Introduction

The second budget of the Eighth Parliament was presented by Minister Saisnarine Kowlessar at its first sitting for the year 2002. Readers will recall that the 2001 Budget presented on June 15, 2001 was described as a half-year budget. The sitting was marked by the walkout by the entire parliamentary opposition, the first time since the 1992 return to democracy. In 2001 the PNC/R walked out of Parliament to protest the presence of Mr. Doodnauth Singh S.C who was Chairman of the Elections Commission for the 1997 Elections. This year the PNC/R along with their opposition colleagues staged a similar walkout, this time to protest the few, irregular and unproductive sittings of Parliament.

In what now seems a policy in itself, the Minister announced that there were no new taxes but there was some relief for cinemas and interior resorts.

In 2001, the Ministry of Finance saw a number of new faces including Mr. Neermal Rekha as Secretary to the Treasury and Ms. L. Baird as his deputy. Dr. Ashni Singh moved from the Office of the Auditor General to take up the position of Budget Director, while the long-serving Winston Jordan retained his position as Budget Advisor.

Despite the significant appointments, Minister Kowlessar still appears to be working in the shadows of President Bharrat Jagdeo who retains formal responsibility for relations with the International Financial Institutions, and who also makes most of the appearance and pronouncements which one would expect from the Minister of Finance.

In his review of Global and Regional Economies, the Minister referred to events of September 11, 2001 in the US, coming at a time when the US had slipped into recession. Describing the events as “acts of madness”, he noted that security concerns have leap-frogged the international agenda with ‘foreboding” implications for Guyana including postponement of the resumption of more robust growth in the economy.

The overall effect was a downturn effect across the world though a few countries including the UK performed creditably.

Unlike last year when the Minister complimented those interest groups who submitted proposals for tax relief and tax reform, this year he indicated that the Government was “only able to accommodate those (submissions) that will have a direct impact on the promotion of growth and the reduction of poverty”, hardly generous to all those who took the time and trouble to make submissions.  

While in the past two years the National Development Strategy (NDS) was referred to as the principal planning document, the Minister’s reference to it appeared to subordinate it to the Poverty Strategy Reduction Paper (PSRP) as well as the PPP/Civic Manifesto.

The NDS was claimed to provide the holistic vision for development out of which the PSRP was supposed to provide a meaningful participatory and effective work plan for poverty alleviation and eradication. There was no reference to the Poverty Reduction Strategy Credit (PSRC), a mechanism for funding small-scale enterprises.

Once again, voluntarily bound as the country is to the prescriptions of the IMF, the World Bank and Donor, the budget measures, policies and targets offered no substantial changes and again provided very few initiatives. Indeed, as noted on page 13 of this review, prior issues were inexplicably dropped while others were repackaged and restated with no indication of the reasons for their non-implementation. Important issues such as labour participation and unemployment appear to have achieved taboo status and for this year Amerindian Affairs receive no attention. 

Articulating perhaps the Government’s mission for Guyana, the Minister announced that the government would continue to work towards transforming Guyana from a low income, agricultural-dependence country to a middle income semi-industrial one. He gave no indication of the time frame to achieve this or whether the modest goal was a recognition of the country’s special difficulties.

Measured against the pre-budget expectations, the Speech would be a great disappointment. For the fifth year, there has been no movement in the income tax threshold with the effect that workers are now bearing the cost of inflation not only in the goods and services they buy but also in the nominal increases in their salary which make them taxable.