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…Jordan says estimates void of plan to guide Guyana out of pandemic, economic recovery
By Svetlana Marshall
The $383.1B Budget presented to the National Assembly for the Financial Year 2021, offers public servants little hope, and is void of a medium term plan, necessary, to steer Guyana out of the current COVID-19 pandemic and unto the road of economic recovery, Winston Jordan, the country’s former Finance Minister has said.
In an interview with A Partnership for National Unity + Alliance For Change (APNU+AFC) Member of Parliament and Host of ‘In The Ring,’ Sherod Duncan, Jordan, on Friday night, said the budget was anything but comprehensive.
He said though the budget presentation by the Senior Minister within the Office of the President with responsibility for Finance, Dr. Ashni Singh spanned for well over four hours on Friday, and appeared “weighty,” it was not comprehensive, and failed to provide the nation with a medium term strategy that would “(a) bring us out of COVID-19 and (b) return the economy to some semblance of normalcy.”
However, Vice President Bharrat Jagdeo says the APNU+AFC continues to mislead their supporters and the Guyanese public. In a Facebook post he said: “The fact is that over $10B has been budgeted in the estimates under the head, ‘revision of wages and salaries’. A huge part of that sum will go towards salary increases for public sector workers.”
Dr. Singh, in presenting the Budget under the theme ‘A Path to Recovery, Economic Dynamism and Resilience,’ said the People’s Progressive Party/Civic (PPP/C) Government has set aside approximately $750M to support the roll out of the COVID-19 Vaccination Programme with effect from this month, but Jordan said while this is a welcomed move, the Administration failed to provide additional relief to the Guyanese people to cushion the impact of the COVID-19 pandemic.
From the onset of his presentation, Dr. Singh had pointed out that the 2020 Budget had provided for $7B of COVID-19 relief cash grants to households across Guyana, $2B of one-off grants to public sector employees, and $1B in year-end bonuses to front-line workers in the health sector and the disciplined services. Additionally, he said $2.1B was spent to acquire critical items including medical supplies, COVID-19 test kits, sanitising materials and personal protective equipment. However, Jordan said from the look of things, the relief programmes offered in 2020 will not continue in 2021, though the pandemic is on the rise in Guyana, with more and more deaths recorded each day. Just this past week, six persons died from the virus, while hundreds more were infected. To date, the country has recorded over 8,000 confirmed cases of COVID-19.
“You didn’t hear anything in the budget as to whether this is the end of the COVID relief [programme] or whether there is another round of COVID relief targeting a specific set of people…Instead you get the impression that $750M set aside for vaccines is meant to solve our COVID problems,” Jordan said while positing that the budget was fill with platitudes.
He added: “You didn’t hear a comprehensive programme that would see us through COVID with the expectation of the economy returning to normalcy by x time.”
The former Finance Minister, who served under the APNU+AFC Administration from 2015-2020, said to further compound the situation, the multibillion budget failed to address the direct needs of public servants. In fact, he said the budget offered public servants “nothing.”
“There is nothing in the budget for public servants….they are in for a rough ride over the next 4 years if the Government continues…They got nothing in 2020 and nothing in 2021,” Jordan said during the programme, which was broadcast live on popular social media platform Facebook.
On the campaign trail ahead of the 2020 General and Regional Elections, the PPP/C had promised a 50% salary increase for public servants, however, there was no such increase when the 2020 Emergency Budget was presented last September, and no such increase this time around.
The APNU+AFC, during its five-years in office, increased salaries by 26%, 10%, 9%, 7% and 9% annually from 2015 to 2019. The minimum wage went from $39,570 in May 2015 to $70,000 in 2019.
Jordan said instead of attempting to reel back the effects of the COVID-19 pandemic, which has crippled economies across the world, the PPP/C is fixated on programmes of the past, while leaving the Guyanese people ‘out in the cold.’
The country’s real Gross Domestic Product (GDP) in 2020 is estimated to have grown by 43.5%, lower than previously expected. However, the non-oil economy is estimated to have contracted by 7.3 percent.
As part of its recovery plan, the PPP/C Government is seeking to piggyback on the Low Carbon Development Strategy (LCDS), which was a flagship programme under the Bharrat Jagdeo Administration, while restarting talks on the Amelia Falls Hydro Power Project.
Aside from the US$135M it is seeking to access under the Guyana-Norway Agreement, the Finance Minister said the Government is assessing the emerging international markets for forest climate services. “…later this year, we will prepare an expanded LCDS to take into account the opportunities and challenges that have emerged since the document was first produced, and to expand it into a comprehensive development strategy. Of course, this will incorporate the fact that we are now an oil producer,” Dr Singh said.
He added: “In the updated LCDS, the Government will set out how Guyana can achieve the national transformation that the PPP/C Manifesto speaks of, while also participating in the global economic transition that will take place in the coming decades.” But Jordan is unimpressed with the plan.
Further, in the eyes of Jordan, the budgetary measures tabled by the PPP/C Administration are weak, in some instances.
Among the measures announced by Dr. Singh is the removal of VAT on data for residential and individual use but Jordan questioned how a large percentage of Guyanese will benefit from such an initiative when they do not have access to internet or lack the technological devices need to use the internet.
He submitted, in this period of remote learning, the Government could have used Budget 2021 to set aside $5B for the acquisition of tablets and computers for children who are at home unable to participate in e-learning because of the lack of equipment and or internet access.
Additionally, he posited that the removal of VAT from Basic Food and Household items, and construction materials, though intended to reduce the price of these commodities, may not redound to the benefit of the people.
Jordan explained that though the APNU+AFC Government before demitting Office in 2020 had removed VAT from hinterland-bound flights as part of Emergency Measures rolled out in April to cushion the impact caused by the pandemic, the airfares still remain high.
“I don’t see that as a benefit simply because as you and I know removal of taxes from food stuff or hardware, rarely passes through to the consumers. And as a typical example, only this week, the very government said that they were going to meet with the private aircraft owners association, to find out why they haven’t pass through the removal of VAT on hinterland travel,” Jordan explained.
He added: “VAT was removed since April, since April, so if the travelers are complaining that the fares are still high then either the VAT wasn’t pass through to some aircraft owners or as typically the case the operators would say fuel went up, spare parts went up and etc and therefore the prices remain the same or even higher.”
Jordan also called out the PPP/C Administration for taking full credit for projects which were initiated under the APNU+AFC Administration such as the Linden to Mabura Hill Road Project and the Linden-Soesdyke Rehabilitation Project.
“We are not against these projects but please in the name of honesty and transparency, say we will continue the projects started by the previous Administration. But it seems as if there is an attempt to completely wipe out anything that was done by the coalition,” Jordan said.
The former Finance Minister also warned the PPP/C Administration against depending heavily on the Petroleum Industry. “They seem to be putting all of their eggs in this petroleum basket to the detriment of us because when you look at the deficit that is projected for 2021, it is 100 plus billion dollars; 2020 the deficit was $92B, 2021 it is a 100 plus billion dollars; in two years it will be a $192B my friend, that is debt that have to be repaid,” he warned.
Earlier this month, the Government used its majority vote in the National Assembly to pass two motions that will see the country’s domestic debt ceiling increasing from $150B to $500B, and the external loans limit moving to $650B from a low of $400B, however, the Opposition has warned that the move will only place great financial burden on the present and future generations.