Dear Editor,

THIS 2017 Budget has caused me to reflect on a question I have always toyed with all my adult life: Why can truth and politics not go together?

I have just read an excellent academic piece called “The Political Economy of Public Policy in contemporary India”, which strengthens my belief that the two can actually be brought together. Only politicians who have a shallow commitment to politics need to resort to falsehood, subterfuge and deception. If your commitment to people and politics is deep, the truth is your best armour.

What has happened this week in Guyana? Where should the people stand on this “SCUD-GET 2017” (yes a scud missile aimed at the poor and the working class)? What is the medium-range projection for the poor and the working class? What impact will this have on the 2020 elections?

I apologise if I may not answer all these questions today because of space constraints, but I will follow up with a subsequent dispatch to the media.
What has happened this week in Guyana?
Winston Jordan has unveiled a G$250 billion budget aimed at “building a diversified green economy.” But what he has really forgotten is how to protect the existing economy to generate the resources that can feed and fund the diversification process. Instead, he is using the model of taxing and borrowing more to spend more. But the operative question is who is being taxed more, and why? The answer remains the poor and the working class; and the business class is being asked to pay more into the treasury by way of these VAT charges on electricity so that the political fat cats in the Granger Administration can spend more. This entire game plan is all about the bigger pensions, bigger perks and the future mansions for the new political fat cats. Ask Hammie, he is the latest beneficiary of this scheme.

One of the principal documents within any budget is the Statement on the Central Government Financial Operations. This statement confirms how the Government intends to fulfil its mandate over a year through its financial activities. It basically gives you a summary of the total expected cash inflow into the Treasury vs. total expected cash outflow. Any householder can connect with this document, since it reconciles to the same realities of every family –- what they earn vs. what they spend.

If it is in deficit, it basically means that the Government is spending more than it earns, and irrespective of how respective ministers attempt to window-dress this number, a deficit is a deficit. When there is a deficit, it clearly means that the Government would be borrowing more money in the name of the newborn children of Guyana, or taxing the people more in order to satisfy this increased spending. This is exactly what Jordan has done in 2017. Irrespective of how we twist it and turn it, the people are being taxed more, so that the Granger Administration can spend more.

So let us peel this Statement on the Central Government Financial Operations to expose the “nitty gritty” of the three-card con game being played by Guyana’s newly moulded executive BS artist. In 2017, the non-financial public sector is expected to record a deficit of $42.6 billion (5.6 per cent of GDP) vs. $30.4 billion (4.3 per cent of GDP) in 2016. This translates into a new need for cash of some $12.2 billion in 2017.

So while there will be a decrease in some taxes — such as income tax, because of the increase in the tax threshold — there is a rapid expansion in VAT by almost G$10 billion because of the new, punitive tax on electricity and water, which will affect the poor and the working class the most and will also make many Guyanese businesses more uncompetitive.

Then there will be an expansion of the so-called fuel tax (excise tax) by another G$5 billion. The Environmental Levy is back, and is expected to rake in another G$1 billion, and the taxes on the small man in the form of miscellaneous taxes such as penalties on the “horse-cart man” and such people are expected to rake in an additional G$300 million.

So this budget is nothing else but “financial murderation” of the small man. He gets hit on the light bills, the water bills, the minibus fares, the licences on all the small shops and draycarts and so on and so on.

Why all this financial pressure? So that the new political fat cats can spend US$500 a night at boutique hotels when they visit overseas, as if they are some African dictator from Zimbabwe? Check the 2017 Budget carefully, there is enough evidence to expose an executive travel budget of some G$1 billion for 2017.

It is clear that these greedy politicians do not care if they have to borrow more to feed their gluttonous desires, because the minister clearly outlined that he is prepared to pay some G$1.5 billion more in interest payments for the national debts in 2017 compared to 2016.

There is no end to this financial insanity. The growth rate is plummeting, but we are paying more interest on the debt, and we continue to borrow more and more. To what end? Economic bankruptcy?

But I question the depth of economic knowledge of President Granger, since even Burnham would not have allowed such a budget to fly. Why is he not seeking more advice from his economic advisor Dr. Clive Thomas?

Look, I have challenged Clive on his work on GuySuCo because clearly he is not a businessman or a business strategist, but if there was any job Clive was born for, it is to be an economic presidential advisor. He is a very talented economist who is a million times more skilled than the minister in structuring an economy. So why is his mind not being tapped more on the economic front by the President?

It was Christopher Ram who skilfully advised us that Dr. Ashni Singh should seriously structure a budget of about G$175 billion in 2013. Ram was correct then. Since then, nothing significant has happened in the Guyanese economy to cause any Minister of Finance to want to bolt on G$75 billion in additional expenditure without a clear roadmap of how we can create rapid economic growth. So it is either the minister is playing politics with the economy, or he is guessing his way through this entire process. Both of these options would result in Guyana rapidly advancing to a state of economic bankruptcy.

Some commentators will say to me “same old PNC”, but I continue to reject that comment. I still think that Carl Greenidge would have been a greater asset to the Granger Administration as the Minister of Finance. He has the experience at conceiving pro-growth economic models, as we saw in 1990-1992. So the PNC does have talent in its ranks, just like the PPP. But this PNC talent is being stifled because of human insecurities and petty small men with small minds who continue to put themselves first, instead of Guyana.

Unless we change course and personnel at the very top in the Ministry of Finance, the small man must batten down himself for tough times ahead, as the clueless continue to be given the baton to lead on the economic front.

Regards,
SASENARINE SINGH