Tuesday, April 3, 2012

Will the AFC act responsibly, or will they continue to rubber stamp everything APNU does?

HARRY GILL: THIS year’s record-breaking $193 billion national budget has been presented by Finance Minister, Dr. Ashni Singh for passage through Parliament, and remarkably, there is no mention of any tax increase or new taxes anywhere in this budget. The debate that follows will determine the strengths and weaknesses of the opposition, their follies and their agenda. And Guyanese will determine how serious these law-makers are at putting personal differences aside, and finding common ground in the best interest of our nation. But most importantly, the true character of the Alliance For Change -AFC will be defined. Will they act responsibly, or will they continue to rubber stamp everything APNU does?

On its merit, the budget is commendable. Guyana achieved a 5.4% real growth in Gross Domestic Product (GDP) in 2011, making this the sixth consecutive year of positive growth in the economy. And despite allegations of corruption and lack of transparency, the PPP/C Administration continues to manage the country’s resources responsibly. Hats off to former President Bharrat Jagdeo, who must be given credit for this. This time next year, we will be able to judge the performance of newly elected President, Donald Ramotar to see if he can continue the upward trend in the country’s economic growth.
Overall, I believe the budget as presented is a good one that favours most Guyanese, and certainly, it appears to be working-class friendly. With passage, the Income tax threshold will be increased from $40,000 to $50,000 monthly. This in itself is remarkable, considering 21,000 workers will be removed from ever paying income tax. In fact, this can be seen as a $3 billion living allowance that these workers will be able to use as additional disposable income.
In keeping with its ongoing policy, Government will invest another $3.6 billion in the housing sector, to increase access to affordable housing, improve the quality of infrastructure of housing schemes and regularise squatter settlements.
Twenty two million dollars has been allocated to enable the Small Business Bureau to discharge its functions, and over the next four years, government proposed spending an additional US$10M to finance the development of Small and Medium-sized Enterprises –SME.
Public Assistance will increase from $5,500 to $5,900; and Old Age Pension from $7,500 to $8,100 per month.
Although I would have preferred to see a much larger increase in benefits for both Public Assistance and Old Age Pensioners, this may have been compromised by the sizable bailouts to GUYSUCO and the Guyana Power and Light (GPL) amounting to some $10 billion.
GUYSUCO is the nation’s largest single employer, and earns more foreign exchange than any other industry in Guyana. It is precisely for that reason that government must rescue this industry. But a bailout alone will not resolve the problems there, and taxpayers must be assured that this will not be repeated next year. Serious reforms must be implemented to greatly improve efficiency and productivity, by ridding the industry of incompetence and ineptitude.
GUYSUCO must find ways to increase production at a comparatively lower production cost. For had it not been for the saving grace of various agreements and arrangements: EU/ACP Sugar Protocol; the EU/SPS programme; the USA sugar programme; and the Common External Tariff (CET) which allow preference to the entry of Guyana’s sugar at prices that are usually higher than the cost in the non-preferential market, the economy would be in distress. I was pleased to hear the Finance Minister’s reassurance that government will spare no effort to ensure that the sugar industry is transformed to a viable and competitive one, and I expect no arguments from the opposition in this regard.

However, immense pressure must be brought upon the CEO of the Guyana Power and Light to demonstrate his ability to effectively manage this vital utility as a business, or be replaced for incompetence. Internal corruption within GPL must be eradicated completely, and dealt with severely. Merely admitting a loss of $4.5 billion last year is totally unacceptable, when it’s common knowledge that senior officers at GPL are blatantly involved in corrupt practices. And the decision to rent a US$900,000 generator for US720,000 annually demonstrates poor judgment in spending taxpayers’s money. Is management that dumb or is someone getting a handsome kickback from this deal?
I can understand why the government would want to bailout these two, but the subsidies to GUYSUCO and GPL must come with some real ‘teeth’, no more business as usual.

Although space does not permit me commenting on other aspects of the national budget, I must commend Dr. Ashni Singh for having the courage and fortitude to discontinue the subsidy on electricity for the town of Linden. According to Dr. Singh, since the privatisation of the bauxite operations in Linden and the Berbice River, government has been subsidising electricity rates in these communities.
“Currently, in Linden, electricity costs between $5 and $15 per kWh, while on the GPL grid customers pay an average of $64 per kWh.” He said that the total cost of this electricity subsidy was $2.9B last year, the equivalent of 10 percent of GPL’s total revenues. And for those who believe the decision to remove the subsidy was politically motivated, this may be so, but it was also necessary.
I am very pleased with Government’s tangible commitment to health care; education; water purification and distribution; sanitation; and the development of our youth.
Government’s decision to vigorously pursue all major projects initiated by the Jagdeo Administration is highly commendable, as these are vital to the continued growth and development of Guyana. The national budget is one that inspires confidence and pride: The Amalia Falls Hydroelectric Project; the Specialty Hospital; The Airport Expansion; and the Marriott Hotel, will not only provide jobs and a better standard of living for all, tourist arrivals will drastically increase, and all Guyanese will benefit from life-saving medical procedures at home. I sincerely hope that the AFC will allow commonsense to prevail and give critical support to bring these to fruition.
Sadly, I do not have the confidence that APNU will ever capitulate in the national interest. After all, their opposition is motivated by sheer envy. The PPP/C is doing for Guyana what they would have loved to do but can’t. As the former PNC, they were always bankrupt of ideas and the few that they’ve had, bankrupted the economy. Remember those days?


  1. Since the AFC came onto the scene they have always shown a pattern of being a follower and now that they have join with APNU in being the majority in parliament they are just going with the follow.Following with the APNU of being vindictive with the development of this country is time that they stand and do the right thing and look out for the people of this country.

  2. Its about time that the AFC do the right thing and stand for the development of this country and the people and stop following the APNU and their vindictiveness.