Jagdeo lobbying for debt relief to cover budget deficit
Stabroek News
February 27, 2003
President Bharrat Jagdeo is in Washington lobbying for support for enhanced HIPC relief to bridge an estimated US$20 million budget deficit.
The government is depending on further debt relief to flow from the Cologne Initiative to bridge the budget deficit and this relief had been expected in the first quarter of this year.
However, Stabroek News understands that the World Bank has adopted a position that Guyana is to be deemed off-track in relation to its programme and ineligible for full relief under the initiative unless it amends the procurement legislation passed in parliament in 2002. If delayed, this would cause problems for Guyana's budget presentation process and the President is reported to be in Washington to lobby support for the 2003 budget.
Cabinet Secretary, Dr Roger Luncheon, yesterday confirmed that the President was in Washington for talks with the multilateral financial institutions, connected with the national budget as well as the Poverty Reduction and Growth Facility Programme (PRGF).
The mid-term review of the latter programme has to be completed before relief would be forthcoming under the enhanced HIPC programme as well.
The World Bank, which oversees structural benchmarks within the IMF monitored three-year PRGF programme, says the procurement legislation passed in 2002 corrected some of the deficiencies in the system, although not all.
"The new law was deficient in that it further centralised the process to a National Board, [replacing the Central Tender Board]; allowed for cabinet intervention in the approval process; failed to mention the role of the Public Procurement Commission (PPC) of parliament and was not based on public consultations," a recent World Bank report said.
The bank staff, the report said, worked with the government on an acceptable interim arrangement and these modifications were contained in a circular to all government agencies by the Ministry of Finance. This was pending a revised National Procurement Act being passed in parliament by the end of 2002, to correct the defects.
The bank report said that the National Procurement and Tender Administration had already been formed and this body would draft new standard bidding documents and issue regulations for functioning under the new law, to be approved by the Public Procurement Commission.
The World Bank set out in its country procurement assessment report that Guyana needed to table amended legislation by December 15, 2002, and enact the law by December 31. None of this was done, with the government saying it could help to expedite the execution of this, but currently that was outside of its control. This is because appointing members to the Public Procurement Commission requires that the PNC be in parliament.
The target date set for the appointment of the members of the PPC and the passage of enabling legislation to allow it to function is June 30, 2003.
Guyana has been dubbed as having a high country risk rating for World Bank funds and the auditor general's report, citing repeated financial irregularities, has been used to substantiate the assessment.
