Aug 05, 2020 Letters Comments Off on Ali’s administration policy priorities are timely and economically sound
The Guyana Budget & Policy Institute welcomes the budget and policy priorities of Dr. Ali’s administration. In an interview with the News Room on August 3, 2020, President Dr. Ali identified ‘a re-alignment of public spending to public needs’ and ‘a focus on deliverables and output’ as priorities of his administration. These priorities are both timely and necessary to ensure that public spending addresses the short and long-term needs of the citizens and the economy. The focus on output and deliverables is critical to ensure that public spending delivers on their intended purposes. These policy priorities are consistent with the institute’s priorities that it has been advocating for years and are reflected in the institute’s flagship annual budget report and analysis publication.
These policies are not just sensible and timely; they are the correct prescriptions that are necessary given the state the Granger administration has left the economy and public finance. The re-alignment of spending to public needs is likely to have profound impacts positive on the economy. In 2015, when the Granger administration came into office, 13 percent of the national budget was spent on economic opportunity sectors – agriculture, natural resources, and trade and commerce. At the end of 2019, allocations to these sectors were almost halved at just seven percent of the national budget. Funding for these sectors was repurposed to fund an oversized government bureaucracy without a clear legislative and policy agenda. These resources are better spent on the private sector to build productive capacity, grow the economy, and create jobs for people in pursuit of real economic growth.
President Ali’s policy focus on deliverables and output, once implemented and enforced, will represent a monumental change in public administration, a change that is necessary for thrusting Guyana to the next level of development. Too often policymakers measure progress by how much money is spent as opposed to what was delivered or achieved with the money. Shifting the focus on deliverables and output will increase value for taxpayers’ dollars; it will also improve the quality of public service and governance, core developmental needs for Guyana. Here again, it is easy to understand why such a change in policy makes economic and financial sense. Since 2015, the government spent more than a trillion taxpayers’ dollars with very little to show for it except for several icons of policy failure including GUYSUCO, Durban Park, the corrupt Drug Bond deal, Amaila Hydro, Ocean View, and the Demerara Harbour Bridge.
President Ali also identified the size of the government and operational efficiency as areas of concern for which his administration will be paying attention to. For years, there has been growing frustration among taxpayers who do not know what they are getting in return for the taxes they pay. Citizens want to know how effectively and efficiently the government is using their money to deliver needed services. They want to know how their money is being spent, why it is being spent that way, and what outcomes their investment yields. Most taxpayers would be hard-pressed to answer these questions. Like the others, this change in policy to focus on output and outcomes is sensible and much needed considering how much of taxpayers’ monies went to governance and administrative overheads under the Granger administration.
In 2019, for example, funding to the Ministry of Finance and the Ministry of Presidency totaled more than G$48 billion; this is more than all the monies that were allocated to all 10 administrative regions for agriculture, education, health, and infrastructure services; it is almost three times the amount of money invested in all the economic opportunity sectors, and it is more than is spent on public safety and security for the entire country. In 2019, funding for the Ministry for Finance alone was more than the total funding for all the ministries responsible for business, agriculture, and natural resources. Certainly, some of this funding is necessary and vital for efficient operations and planned improvement in these ministries. But even with such considerations, there is simply no conceivable economic and financial logic that could adequately justify these allocations; they simply defied economic thinking and reality.
Less than a week ago I cautioned on the need for ending the electoral crisis if we are to save the economy and families. Our political leaders have heeded to that call and all of Guyana is better for it. What is even more encouraging are the policy priorities that the new administration is embarking on; they are properly aligned to public needs and address the fundamental cracks in our economic management system. Once fully implemented, the policies will benefit the economy and more importantly families in both the immediate and long-term.
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