The budget outlining the Government’s plans, programmes and expenditures for 2023 reflects Guyana’s increasing income from its rapidly expanding petroleum industry. At $781.9 billion, as against $552.9 billion for 2022, this budget is 41 percent larger than 2022. The 2022 budget was in turn larger that the 2021 budget by 44.3 percent. This budget was facilitated by an economic growth of 62.3 percent in 2022. The 2022 budget was facilitated by a growth rate in 2021 of 19.9 percent.
It is safe to say, notwithstanding the sniping on the sidelines, that Guyana is on the move. The health sector’s budget this year is $85 billion, up from $73 billion in 2022, whilst the education allocation is $95 billion, up from $74 billion in 2022. Each of these sums for 2023 is larger than entire budgets of the recent past and attest to the transformative impact of an exponentially growing economy. When complaints are made that there is little to show in the budget to alleviate poverty, these expenditures are ignored. Yet, improved medical and educational facilities directly benefit the poor in substantial ways.
Other measures include raising the income tax threshold, increasing pensions, increasing public assistance, cash grants generally and to school children, creation of part time employment and its expansion, reduction or elimination of the excise tax on gasoline thereby reducing or, at least, holding steady the cost of travelling. Extra-budgetary measures include increasing the minimum wage, a 7 percent increase in salaries for public servants, increases in benefits for selected groups such as nurses and members of the disciplinary forces, bonuses and other measures. Increases in wages in Western countries battling inflation, like Guyana, are at 2 percent or in that vicinity.
About inflation, the complaint is contradictory. On the one hand, it is suggested that the increase in salaries is insufficient to contend with inflation. On the other hand, it is complained that nothing is being done about inflation. Every Tom, Dick and Harrylall knows that reckless increase in government expenditure by way of wages and salaries without expanding production is one of the major ways to fuel inflation. In Guyana, however, production is increasing so that the generosity of the government in providing a 7 percent in wages and salaries and a prediction of the 3+ percent inflation for next year is based on scientific reasoning. Critics ought to pay attention to a thoughtful letter by Louis Holder in Friday’s SN on the subject of inflation.
The 2022 budget provided $67.9 billion for infrastructure – roads and bridges. The budgeted figure for 2023 is $136.1 billion, which is 100 percent more. The criticism is that the size of infrastructure spending relates to the desire of the government to provide a fund from which its ‘friends’ and ‘cronies’ can corruptly benefit. What trash! Guyana’s inadequate and dilapidated infrastructure on the coast, and its virtual non-existence in the hinterland except at a modest level to facilitate mining, could not be missed by anyone. This condition is a substantial hindrance to economic development and, if corrected, will aid the elimination of poverty. It is not known if the argument of the naysayers is that the infrastructure spending should be restricted to reduce or eliminate corruption. That would be a weird proposition based on warped thinking, having regard to the fact that increasingly large infrastructure spending would be required in Guyana for the foreseeable future. The issues of nepotism and corruption and fairness in distribution of contracts are completely different matters.
A total of $54.5 billion has been set aside in the budget for housing development in new and existing areas, including the construction of roads, bridges and utilities. The sum of $12.4 billion was allocated in the 2022 budget. The budget for housing 2023 is in excess of four times the size of the budget for 2022. The expansion of home ownership, particularly for low income families, and even the granting of free homes to some squatters such as those at Mocha/Arcadia, will make a significant impact on poverty. It is accurate to suggest, however, that the 48 percent at or below the poverty line calculated at US$5.5 per day, based on Guyana’s high GDP, cannot afford to acquire a house. In this regard the government should begin to plan for the construction of houses for rental to low income families who cannot afford a low cost home. Such a project in all areas, managed by the NDC’s on strict criteria, will substantially reduce poverty as well squatting.
The 2023 budget is based on the expectation of a GDP heavily influenced by petroleum production. Currently, petroleum production stands at approximately 345,000 barrels a day. By 2025 production is expected to reach 700,000+ barrels a day and by 2030, 1,000,000+ barrels a day. Therefore, by the end of this decade, government expenditures by way of budgetary allocations would likely be at least three times what they are today. A decade of such expenditures will transform Guyana into a different country. It will help to economically lift the Caricom Region and create a greater voice and role for Guyana in the Caribbean and Latin America. Guyana needs to begin preparing itself internally for this new and elevated role in external affairs in the years ahead.