The minister in his presentation began by outlining the performance of the economy in 2001, a year of domestic and international turmoil which negatively affected the country's economic performance. The minister after reviewing this difficult year went on to outline the Government's plans for this year, including a projection for a modest 2% growth.

Guyanese are beginning to outgrow the custom of associating budgets with agony. In the days of a centralised economy and especially in the early days of the structural adjustment programme with the IMF, the presentation of the annual budget brought much pain and anxiety. Even before budget day, shopkeepers would begin to raise prices in anticipation of devaluations and other pinching measures that were features of the budgets in those days.

Gone are those days. Today Guyanese await budgets with greater optimism, looking towards the growth projections and assessing what the budget has in store for them and their family.

The past year was politically calamitous for Guyana. Yet remarkably the economy grew by 1.9%, thanks mainly to the agricultural sector. Sugar production grew by 3.9% and rice by 10.4%; in the agri sub-sector, livestock increased by 2.7 per cent. Other agriculture grew by one per cent and fishing increased by one per cent.

In the mining sector some 499,171 ounces of gold were produced, but bauxite production declined by over 25% representing both bad and good news - bad in the sense of a decline in production but good because things can only get better.

The continuing good performance of the productive sectors is heartening since it demonstrates that Guyana is not slipping when it comes to increasing output. The performance of the various sectors apart from bauxite represents a remarkable achievement especially considering the political inferno sparked by the Opposition after their defeat at the polls.

We should all be thankful that we survived the year with our macro-economic variables intact.

Global recession, falling commodity prices, higher fuel prices and the fallout from the September 11 terrorist attacks in the U.S., however, wiped out these gains off the balance sheet. As the minister outlined in his budget speech, earnings from merchandise exports, which fell by US$19.8M in 2000, declined by another US$15M last year. Sugar receipts fell by US$9.6M or 8.1 per cent while those for rice declined by US$1.6M, since the increased volume of exports was unable to compensate for the lower average price. Timber earned US$2.2M less than in 2000 but gold receipts grew by US$3.7M to US$127M, largely on account of higher export volume.

On the revenue side lower imports caused the Customs and Trade Administration not to achieve their target despite the depreciation of the official exchange rate and higher oil prices. However the income tax department surpassed its target.

Against this background, Minister Kowlessar must be congratulated for being able to maintain a very low inflation rate, especially considering the cumulative effect of electricity tariffs last year. Had he not remitted fuel taxes, the price at the pumps would have gone through the roof and inflation would have soared. He must also be congratulated for ensuring that the macro economic fundamentals are in place and that despite the problems, the economy remains on a sound footing.

The prospects for global recovery are not that good. The world economy is expected to slowly emerge from the recent shocks. With this in mind, the minister has been cautions and has opted to err on the side of realism rather than succumb to blind optimism.

For this year the minister projects a moderate 2% growth. He may have been tempted to be more ambitious but fortune sometimes favours the pragmatic.

The 2002 budget reaffirms the Government's commitment to stay on the course that it has been pursuing for the past nine years - one that is steady and consistent. It has opted to continue to emphasise macro economic stability and fiscal rectitude. This after all helped cushion the economy over the years from the effects of a hostile international economic environment and led to growth and reconstruction.

As was in previous years, much emphasis has been placed on social sector spending, especially in the education sector.

Budget 2002 in effect seeks to break new ground without breaking the mould.