Budget preparations
Editorial
Minister of Finance Bharat Jagdeo is preparing for a March budget. It is later than we have become accustomed to but given the post-election disruption he has had no alternative. In the last few weeks the Minister has been receiving representations from various interest groups including the private sector organisations and the trades union congress (TUC). The Minister has an unenviable task. In the first place, revenues from customs and income tax were well below target last year partly due to the virtual shut down in December, traditionally a boom month. The sugar price has fallen due to the decline of the european currency unit and the first crop may be below target, rice markets are still a problem and el nino will affect the current crop. The Asian timber companies doing business here are going through a slump and the gold industry is under a cloud. Clearly it will be difficult to sustain the rate of growth the economy has enjoyed since l990 under the Economic Recovery Programme. Balancing the capital and revenue budgets will pose similar problems. The sustantial debt relief of over US $254 million due under the Highly Indebted and Poor Countries initiative will not become available until the end of this year. Though the debt burden has declined greatly from 607% of GDP in l99l it is still arduous and takes a substantial share of revenues and export earnings. The withdrawal of Sask Power from the GEC deal was a disaster. It is important to get a new electricity package in place at the earliest opportunity as this could provide a much needed boost to the economy in so many ways. The privatisation programme should also be accelerated to create fresh investment. But these will not impact immediately. What can be minister do? The situation is hardly propitious for increased taxation which would in any event be counterproductive and a deterrent to fresh investment. There is the problem too of public sector wages on which the TUC will have put its case. Given the fact, too, that there there has been a fall in public sector employment over the last ten years there can be little scope for cutting expenditure in this or other areas. An IMF team is still here negotiating a new enhanced structural adjustment facility. The minister will require the backing of the multilateral financial institutions to enable him to patch together a credible budget in this difficult period. 
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