Home Letters Strengthen then expand while maintaining balance
The current Administration must be congratulated on its recent budget submittal. It does place close to $50 billion into the pockets of current and retired workers as disposable income or as an increased savings opportunity. In a spirit of cooperation, I make the following suggestions:
Health comes before prosperity and the investment in the health sector of over $50 billion is encouraging and indicative of what future investments in the sector may require. Thus, having a savings rate that allows for the security of the health sector should be kept top of mind as the pandemic subsides.
Overall, the budget focuses on expansion of and reinvestment in the current infrastructure as seen in the focus of the Capital Expenditure (CapEx) allotted for 2021 which amounts to approximately $103 billion of which only $5.2 billion has been put aside for sea defence.
The Administration should consider changing the investment weighting of the mix of the CapEx portfolio. Allotting 10 per cent of the overall budget annually to strengthening and expansion of our sea defences will better support the reinvestment in the coastal plains being pursued.
This would raise the allotted CapEx for sea defence and supporting areas to $38 billion and provide funds necessary to raise the seawalls along the coast. Given the poor state of the water and sanitation system, an increased allotment to $10 billion should be considered. Payment for garbage management shouldn’t be an issue going forward nor should there be any sewage in the water system.
The development of Wales as a gas-to-shore location should be compared to alternative options such as the cost-sharing option with Suriname to develop a deep harbour shore base port on an island in the Corentyne River. This is a good way to determine whether a bridge connecting our two countries will continue to ensure the sovereignty of our nation. The cost of transporting the gas to that location should be competitive with the overall life cycle cost of a pipeline.
Given the many energy options being pursued and the high cost of the Amaila Falls project, pursuing a power grid expansion and other alternative energy options to the proposed project should be one of the feasibility studies completed within this fiscal cycle. Expansion of the Corentyne road is also necessary to support the push in the agricultural sector and the increased trade initiatives with our neighbours to the east. Many farmers are also drying their paddy on the shoulder of the roads and placing the planned implementation of paddy drying facilities in the area will also be beneficial.
The Amerindian and hinterland development budget should also be increased by $2 billion to allow for a faster rate of development and the increasing need to relocate citizens on the coast over the long term.
Given the CapEx suggestions, some of the other initiatives may need to be pursued in the following fiscal year where an additional view and investment initiative should be included to ensure the foundation is laid for the building of a New Capital City further inland.
The completion of the CJIA should be applauded, but we must keep in mind that there is a net gain of over US$3 million for the company involved. We must ensure that a better job is done in the renegotiation and adherence to the contract terms including punitive clauses going forward. The inability to obtain a US$500 fine from Exxon by the EPA is very telling.
The pursuit of manganese mining gives pause and the current Administration should consider the life cycle cost of such a low margin pursuit vs other more lucrative investment options. We don’t want to have to spend what is gained on healthcare due to the nature of such an unhealthy mining pursuit. Our people come first and foremost. We must keep them healthy.
Law and order is the next key item that requires a deeper review in addition to the allocated budget for this fiscal year. The deep-seated issues that affect racial equity need to be addressed and increased recruitment to reflect the racial makeup of our country needs to be an initiative that has focused funding. In addition, Brickdam Police headquarters is a shell of its previous splendour and the management of deportees continues to be an area where increased support is needed. Increasing the budget of the departments which impact both the justice system and the GPF by an additional $1 billion should be considered.
This may also be in lieu of some other initiatives for prisoners such as cooking classes etc. There must also be performance-based investment. If the metrics are improving at the Police station then the best performers should be given priority. Having open cases such as in the Singh and Chatterpaul murders should raise flags on required investment. We must not reward those who refuse to take a non-biased approach to policing.
Over the years the number of fires in the country continues to surprise many and the GFS should also receive consideration for a further increase of $1 billion.
In the agricultural, forestry and fishing sector, the forecast growth is encouraging and the need for improved product development of items higher in value such as aged Basmati Rice and the replenishment of our Greenheart inventory is necessary to increase the value and sustainability of this sector.
This is an area where investment initiatives should have increased focus. Issues affecting international standards that were highlighted during the fulfilment of the Mexican rice contract need to be addressed going forward and should be an area where a high percentage of the allocated funds should be focused.
There is also the Japanese rice opportunity, the coconut oil industry opportunity and the organic produce opportunity that will require Government investment support to ensure lucrative contracts are in place to support the investment drive in the sector. Aquaculture is becoming more important due to increased sea pollution. The current investment plans do aid in taking advantage of this opportunity. The recent visit by Walmart and the growth being seen by Kroger and Target should provide an area of focused contract pursuit in the near future. Carving out an area of the budget to support such an initiative should be considered.
In the area of culture, youth and sport which is somewhat tied to education and tourism an additional consideration of $1 billion should be given. It also helps in the reduction of crime and improvement of community sports grounds across the country increases opportunities for increased comradery amongst our citizens.
2021 presents a fiscal year that will see borrowing to support many CapEx initiatives. It is important that in the latter half of the current Administration’s 5-year term that a balanced budget is pursued, an increased national savings rate is established and the country establishes a surplus which will help offset any future economic shocks and unforeseen expenses (especially the dry well scenario of the oil and gas industry).
Congratulations to His Excellency and his team on their expansionary efforts and I thank them in advance for their consideration of the alternative approach of increasing the speed of strengthening and protecting our coastal plains investments while gradually expanding development and maintaining a low level of national debt.