OPINION: The 2024 Jagdeo Budget Part 2: Now you see it, now you don’t! 

Last Updated on Monday, 5 February 2024, 19:05 by Denis Chabrol

By Retired Rear Admiral, Gary Best; LLB; LEC; PhD. 

In Part 1, I pointed out that it is Jagdeo’s signature that appears on the Bank of Guyana notes that we spend. I concluded therefrom that he is really the Minister of Finance. One thing is for sure, the 2024 Jagdeo budget is about ‘grand’ numbers and percentages. Unfortunately, there is no clear structure that points to medium- or long-term certainty. No clear policy statement to indicate that the budget numbers are linked or indexed to any known values.  Further, this Jagdeo budget is not set within any long term nationally ‘agreed to’ strategic and national development plan. As poignantly put by Shadow Attorney General, Roysdale Forde, “… the government is not engaging in any careful conception and analysis, any careful planning as to what a budget really means … there is no coherent overarching plan…as to where we’re going.” Neither does it relate to known development indicators and measures that signal to the Guyanese family, it is for them.  It’s more like a three-hand poker game, ‘now you see it, now you don’t’. Put another way, it is a one-sided budget that is indexed to Guyana’s anticipated revenues from oil sales. ‘One Guyana!’, when, where? And for whom?

Another certain feature is VP Jagdeo’s confession that the budget is “… based on windfall revenues from the oil and gas sector” followed by a curious expectation of “… a significant growth in capital expenditure and a tamer growth in recurrent expenditure.” But, then again, this is a bit convoluted since increased capital expenditure requires increased maintenance within the current expenditure portfolio. Otherwise, the capital items constructed will collapse for want of adequate maintenance. There is no evidence that such costs diminish over time. In fact, such costs increase over time.  The PPP’s plan is to spend now from raw oil revenues, and not later. Rather than spending profits from invested oil revenues.

Underpinned by a 60% infrastructure priority, this budget is not geared to reduce poverty or income inequalities, nor increase wages and salaries or better health care. In pure economic sense, acknowledgment of inequalities allows for the establishment of a baseline for its reduction. Sadly, this is not the case. Consequently, most of these monies will go to the ‘haves’ leading to a further widening of the inequality gap and the further construction of an unequal society.

Simply put, the Jagdeo budget that puts projects before people. It’s a budget that focuses on costs, rather than adding value. Further, there is no price stabilization mechanism in this budget. Neither is it clear about its underpinning fiscal/economic development philosophy/theory. Whether it is neoliberally driven, where the market corrects itself, or part neoliberal, or a mixture. Or worse, is it based on the infamous ‘trickle down’ theory? And the PPP government wants us to believe that a G$80bn gas to energy project (Gte) will be a success, against this backdrop and that of the failed Skeldon and Amaila Falls energy projects. To quote Jagdeo, that’s “pure nonsense”. Moreover, if the Gte is so profitable, why isn’t Exxon, or the private sector funding it? Why is the government using taxpayers money to fund it? The answer is simple. We the Guyanese people are de-risking the Gte project for the benefit of the elite PPP class. 

While the PPP administration plans to spend 60% of the budget on infrastructure, the Guyanese family continues to slide into more and more poverty. Access to capital by the average Guyanese family has not moved one inch in this G$1.14 trillion budget! And for the Minister responsible for Finance to say that the average Guyanese family can collateralise their house lots to raise capital is absent reality and dystopian. Guyanese families who qualify for government house lots struggle, on their meagre salaries, to qualify for loans to build their homes, not businesses. On the contrary, the government should use the “windfall revenues” from the oil economy to build complete subsidized homes for Guyanese families. That’s called development! 

Terms like policy framework, policy predictability and stability, policy choice, and policy response abound the pages in the budget. It sounds good, but it’s all a sham. 

What is the value of a monetary policy that increases income inequality and corruption? What is the value of an economic policy that increases poverty, restricts capital to elites, friends and families and a contractor class? What is the value of a national food security policy when the Guyanese family can’t afford to buy the basic food items needed for a healthy lifestyle? What is the value of a foreign policy that left Guyana without diplomatic clout, exposing the nation to annexation threats and settlement incursions from Venezuela? 

Further, what is the value of a trade policy that does not result in a private sector that is incentivized enough to produce goods for international export and lead in a midi national industrialzation? Clearly, the PPP’s policy practice conflicts with international understanding that policymaking is an approach that requires an optimal balance between short term imperatives, and medium- and longer-term considerations. To be clear, the Guyanese family needs policies that lift them out of poverty. Not policies designed to manage their poverty! 

Finally, the VP should be mindful of using static analysis by referencing what APNU+AFC didn’t do without the “windfall revenues” the PPP is now receiving as a means to justify this senseless spending upwards of 60% on infrastructure without any accompanying spending on capacity building of the public and quasi-public service in the areas of budget management, inspections, procurement oversights and audits of this vast sector. A budget for whom? Certainly not the thousands of public servants. Certainly not the majority poor Guyanese family! 

In Part 3, you will recognize that the Jagdeo budget is anti-people development. 

Dr Gary Best is a former Chief-of-Staff of the Guyana Defence Force, a Caribbean-trained lawyer and the holder of a Doctorate in International Relations. He is also a member of the Central Executive Committee of the opposition People’s National Congress Reform.