Dear Editor,
After reviewing the sitting of Parliament that occurred on Thursday 16th December 2021, one cannot help but conclude that our nation’s spending must be better controlled. Forecasting to attain a sustainable level of development is becoming more important in Guyana’s fiscal planning process.
The Ministry of Education is a great example of where such an opportunity for improvement exists. The almost fivefold increase in capacity and intended output of new teachers must not result in a struggle to provide pay raises in future years, as seen in the recent past. Preventing such problems, which have resulted in protests and strikes, would require a significant reduction in the vulnerability which currently exists in the financial planning process.
The Ministry of Education is taking the correct step towards the development of our workforce, and the Ministry is also ensuring that our people are prepared to benefit from the accelerated development that would occur in our country.
To support this growth, we must be careful not to overspend and aggressively use up the funds in our Sovereign Wealth Fund. Not being fiscally conservative could lead to increased financial exposure within the economy, especially when poor fiscal and budgetary management is currently present within the Government.
Nonpayment of expenses, whether electricity or other business necessities, by those managing the purse strings of the various branches of Government continues to be an ongoing opportunity for improvement. Our Government must prove itself willing and capable of ensuring that its bills are paid on time. Hidden surprises in the expense account would increase our liabilities and increase the risk of serious indebtedness if prudence is not exercised in Government spending, and if Government savings & investments are not conservatively managed.
Also, the opportunity to improve the procurement process continues to present itself. As stated in Parliament, even the Drainage and Irrigation system, which is of utmost importance, has experienced a major procurement setback. The supplier management process continues to be a challenge that has cost the country directly via a purchase, resulting in critical equipment not meeting the current urgent needs of the country.
In addition, a number of Drainage & Irrigation projects are ongoing, which have resulted in a continual need for additional funds beyond their allocation in the budget. We must continue to cater for this overage in this section of the budget, but with a focused effort on improved project management.
Given the infancy of the construction industry, and how long it has taken for the Drainage & Irrigation of the country to regain sufficient attention for rebuilding and improvement, trying to build and fix everything everywhere at the same time can result, and has resulted, in sections of the system being fixed slowly, due to delays in construction, reduced project oversight, and projects exceeding their budget.
Our speed of development is dependent on the quality and quantity of highly skilled individuals that can support our growth. Therefore, we must be fiscally conservative while improving our internal processes, so as to be able to have budgetary flexibility that can absorb the inefficiencies currently within our internal processes. The negative impact of such inefficiency on our financial management system could be substantial, and an unplanned event, such as the current pandemic or a major oil spill, could leave the economy in ruins.
Vulnerable growth in non-oil sectors in the midst of the pandemic, the increasing frequency of flooding, and the lagging investment in D&I and sea defence projects are risks that could be devastating to the economy if increased prudence and improved prioritisation do not occur during the next budgetary period. We cannot afford to do it all at once, and we must choose wisely.
The productive and revenue-generating sectors of the economy are seeing increased activity, which is driving the urgency for increased availability of higher-skilled, knowledge-driven human resources. This must, however, be balanced against future earnings and productive sector development, which continues to compete with the urgent infrastructural needs of the coast.
Driving Foreign Direct Investment and a stronger currency strategy must play a key role in filling this gap. A structured job creation programme to support the increased investment in human resources would help ensure job availability for graduates, and having targeted training that aligns with our forecasted growth would also enable the quick uptake of future graduates.
The strength of the economy and the benefits of our nation’s development must be reflected in a low unemployment rate, a stronger currency, and improved fiscal management.
Best regards,
Jamil Changlee
