Latest update April 25th, 2024 12:59 AM
Feb 23, 2009 Letters
Dear Editor,
The Finance Minister, Dr. Ashni Singh, in presenting the $128.9 billion budget in the National Assembly on Monday 9, February, 2009, in para. 1.10 of his presentation had this to say: “Mr. Speaker, still on the current global situation, we in Guyana should make no mistake about it: recovery from the current global recession will be long in coming and no country will be spared the accompanying trauma”.
Then, in SN dated February 10, 2009 in an article captioned: “Singh urges prudence but projects GDP growth at 4.7%”, Minister Singh was reported to have stated that the “economy remained relatively insulated from the global upheavals”.
Now clearly, the Minister either is confused as to what the word insulated means or he might just be trying to insult our intelligence. These two statements are vastly conflicting and do not support each other. On one hand, the Finance Minister is telling Guyanese that the impending consequences of the global economic crisis will not spare any country including Guyana, then on the other hand he tells us Guyana is immune, isolated, disengaged or secluded (all synonyms for insulated) from this global economic downturn.
The Guyana government, in an attempt to meet a lot of its budgetary needs, depends on economic assistance from international donor agencies and friendly nations, such as the United States, England, and Canada. Many Guyanese families also rely heavily on remittances from their relatives who reside in these countries to supplement their monthly expenses, among other needs.
Today, these countries are reeling from the devastating effect of the economic downturn, and as such are forced to resort to alternative economic plans to assist in reviving their specific economies and to restore confidence in the local markets, while attempting to relieve the frustration of their peoples. It was also reported in the local press that remittances coming to Guyana have declined. Taking the U.S as the prime example, this country has seen its highest unemployment rate in decades, unemployment rate is estimated at above 7% while employers continue to slash payroll almost daily.
The auto industry is lobbying Washington for bailout money to save the local auto industry from going under. General Motors, one of the nation’s biggest auto dealers, has laid off thousands of workers over the past three months and others have done the same. States and their localities are slashing budgets and cutting back on school programmes by as much as 30%. It is therefore obvious that, with these countries being affected the way they are, those nations which rely on them for economic assistance will be adversely affected.
So the Minister must decide which of the two statements he advances projects a more realistic situation for Guyana. To be insulated from the global economic crisis would mean that Guyana is a planet in and onto itself, and is fully self-sufficient. However, Guyanese have been facing harsh economic realities, which has deepened with the 16% imposed VAT long before the current crisis and this situation will only make it worse. Sensible governments, from the most developed to the less developed, have been seeking to devise appropriate economic measures to jumpstart their economies. The United States, labelled the most powerful country in the world, has seen its new government take bold and decisive action to stem the downward economic slide.
The newly elected President, Barack Obama, a few days after taking the oath of office appointed a team of economic advisors, which comprises of some of the nation’s most experienced and knowledge economic experts, to advise him on the way forward. And on February 17, 2009 President Obama signed into law the largest stimulus package in the history of the U.S; $787 billion was approved by
Congress to jumpstart the U.S economy and restore some level of confidence. While there are many pessimists who doubt that the bill might be able to achieve all the objectives it targets, the President has been praised for taking this bold step to steer the economy in a positive direction.
Some specific issues the bill intends to address include creating and/or sustaining jobs to cater for the billions of workers who continue to lose their jobs daily; $5 billion earmarked for additional unemployment benefits, and $40 billion to extend those benefits to December 31; $48 billion to be put towards transportation projects, thus creating employment; $116 billion allocated for tax credits in 2009-2010, where each worker will receive $400.00 or $800.00 per family; $44.5 billion to be allocated as aid to local school districts to prevent lay-offs and cut-backs. The plan also provides for $8.8 billion to be allocated to states to defray budgetary cost. Providing tax cuts for various categories of workers and businesses is also identified as a high priority of this plan.
One of Obama’s primary concerns, as reiterated in his speech on February 17, 2009 is job creation; accordingly his administration hopes to create 3-4 million jobs within the next few years.
Mr. Minister, I endorse the point you made as it relates to the fact that no country will be spared the negative consequences of these global economic challenges, and I wish to submit that Guyana, like countries around the world and even those in the region, must take sensible, reasonable and bold steps to protect its people from the full impact of this downturn.
The government must also take steps to cushion the likely shock the economy might face as a result of these unfortunate economic times. The popular position in the U.S with the current stimulus plan implemented is that the U.S economy is likely to rebound within the next 3-4 years. The question is what does this mean for Guyana, and how long will it take us to rebound.
The fact is if we continue to be naive and foolishly optimistic in the midst of obvious gloom, we may not realise the effect and, therefore, will not have the ability to rebound.
The Budget passed in the National Assembly on February 9 has failed to address three key concerns of Guyanese – these being:-
1. The reduction of the Value Added Tax (VAT), which citizens, organisations, and businesses have been complaining of since its implementation. It is believed that, should the government reduce this exorbitantly high tax, consumer spending will become less of a burden on the ordinary citizens and businesses.
2. Increasing the income tax threshold – with the current economic situation it is unconscionable for a government to allow those who work for salaries under $75,000 to pay tax. Keeping the income tax threshold at $38,000 is putting the majority of Guyanese workers, especially public servants, in a tight position. With average rent at about $30,000-$35,000, how can a single parent family or the ordinary Guyanese family survive?
3. Job creation – the budget failed to specifically address how the government intends to create jobs for the thousands of Guyanese youths, university graduates and others. In my view this should have been a major highlight of this year’s budget. Guyanese have been migrating to take up just about any job, for even the least skilled of jobs is rare at home. No longer is migration of Guyanese branded solely as a “brain drain phenomenon”.
I have argued that Guyana has not seen any major investment or job-creation project since Desmond Hoyte’s OMAI and BARAMA. It is undeniable that these two entities absorbed thousands from the local labour market. The World Cup Cricket hotels were to soak up hundreds of workers, but what is the reality? These ventures have virtually stalled, and become nothing but white elephants.
Clearly, the government is not listening to the cries of the people, nor does it seems interested in their plight. In examining the budget it appears that the government is keen on blowing its own trumpet of progress, despite how real the sufferings.
I therefore support Opposition Leader Robert Corbin and the PNCR in their call for the President and government to engage with a team of experts and stakeholders to assess the impact that the global economic situation is likely to have on Guyana. We cannot appear to be ostriches and bury our heads in the sand and adopt a “double-talk position” like Minister Singh. Nor should we wait for the problem to escalate. It is time that we put aside the partisan politics and seek means to protect our people from further economic woes, and safeguard the national economy.
No government has all the answers to the problems of a nation, and it is time that the Government behaves more responsibly and respond to the voices of the people.
The political parties, business sector, trade unions, professionals in the field of economics, and all other stakeholders and representatives of civil society must be consulted and encouraged to participate in these discussions. The University of Guyana should also be recognised as a vital partner in this process.
It is time we encourage genuine collective efforts to bring possible solutions to serious national issues and concerns.
Lurlene Nestor
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