930s.
It had pointed out that the last time in recent history that Guyana’s trade balance recorded a surplus was under the People’s Progressive Party (PPP) Administration in the years 2009, 2010 and 2012. This was since the main export earners, in particular sugar, suffered extensively under the previous PNC-led Government.
Even with the coalition’s 2019 budget which was presented by former Finance Minister Winston Jordan, audit firm Ram and McRae called it out for having little to no provision for the poor, women and gender issues, and other critical matters like the Berbice Bridge, which was heading to the court after a Government takeover. (G12)