The $68.9 billion national budget presented by the government leaves Guyana blowing in the wind and the sugar recovery plan doesn't make sense, according to PNC/R front-bencher, Winston Murray.

Speaking to Stabroek News this week, Murray said that there is no acknowledgement in the budget of a crisis and as a result there is no focused and clear-cut measures aimed at getting the country out of it. The People's National Congress REFORM (PNC/R) has boycotted the parliamentary debate on the budget in protest at what it says is the administration's intransigence on a range of issues including the composition of parliamentary committees. The party held a town hall meeting yesterday to discuss the budget.

Murray, citing as an example the 1 per cent growth in the economy claimed by the government, observed that it was not achieved as a result of government policies and if put in perspective it fails to meet the 4.5 per cent per annum growth set out in the Poverty Reduction Strategy Paper (PRSP).

Nor, he pointed out, did it meet the 7-9 per cent growth annually the National Development Strategy says is necessary to raise Guyana to the level of a middle income economy.

Murray also claimed that the estimate of the projected revenue collection given in the budget is overstated by $5 billion based on the $3.8 billion refund of the rice levy last year. He also drew attention to the projected 2.5 per cent increase in the collections by Customs when the economy will not grow that much and the balance of payments projection does not show imports growing by 5 per cent even at the present rates of duty. He said that the only way the increase projected would be realised is by the value of the Guyana dollar depreciating.

Murray also contended that the deficit in 2001 was greater than that projected in last year's budget and the danger the country now faces is the heavy borrowing by the government to finance the deficit. He observed that the government's capital expenditure on public sector projects is being substantially financed by foreign loans and that the returns are indirect and more medium term than short term.

Murray pointed out that in the ten years since it assumed office, the government has borrowed some US$750 million thereby negating any benefits derived from the debt forgiveness it negotiated during the period. The borrowing, he said, has saddled every Guyanese with US$1000. The government has argued that during its tenure the external debt was reduced from US$2.1B to around US$1B.

Murray said that all of this would have been acceptable if the economy was growing and economic capacity was expanding as well.

The former trade minister in the Hoyte administration also regretted what he called the absence of an exit strategy from the IMF and World Bank programmes, pointing out that there was no information in the budget as to the status of the engagements with these institutions in relation to the enhanced Highly Indebted Poor Countries (HIPC) initiative.

Murray, looking at the government's commitment to making the private sector the engine of growth, said that it is hardly going to be realised with the erosion of confidence in the government that has taken place. He asserted that the behaviour of the government creates serious doubts about its commitment.

He cited the administration going back on its promise to enact an Investment Code into law and instead laying it in the National Assembly in a manner that did not allow for it to be debated. He claimed that it was slipped in among the papers on the parliamentarians' desks without any clear indication as to which ministry was responsible for presenting it.

Aspects of the code, Murray said, were worrying. He pointed to the retention of ministerial discretion as disturbing, arguing that it could leave the ministers open to charges of favouritism.

He cited too the Tourism Authority Act, the function of which is ostensibly to promote and regulate the industry.

Murray says that the legislation provides for the Minister to appoint the chairman of the Authority rather than allow the members once appointed by the minister to elect a chairman from among themselves. He also questioned why the legislation does not provide for the Tourism and Hospitality Association of Guyana to nominate two of the seven members.

He also argued that the legislation also limits the powers of the Authority to regulate the industry as the approval of the Minister is needed.

With regards to the sugar industry, Murray claimed that the government is not being open with the people in terms of whether it is closing the Demerara estates. He pointed to comments by a government official that the state will work with the enterprises that will remain in the public sector. The inference, Murray said that could be drawn is that the expansion in production at Skeldon will take place while the West Demerara operations will be closed. The government has denied that Demerara estates will be shut down.

Murray was also critical of the 450,000 tonnes sugar expansion plan for Guysuco aimed at reducing production costs to around US$0.11 cents a pound over the next five years when world prices are expected to drop to around US$0.07 - $0.08 cents a pound.

He contended that it does not make economic sense to expand production to that level without plans for alternative uses of the sugarcane, such as the production of high quality paper as is in India and of going into organically produced sugar for which there is a niche market. Guysuco is already piloting organic sugar cultivation at Uitvlugt.

Murray said that plans to package sugar in new sizes hardly fit the bill of what is needed.

In relation to rice, Murray was high in his praise of the government plans to assist small farmers indebted to the banks up to $10 million.

He, however, regrets that the government has left the larger farmers with debts over $10 million to fend for themselves.

Murray posited that the larger farmers had a greater capacity to improve the efficiency of the industry as well as to form strategic alliances that would allow the involvement of the smaller farmers.

He said that it is regrettable that the government holds the view that the large rice farmers/millers have salted away their money overseas.

Commenting on the public sector wage increase about which there is no mention in the budget, Murray said that he understands the desirability of a multi-year wage agreement but it would not have been out of place in the budget to have indicated what was contemplated as the quantum of increases.

He noted, however, that while the government is wedded to the negotiation of wage increases within certain guidelines, it continues to pay super salaries to persons on contract.

Murray said that it might be timely and proper to publish the categories of workers employed on contract and how much they are being paid.

In total Murray said the budget fails to create an awareness that there is a cohesive plan and programme to take Guyana out of the difficulties and it demonstrated that the government lacks the capacity to do the things that are necessary. (Patrick Denny)