Dear Editor,
In a nearly six-hour long speech to the Parliament of Guyana on Monday, Dr. Ashni Singh presented the largest budget in the history of the country. The $781.9 billion is “fully financed with no new taxes”. More than that, it is a document of transformative proportions, meaning that when fully implemented it will help underwrite the movement of Guyana from a structurally dependent economy, to one that is both self-reliant and sustainable. But economic change is not easy, nor does it work independently of other social structures and institutions in society. This much has been well established in the academic literature on development.
Budget 2023 is structured around two temporal rhythms. The first, and more easily understandable are to be found in the new Measures which, as is widely known, are intended to deal with problems in the short-term, or even consumption needs that must be addressed immediately. On this score, Budget 2023 offers a list of substantive “interventions”.
Chief among them are – the tax threshold is moving from $75,000 to $85,000; Because We Care Grants increases from $25,000 to $35,000; the school uniform grant stays in place, bringing total disbursements to students, to $40,000; the zero excise tax on fuel stays in place amounting to a significant subsidy for gasoline; the extension of freight relief to the tune of $6 billion is intact; $10 billion is slated for the Part-time Jobs Program; Old Age Pension goes from $28,000 to $33, 000, benefitting 73,000 persons; Public Assistance move to $16,000. There is an additional $5 billion in measures aimed at countering cost-of-living pressures.
While the budgetary measures are for immediate human security needs, allocations in health, education, housing and water, human services, and agriculture get around 48% of the $781.9 billion. This means that more than half of the budget is aimed at direct human development to be realized within the next twelve months, or before the next budgetary allocations are put into action.
Put differently, the budget has significant expenditures that are an admixture of the investment and consumption functions. The long-term capital outlays of the budget fit within the classic PPP approach to development, which, as Minister Singh noted, are built on the principles of continuity, consistency, and credibility. Even a cursory historical reflection would remind readers of long-term investments by PPP administrations that turned out to be monumentally important for the quality of life of the Guyanese people. Think of the establishment of UG by Cheddi Jagan in 1963, or the building of the Hope Canal or Berbice Bridge under President Bharrat Jagdeo. The PNC under F. Burnham also made long-term investments that still have value. The Demerara Harbour Bridge and the Soesdyke -Linden Highway were excellent long-term projects that continue to yield benefits daily. The attacks on long-term capital investments are not only uncalled for but lack basic economic rationality.
Budget 2023 makes good on key infrastructural projects. Chief among these, is the NGL, Gas-to-Shore plant to be constructed at Wales on the West Bank Demerara. The investment of a little of $40 billion in this project will provide immeasurable benefits to consumers when completed. Electricity cost is expected to be cut by half, and cooking gas is likely to drop by around 75%. As a transition energy source, there are also important environmental benefits to be derived. Thousands of high-paying jobs will be created. The same benefits will accrue when the oil refinery in Berbice is finally completed.
Over $136 billion will be spent on roads. The Opposition is fond of saying that people cannot eat roads. While this is nominally correct, it is foolish in terms of economic development where human-centred development is the priority. A proper road, river, and air transportation network is critical to farm to market cost reduction, food security, reduction of travelling cost to work and school, access to tourist/ leisure facilities, access to health care, and the reduction of lost labour hours due to traffic delays. Better roads will also contribute to a reduction in traffic accidents and fatalities.
The strength of Budget 2023 is that it is human centred, and well grounded in the political economy of environmental sustainability. Finally, I was in Parliament for the entire budget speech, and would like to commend Dr. Singh for keeping up his suave demeanour despite a stubborn cold. Praise must also be extended to the opposition parties whose members, persistent banter notwithstanding, demonstrated good discipline and even better spirit of democratic engagement.
Sincerely
Dr. Randolph Persaud
