Budget 2000 balances global requirements, local imperatives - Kowlessar Stabroek News March 30, 2000 The year 2000 budget was prepared against a background of the requirements of the international economic environment and demands of the society, according to Minister in the Office of the President with responsibility for Finance, Saisnarine Kowlessar. And in doing so the government had to balance the conflicting demands on the budget measures, while giving priority to promoting development and improving the standard of living of the Guyanese people. But he stressed that to improve the lot of the people required, as the budget theme suggested, everyone working together. Speaking with reporters at a press briefing he co-hosted with President Bharrat Jagdeo, Kowlessar explained that one of the objectives of the budget was to reduce poverty and he cited the proposed expenditure in areas such as health, education, water, housing, "because we want to improve the lot of the people and to reduce poverty, and to create jobs... ." President Jagdeo also pointed out that two considerations had to be factored into the budget preparation--the tripling of fuel prices with the space of a year and the low prices the country received for its exports. He pointed out that when the Armstrong Arbitration Award was accepted a major concern of the private sector was that taxes would have to be raised to meet the government wages bill or the capital programme would have had to be cut thereby reducing the prospects for growth. "In this budget, Minister Kowlessar has managed not to increase taxes to pay for the increase in expenditure and he has expanded the capital programme of the country." The President said that it had been difficult to find a way of financing the increased wage bill, but government had managed to do so in a sustainable manner. Both the President and Kowlessar dismissed criticisms by the parliamentary opposition that the budget did not address the problems of the society, with President Jagdeo wryly commenting that someone was not reading. Another criticism of the budget was that it lacked an economic framework against which the performance of the economy could be measured. President Jagdeo explained that the 1998 budget statement had set out the framework and what the government's priorities would be during its second term. An examination of the subsequent budgets, he said, would show the firm links to the 1998 budget framework and some of the recommendations of the National Development Strategy which had been fast-tracked. He explained that in each of those budgets, separate sections had been devoted to a review of the performance of the economy against the targets which had been set. "The budget is not a one-shot thing. It is just a continuation," the President explained, adding that in his presentation Kowlessar had referred to the recommendations from the Business Summit, some of which were already being implemented. He noted that the budget focused "on some of the things that have been our priority and will continue to be our priority," explaining that over $8 billion had been allocated for education; $4.7 billion for the health sector; water between $1.4 to $1.5 billion; and a US$30 million ($5 billion) loan for housing in addition to $800 million from local sources. The President explained, too, that if the foreign-funded projects were implemented quickly, supplementary allocations would have to be sought. Dealing with the criticism that there was a lack of job creation measures in the budget, President Jagdeo said that this was an issue which had to be addressed within the ambit of the recommendations of the Business Summit. He said that the preliminary results of a study funded by the UNDP and carried out by the Statistical Bureau, had shown that unemployment had decreased. "We made sure that we continued to focus on things that are important to our people and it is not the gimmicks," he said, adding, "sometimes I get the sense that a few people are more interested in gimmicks than with the core continuation of a programme." He alluded to the criticisms that recommendations from the private sector were not included in the budget, explaining that many of the recommendations from the Business Summit were already being implemented and would impact positively on the private sector and job creation. "We have closed the Export Promotion Council; we have strengthened Go-Invest; we have now a draft bill for giving special concessions to small businesses given their impact on economic growth; and I have today assented to the Money Laundering Bill..." He said, too, that the Revenue Authority was brought into being and taxes had been reduced for the garment manufacturers if they were to sell in the local market. The President explained that as a result of the establishment of the North American Free Trade Agreement the garment industry, which employs a large number of women, faces severe external problems. But the President noted that what was vital for increased investment "is a stable macro-economic environment and the budget addressed how we would maintain stability in the economy and that's key to foreign investment." He said that the growth in credit to the private sector had moved from $7 billion in 1992 to $57 billion last year, pointing to massive growth in the housing and manufacturing sectors. He added that as a result of the government's increased capital programme more people are becoming employed. The President asserted that opposition parties could not say they were concerned about investment and jobs for young people, then tell investors to fade away as one party had done to the CDC/ESBI team which now runs the power company. "You can't issue threats and then say you are concerned about our young people."