Impressions of the 17th Sitting of Parliament

 Dear Editor,
The recent sitting of the Parliament – on February 4 – was very informative, helpful, and clear on the macro level as to the intent of the current Administration and the perspective held by the Opposition. However, many details are yet to be clearly outlined and discussed.
The Ministers over Infrastructure and Finance have outlined a much-needed long-term developmental agenda, and I agree that the financial markets do currently provide a very attractive line of credit with their respective interest rates. Similarly, attractive rates were available prior to the pandemic and the current global economic crisis, as indicated by discussion on the $30 billion loan undertaken by the APNU+AFC.
It is clear that such an enormous blunder, which will probably be investigated, will not recur under the PPP/C. There does appear to be a linkage with the mismanagement of the Airport expansion project.
The point made about the lack of cash flow in the produce markets, buttressed by the example given of a vendor’s inability to sell vegetables which are usually $100 a parcel, is very telling, and is an experience that has been shared across the country for quite some time.
Keeping this perspective in mind, we must accept that the building of a new Demerara River bridge would lead to an increase in toll, which would drive fares up and ultimately
hit the pockets of workers.
Fixing of bus fares to prevent an increased burden upon workers would require a reduction in the prices of various fuels at the gas stations. Becoming a net exporter of oil & gas does provide room for some flexibility in prices at the pump. However, this could lead to an income shortfall for the country, if not properly managed.
On the contrary, allowing free market forces to continue would require salary increases, and most likely an increase in the minimum wage accompanied by improved tax collection. The underlying factor at risk is inflation. Thus, the discussion on currency strength comes into play once again.
Alternatively, the approach of placing more money in the pockets of workers first, via employment and investment in the revenue-generating sectors, would increase cash flow and reactivate the village economy. This would shore up the revenue streams available, and then provide the income via taxes to invest in development, while maintaining free market forces in the oil & gas sector. The question being answered is whether to build it and then wait for business to come, or build the business and then build the additional developmental infrastructure to support the expansion of a growing business. The latter is CRG’s preferred approach.
Some very good examples of the late President Jagan’s philosophy on spending were shared, and should give pause to taking a more aggressive approach to development, especially during uncertain and fragile economic times such as this current period. Obtaining key long-term agreements/contracts in the productive sectors, such as agriculture, would allow for guaranteed revenue streams to be established with known margins and required capacity, for which developmental plans can then be designed to support without the risk of becoming a financial burden upon the nation.
To put it simply: get the customer, agree on the business, and then build the infrastructure to support delivering the goods to the customer at the agreed-upon terms, while ensuring a profit is made.
The current proposed approach being taken does leave quite a bit of room for risk. Japan’s experience with the Olympics is a great example of what can go wrong by placing infrastructural development ahead of sales. The Japanese have built up their infrastructure to support an economic boom that was expected from the Olympics, and, unfortunately, the economic shock and restrictions due to the pandemic has altered the financial success of the endeavour.
The experience of Brazil with the Olympics is also very telling, and resulted in a massive financial loss for that country. What the Ministers have mentioned: concerning containers being able to move easier to Brazil and reduced travel time to the airport, is good; but it is unclear from the discussion how much additional income these improvements would generate for our economy.
CRG’s recommendation: to first strengthen the revenue streams of the productive sectors, increase the cash flow of the village economy, and place more earned income into the pockets of the workers, would help avoid the pitfalls faced by placing infrastructural expansionary development ahead of securing earnings.
A lot of the current infrastructure we have in place today would require massive investment to be returned to a high standard, and obtaining supply contracts at profitable prices for sugar, bauxite and agricultural products would require significant direct investment in those industries in order for them to become competitive; and therefore we should, as a nation, make this a higher priority. Those infrastructure projects that directly aid in reducing the cost of goods sold in our productive sectors should then be considered, with a clear link showing the financial impact that such an investment would make on the sector and the long-term agreement/contract which it supports.
These considerations do not exclude other productive sectors, such as forestry, fishing, mining, etc.
The discussion in the last Sitting of Parliament does show an improvement in the communication between both sides of the House. Congratulations on a giant step forward towards an improved discussion concerning the future growth of our nation.

Best regards,
Jamil Changlee