It goes without saying that the money being disbursed or committed by this government is the entitlement of all of the people of this country. So, when President Ali speaks, as when he addressed Parliament on Thursday, it isn’t that he has the sole say or it’s the PPP that is doing the country and its people a favour. It is Parliament that ultimately provides the imprimatur for expenditure of the type that the President spoke of except that historically the executive and legislature could hardly be distinguished from each other on spending matters with the exception of the period of the Ramotar administration.
Clearly the populist interventions by the President on Thursday will be well received by the target markets but that cannot be the only prism through which this spending must be viewed. Oil revenues have pumped up spending astronomically to the point where the symptoms of both the Resource Curse and the Dutch Disease have begun to be manifested. Fiscal responsibility and prudence in spending revenues from this non-renewable, polluting resource must be the watchwords.
The lynchpin of the President’s presentation was the announcement of a one-off $200,000 grant to each household. Just in this area alone there are several concerns. First, the President said that this initiative will cost $60b. This figure is roughly equivalent to 6% of the entire trillion-dollar-plus budget for 2024 and that is not even taking into account the extensive supplementary financing that has already been approved by the National Assembly this year. Moreover, it is being presented in the second week of the final quarter of the year. The concept of budgeting has therefore been tossed out of the window. This is not the way to plan an economy.
Second, one must ask what is the philosophy of this $200,000 grant? Is it to salve the horrendous cost of living burdens that have been testified about by the people of this country for over 90 weeks in this newspaper? Or is this the start of an institutionalised cash transfer or the beginnings of Universal Basic Income? Whatever it is it mustn’t be plucked out from a magician’s hat. This is a handout syndrome which this government feels will endear it to the populace and improve its electoral standing. What was clearly needed was the targeting of this handout to the poor classes of this country. Such targeting does require hard work and planning but that was what President Ali’s government was elected for and it has to show that it has developed the acumen for this. Handing out $200,000 to each household – the many well-heeled and the noveau riche included – is nonsense. Are the households of the oil bosses also included? That would be the height of absurdity.
Third, has the President or his Ministry of Finance costed what it will take to deliver this sum to each and every household in the country, scrupulously and transparently? In 2021 a $25,000 COVID-19 cash relief grant was handed out. There has been no magisterial report on its effectiveness save that there were enough complaints around to demonstrate that significant numbers of persons didn’t receive. Walking around the country with cash canisters will require security, transportation, per diems and a host of other arrangements. What will be the cost of this distribution? Who will monitor to ensure no corruption?
There were many elements of the President’s presentation that made sense such as the thrust towards digitization throughout the entire economy including areas such as electronic medical imaging and etravel arrangements but what is being lost sight of by this government is the requirement to respect inter-generational equity and not to unnecessarily burden future government with unaffordable expenses.
The President has already announced that once the new Demerara Harbour Bridge is in place there will be toll free travel across it and also on the Berbice and Wismar crossings. Free education will also resume from next January at the University of Guyana. Again, these alleviations will be welcome. But is the Ali government unthinkingly imposing burdens on future governments? Once the demand for oil falls would this administration and others in the coming years have sufficiently reoriented the economy away from oil and into high earning goods and services? The ways things are at the moment betting on this is dicey.
The Ali administration is required to do two things. Save a considerable portion of oil proceeds for future generations as they too are entitled to the benefits of the oil and begin generating these new economies and jobs. As it relates to the Natural Resource Fund (NRF), the government has gone in the opposite direction by expanding the take of oil proceeds. In his address, the President made much about the attributes of the NRF Act though commentators have already pointed out that its board is a sinecure and the formula is the real deal. Future generations are being denied the NRF cushion they are entitled to by this government. Not only is the government taking more but it is also borrowing more.
In the same vein of tying down future governments to unsustainable promises, the President announced with certitude that electricity tariffs will be cut by 50% even though this was meant to be predicated on the metrics of the gas-to-energy project. A Stabroek News editorial had predicted that the government would do this. As the plant will not have enough lead-in time to the 2025 general elections to gauge whether it will result in this hot promise of a 50% cut in energy bills the government is going to go ahead anyway. That is unaccountable, unscientific and duplicitous governance.
A dozen new hospitals will be built. What will be the running costs for these and where are the skilled personnel going to come from to man them? The country’s absorptive capacity is limited and it does not have that critical mass of the right skills to run these competently. A report of the Auditor General tabled at Thursday’s sitting highlighted the staffing shortages at the Maternity Unit of the GPHC between 2019 and 2020.
The President also spoke glowingly about the robust investment in training and how this is positioning the people of this country. On the same day the President spoke the Office of the Auditor General tabled a report on one such training programme, the Women’s Innovation and Investment Network (WINN). It is not reaching its targeted population, the value of the training is questionable and there has been little follow-up to ascertain whether the trainees are finding jobs. Good money is being wasted. At one point during his presentation on Thursday the President suggested that unemployment was no longer a problem in the country. It is clearly still a major problem in many communities throughout the country. Is the GOAL scholarship programme hitting its mark as it relates to creating new higher earning marketable jobs?
Increasingly it is evident that President Ali thinks that the future of the country is only for the PPP to decide and that the opposition parties by virtue of the 2020 elections shenanigans have deprived themselves of that right.
While it is commendable that the President addressed the National Assembly on Thursday, his extremely partisan presentation and its proclivities towards wanton spending jarred inordinately. One hopes that all of the measures and policies he unveiled will be robustly interrogated in the National Assembly before being implemented.
It cannot be stated too often that this government has to do a far better job of finding pockets of poverty and providing more help to these communities.