Budget Speech Mr Bulkan- 20123418 11 Apr, 2012
April 11, 2012
Mr. Bulkan: If it pleases you, Mdm. Speaker, I rise in relation to the Budget presented by the Hon. Member, the Minister of Finance, Dr. Ashni K. Singh, on 30th March, 2012 under the theme: Remaining on Course, United in Purpose, Prosperity for All. On the cover of the Speech itself carries a likeness of a cross – Hon. Member Moses Nagamootoo brought this to our attention yesterday - and so indeed it is for the Guyanese people who will have to bear the burden of high taxation, high rate of unemployment, declining standards of delivery of public services in areas such as health, education, water supply, electricity, public security, administration of justice, to name a few.
The Hon. Minister has presented the Government’s plan for management of the economy and national affairs, and in so doing has revealed its priorities and preferences. My first observation is that the poise, the self-assuredness, which I have seen the Hon. Minister display in earlier Sittings of this Parliament, and also being told of that very quality being characteristic of his previous budget presentations – and I believe there were five - was noticeably missing. This is instructive and it tells a story, I believe. It suggests to me that the Hon. Minister, at heart, does not believe the optimism he sought to project in his presentation. There are, of course, many valid and underlying reasons that would be responsible for his lack of belief in many of the rosy statements proffered, but I would venture to suggest that in a real sense it was the illegitimacy of the process itself that caused the Minister to lose the conviction which is usually present in his contributions in this House. The illegitimacy to which I refer has to do with the Government’s rejection of the will of the people as expressed in the Elections of 28th November, 2011 which called for a consensus Government.
While it is true that we, the combined Opposition, now have the opportunity and the power to agree to or to recommend modifications or to reject outright individual measures, how much better it would have been if consensus was sought before bringing these proposals to this House. After all, a majority of voters at the last Elections voted for us on this side of the House. Prudence, as well the democratic principle, which the Hon. Minister correctly urges as necessary to be the bedrock of our actions ought to have compelled him and the Government to have had meaningful consultation on deciding and determining national priorities. That the Government chose not to do so is ill advised.
Yesterday, as well as a short while ago with the Presentation by the Hon. Prime Minister, we were treated to a number of presentations from the Government side, from Hon. Min. Irfaan Ali, Mr. Manzoor Nadir, Min. Ali Baksh, Dr. Vishwa Mahadeo, and Rev. Dr. Kwame Gilbert. We continue to be regaled with much data, all suggesting that our country is on the right path, that much progress has been achieved, in recent years, on nutrition, child health, job creation, diversification of the economy, etcetera. Without exception, all of those speakers congratulated the Minister of Finance and sought to lecture us, on this side of the House, to similarly be smitten by Dr. Singh’s handiwork. Hon. Member Rev. Dr. Gilbert was more pointed. According to him, we must put aside political posturing and pontificating, incidentally “PPP” – I do not think he suggested that we put aside the People’s Progressive Party (PPP) and pass the Budget. He urges passage in its entirety. This is not what we, Members of the Opposition, are here for. This is not what the majority of citizens who voted at the last General Elections wants. We were not sent here to be appendages to rubber stamp any and everything presented by the Government. No! That status quo no longer holds. The people decided on the 28th November, 2011 that it must change and they have sent us here to help them out of their plight, their distress. The era, the long years when this House was treated as a rubber stamp is over. So regarding the Budget, as Hon. Member Moses Nagamootoo said yesterday, it will have to be reworked; we will have to bring out the scissors to excise inappropriate spending, cut out waste.
There was no mention, from the Government speakers, of the growing income inequality in our country, that which the Hon. Member, former Minister of Finance, Carl Greenidge, spoke about, the widening gap between “the haves” and “the have nots”, where presently the top 20% of the population earn between 47% – not 40% as I heard the Hon. Member, Minister Irfaan Ali, say yesterday and the Hon. Prime Minister say a short while ago... My understanding is that 47% to 60% and the bottom 20% just 7%. We are concerned about this sad state of affairs and we will work to correct it, as I am sure Hon. Members on the other side, particularly those men of the cloth who will be well aware of the biblical injunction that urges that we look out for the least among us. I am not a student of the Bible, Mdm. Speaker, so I stand to be corrected. I believe it is Matthew 25.
There was little or no suggestion, from the other side, of any middle ground. We are urged to adopt the proposals, accept the hypotheses, and pass the Budget in its entirety. They may have, however, overlooked the fact that the configuration of this House differs from all previous ones since 1992.
I will now look at the plans in the Budget for regional development, for allocations to the Regions. In this regard, in Volume 1 of the Estimates, a program objective is given and it is important for me to repeat what it says and this is in Regards to the allocations to Regions. It says, as the Programme Objective:
“To undertake the necessary consultation with the subject Ministries, RDCs, NDCs and AVCs regarding the implementation of any policy or development plan that may be determined by those agencies; and to give maximum support to programs, promote efficient and optimal use of resources and at the same time ensuring that all relevant guidelines are observed so as to achieve an acceptable level of accountability.”
These are but words, and for many of the RDCs and NDCs the practice and actions are not consistent with those words. I will later provide specific examples.
In volume two and under the section for Regional Development there is a mission statement which says, and this is for the Regions:
“To provide for the coordination and utilization of human and material resources within the Region, to promote quality services and sustainable physical and institutional infrastructures, and to enhance orderly development in the political, economic, social and cultural life of the people in pursuit of improved living conditions for the residents of the Region.”
The respective Regions address its mission through a number of program areas, these being regional administration and finance, agriculture, public works, education delivery and health services.
In volume three of the documents which we have been given, under the Public Sector Investment Program, under the heading of “Capital Project Profiles” it says:
“The executing agency for the respective capital projects to the various Regions is given to be the RDCs and not the subject Ministry. The profiles for these capital projects for the regions are listed as reference numbers 257 – 386, some 129 interventions, and for every one of them it says that the executing agency is the RDC. It is important for this to borne in mind as the practice in many instances is for the ministry to play the lead role via the Regional Administration and the REO who it appoints”
The three volumes of estimates submitted totaling almost thirteen hundred pages in so far as it relates to the coordination, management and development of the ten administrative Regions informs and declares that the lead role for this is the responsibility of the duly elected councils. This is how it should be and in fact is what the Constitution stipulates.
Article 74 (1) states:
“It shall be the primary duty of local democratic organs to ensure in accordance with laws the efficient management and development of their areas and to provide leadership by example.”
Article 75 says:
“Parliament shall provide that local democratic organs shall be autonomous and take decisions which are binding upon their agencies and institutions and upon the communities and citizens of their area.”
Importantly, Article 77 which mandates and states:
“The development program of each Region shall be integrated into the national development plans, and the Government shall allocate funds to each Region to enable it to implement its development program.”
Our Constitution which makes it possible for an individual to ascend to the powerful position of President of this Nation and with it the right to form a Government on his own, in the absence of the support of majority of Members of this Assembly imposes certain obligations on him or her. These obligations extend to the Government as well. It is deplorable therefore to recognize that in relation to the engagement with and management of the Administrative Regions that the Constitutional requirements are not being honoured.
The phenomenon to which I refer is the continuing and current control being exercised by central Government through the Ministry of Local Government and Regional Development and via the REOs that they appoint. Others speakers have touched on the lack of qualifications that are identified for the holders or these positions. These REOs operate like tin-gods and the further away they are from Georgetown, the more out of control they behave. My colleague the Hon. Member Desmond Trotman referred to this yesterday. Also, yesterday during the recess I was informed by the Regional Chairman of Region 8, Mark Crawford, that the REO of Region 8 has been going about the Region informing persons that they have to be thought a lesson and presumably this is because the majority of citizens in that Region did not vote for the PPP. They are encouraged to act with impunity by the minister who appoints them and in many as well as the majority of cases do not see it as their duty to be an officer of the RDC or the clerk of the council. In other words, they see themselves as masters and not as servants of the RDC. These elected bodies and councils are somehow seen as hindrances or nuisances, they are tolerated not accepted. It reminds me of a refrain from my childhood, the one that goes “children must be seen, not heard”.
If the RDCs are allowed to act in a truly democratic manner and if they are meaningfully engaged by the Central Government, and if genuine and sincere collaboration exists then a lot of the unhealthy things that are taking place, things which do not serve the public’s interest, some of which we heard yesterday, for example the deficiencies at the $2.2 billion Linden Hospital, and the $1 billion Georgetown in-patient facility which was mentioned by Hon. Member Vanessa Kissoon and Dr. Norton, like the fiasco of the Supenaam or Good Hope Stelling which was built some three years before the arrival of the ferries that were to use it, and for which $416 million is being sought for modification of this and the Parika Stellings before these vessels can be used. Yet, Hon. Member Minister Ali Baksh boasted yesterday about these two ferries, citing them as a sign of progress but without a word about the lack of planning, the Stelling fiasco. There were just self congratulations and no respect for the concept of value for money, a lamentable wanton disregard for efficiency or the efficient use of scarce resources.
The delinquency, however, extends way beyond this operational aspect and aberration and goes to the top, to the honouring in the breach of Article 77, which as I have just articulated, mandates that the development program of each Region must be integrated into the national development plans. It imposes on the Government a duty to allocate funds to each Region to enable its execution. It needs to be stressed that the lead role for the creation of the respective development plans is the responsibility of the duly elected RDCs, and not the Central Government’s Ministry, and this is why our National Elections are both general and regional. If you recall, the ballot is divided in two and voters are asked to marks two “X”s. So, the Constitution tempers the near imperial powers inherent in the presidency by way of these ten RDCs each having a Regional Chairperson. Proper observance of the Constitution would see these ten Regional Chairpersons collectively having a status superior to the Cabinet.
The Constitution does not say that Guyana is a unitary State; rather it says in Article 1 that, “Guyana is an indivisible, secular, democratic sovereign State”. In Article 9 is says that, “sovereignty belongs to the people who exercise it through their representatives and the democratic organs established by or under the Constitution”. It further says in Article 12, “local Government by freely elected representatives of the people is an integral part of the democratic organization of the state”. The Constitution could not be clearer as to the role, authority and scope of Local Government and Local Democratic Organs. I might add that the campaign of the Ministry of Local Government and Regional Elections which seems to be in full swing whereby elected NDCs are being dismantled and dissolved and replaced by unelected bodies called IMCs is unprincipled and undemocratic, obnoxious and offensive and the Government should desist from further eroding the rights of citizens and their will expressed in democratic elections to choose their own councilors to manage Local Government Affairs.
Let us now examine the Estimates in relation to allocations in the Regions. The total allocations for the ten Administrative Regions amount to $20.37 billion. It represents about 10% of the National Budget. It is made of $17.9 billion for current expenditure and the sum of $2.4 billion for capital expenditure. The $2.4 billion for capital expenditure represents just 1% of the total budget.
The question is whether this is the Government’s understanding of the Constitutional requirement for the Regions to be given the resources to foster their development? The answer has to be “no”. We say this must be the last year that any Government violates the dictates of the Constitution. The total capital subvention for municipalities and local community councils, all of the NDCs, is a mere $282 million. The Local Government Reform Task Force identified fiscal transfers according to their needs as necessary for the proper functioning of these bodies. When we compare this to $1.1 billion that was awarded as a security contract from Central Government to a few private security firms for security services to premises in the regions we can see a disconnect. This has to stop. We have to treat the issue of widespread and pervasive poverty and high unemployment present with the seriousness that it deserves. If we do not then our people will continue doing what they have been doing for decades and decades, which is to migrate, seek their fortunes elsewhere, anywhere. This is why Guyanese can be found everywhere in the world, not only in the big countries but tiny ones as well, in Dominica and perhaps even the Dominican Republic, Anguilla, Montserrat, and the tiny, Nevis. If we do not create the conditions that allows for people to lead a better quality of life and to enjoy a higher standard of living, then our best human resources will continue to flee.
The invidious practice of undermining the authority of RDCs takes many forms. One of it is the funding of projects through various ministries e.g. The Office of the Prime Minister, Ministry of Agriculture, Ministry of Amerindian Affairs, Ministry of Culture, Youth and Sports, Ministry of Health, Ministry of Housing and Water. Take the case of Basic Needs Trust Fund which comes under the Ministry of Finance. The allocation proposed for this Fund in this budget is $910 million which is almost 40% of the total capital budget to all 10 administrative Regions. This provision is for implementation of programs in areas such as health, community roads, water supply, etc. It represents partial funding for capital projects targeted to cost $5,505,903,000 and includes, among others the following:
1. Completion, construction, rehabilitation and extension of:
a) Education facilities including Kako and Paramakatoi Primary Schools, BV, Diamond, Ithaca, Number 77, Tuschen Nursery Schools and Annai Secondary School.
b) Roads infrastructure in areas such as Paradise, BV, South Amelia’s Ward, Leguan, Mon Repos and Stewartville.
c) Water supply in areas such as Wakenaam, Goed Fortuin, Mashabo, Wikki, Canefield, Annai, Kimbia and Wiruni.
d) Health facilities in areas such as Haiowa, Experiment, Number 53 Village, Kamarang, Yawong and Potarinau.
2. Construction of a daycare centre at Hururu.
It is important to recite this as it highlights activities that are undertaken by Central Government which ought to the responsibility of Local Democratic Organs.
If the Government is to operate in accordance with the requirements of the Constitution then these projects and interventions must originate from the Regions themselves which must be responsible for its execution, implementation, monitoring, et cetera. This program and these projects in particular coming under the authority of Central Government in the absence of some overriding reason is really but one means of subterfuge employed to miniaturize and marginalize the authority of local democratic organs, as dictated by the Constitution. This practice must come to an end. The responsibility for administering affairs in the Regions must go to the local democratic organs, in this case the RDCs, NDCs, etc. Excluding these bodies increases the potential for inefficiency, waste, corruption et cetera, previous speakers have referred to this. This phenomenon applies to other Ministries as I have said. The Estimates seek approval for the sum of $720 million for a “Poverty Program” and provision for poverty alleviation and community development projects with the executing agency being the Ministry of Finance. Budgeted allocation for these two programs, the Basic Needs Trust Fund (BNTF) and the Poverty Program, which totals $1.63 billion represents 68% of the total allocations for capital projects in all ten administrative Regions. We are sounding a warning to the Government that this practice of breaching provisions of the Constitution must cease. The creating of these slush funds allied to the bypassing and undermining of local democratic organs will have to end. The people must be engaged and be involved to protect their interests, as the Constitution demands, and projects in the Regions must not be the sole responsibility of a handful of unelected Ministry officials.
Let me use an illustration. The total budgetary allocation for Region 8, Potaro-Siparuni, is $823,688,000 with current expenditure being $681,425,000 and capital expenditure at $142,263,000. Let us ignore for the time being the fact that the paltry sum of $142 million is allocated for total capital expenditure in this entire Region, a sum that is less than 1/3 of what has been spent so far on a building a few corners due south of where we are, a building that threatens to be decrepit and derelict before it has ever been used and we get a sense of the misplaced and cruel priorities of this Government. I see that the sum of $310 million, capital project number 31, is being sought for modification of a building, purchase of furniture and equipment and provision for institutional strengthening for the GRA. The total project cost is given at $652.273 million. According to the documents apart from the modification of a building which location has not been given, the project provides for a diagnostic study of the trade transaction environment in Guyana in order to implement the single window automated processing system.
Over $654 million is allocated for some amorphous building or diagnostic study, which is almost 80% of the total allocations to Region 8. Another $300 million is set for the Skeldon Sugar Factory and this is apart from the $4 billion injection, $60 million for upgrading of playgrounds, Capital project 33, with the executing agency being the Ministry of Finance and not local democratic organs, another $100 million for capital project 34, for which all we are told is that it is for strengthening public financial management and financial sector reform.
I was saying that the $142 million total capital expenditure for Region 8 is less than half of what has recently been announced to be spent to repair roads in Mocha. I hope that the repairs are not like the repairs to roads in Lusignan that were done on the eve of last November’s elections. Recently, I was in Lusignan and these very roads are back to being full of craters and potholes. [Mr. Neendkumar: Which one of the roads?] In Lusignan, Hon. Member, the main road leading in to the prisons at the back. Waste, incompetence, corruption!
The point I wish to make is that $823 million is the total allocation for Region 8. Of this amount the sum of $172 million is for health services, comprised of $137.6 million for current expenditure and $34.5 million for capital expenditure. Let us examine what the Government’s idea of providing health services to residents of the Hinterland is. Of this sum of $137.6 million budgeted for healthcare in Region 8, the grand sum of $1.8 million or 1.3% is for drugs and medical supplies; it is a travesty and obscenity. This is a Region that is being ravaged by malaria and other diseases arising from the gold rush and uncontrolled and unregulated mining activities. The Hon. Speaker was in that Region recently, and upon flying into Mahdia he would have seen the spoilt landscape. Imagine therefore what is happening to the people there?
Only $1.8 million dollars is allocated for drugs and medical supplies for this entire Region. No wonder that when the Vice Chairman of Region 8 Cornel Edwards, himself a qualified Medex, recently visited villages he was screaming for basic drugs: aspirins, multivitamin tablets, malaria drugs, treatment for diarrhea. Yet billions upon billions are being spent but the people are neglected. This aberration is by no means confined to Region 8. On January 25 this year there was a letter in Stabroek News written by Winston Peter, an Amerindian of Region 9 complaining about what he referred as the, “shabby health services being provided by the Lethem Public Hospital”, where according to him, drugs were not available and apparently so for the longest while. Yet Mr. Peter says that Government officials boast of the Lethem Hospital being a state-of-the-art hospital but his grandparents who sought medical assistance there could get none. “Where is the care and concern for our people” he pointedly asked in that letter. This case illustrates the lack of understanding for human needs and concern for human development. But yet we have heard much lofty rhetoric about progress on millennium development goals and how much has been achieved. These are but words. Stabroek News did forward a copy of that letter to the honourable Minister for any comment he might have wished to make. What was his response? I can tell you that up to April 5th, which was a week ago, there was none. Mr. Peter said that what transpires at that hospital is a “do not give a damn attitude” towards patients. It would appear that that attitude is not confined only at the hospital. Incidentally, yesterday in the Kaieteur News – the Hon. Prime Minister did accuse the Kaieteur News of practicing wickedness a short moment ago – there was an article about the very Lethem Hospital not functioning to the expectation of residents. There is photographic evidence here of what obtains in that state of the art hospital. The article is quite detailed; it was yesterday’s edition of the Kaieteur News.
The lesson to be learnt from this is that Guyana is a large country and cannot be effectively run where all decisions are made in Georgetown. [Mr. Neendkumar: Have you ever been to Lethem? You normally go to Florida] If you go there Sir, you will learn something. We have to decentralise. The Regions have to be granted autonomy. The constitutional provisions which mandate this were not arrived at in a vacuum; rather it was out of recognition of the realities, out of years of experience, and perhaps oftentimes bitter ones. When people are empowered and are allowed to elect their own leaders to manage community needs then the best talent will emerge, the cream will rise to the top. There will be no square pegs in round holes. This is how we will develop; stop the exodus and hemorrhaging of our best human capital.
The Hon. Minister and these documents tells us that 1,729 solar panel systems were distributed last year under the Hinterland Electrification Program – the Prime Minister spoke about this as well – and that a further 8,000 will be distributed this year. The RDCs are not engaged in this activity. Our position is clear and it is that the RDCs have to spearhead and be involved if transparency is to be ensured so as to avoid what happened after the last elections where residents in Chenapau and Kopinang were threatened with repossession of these solar panel systems because apparently they did not vote for the PPP.
There is a lot of tomfoolery in this budget. $235 million is budgeted for something called the Competitiveness Program. Total project cost is given at $1.8 billion of which $891 million has previously been spent. This project we are told is designed to improve the competitiveness of businesses and to enhance exports. Yet we see all the major sectors of the economy in distress. The forestry sector is in shambles, having regressed to primary production. With very little value added production, log exports now dominate the sector. In manufacturing it is no different. It is the same in the sugar industry. Fishing is down 5.3%. The economy is structurally unbalanced; it remains driven by primary production.
Yet, amazingly this is what the Hon. Minister Dr. Ashni Singh says in his budget speech:
“Much effort is being devoted by the Government to make the Guyana economy more robust and resilient, better able to withstand external shocks and less vulnerable to the viscidities of domestic single industry upheavals.
We have done this by aggressively promoting the development of a more diversified production base and by advancing an agenda for improving national competitiveness.”
Where is the evidence, however? What we see is that total exports for rice, sugar bauxite and timber amounts to US$469 million compared to gold exports which earned US$517.1 million. Gold alone has earned 10% more than sugar, rice, bauxite and timber combined; a single extractive industry with no value added component benefitting fortuitously from high world market prices. This is what one would call a disaster waiting to happen. We have to get real, get serious; stop taxing and spending with reckless abandon. Only national consensus can save us.
As a country Guyana consistently produced more sugar in the 1950s than we have in the past four years, and this in spite of massive investment in that industry. The highest production in the last four years was last year – 236,506 tonnes. In 1952 the production was higher – 60 years ago. In 1960 the industry produced over 300,000 tonnes. The time for excuses is long over. We have to remove our heads from the sand.
This budget is indeed large. It seeks to spend $192 billion, almost US$1 billion. This is a lot of money; money which comes from taxing the nation, from the pockets of everyone. Much can be achieved with this kind of expenditure, but it calls for a relevant and appropriate vision, one that is sadly missing. It requires an understanding of our resources, both human and natural, and a genuine desire to invest in our human capital. Finding oil is not the answer nor is the state investing to build a hotel the way to go. We have to invest in our people. This is what this budget lacks – a sense of human development.
Hinterland residents are plagued with peculiar problems. These include very high cost of living, poor infrastructure, lack of jobs, poor water supply, and no market for their produce. The economy of indigenous communities is largely unbalanced; and care and sensitivity are required to address the many problems of residents in the hinterland. They cannot be left to their own devices. We cannot allow others to go into these areas and communities, take out the wealth and not factor in that in many instances the traditional way of life of those persons is literally under threat. We have to focus on human development; that is what we on this side of the House will do.
The theme of this budget begins with the words “Remaining on Course”. The Leader of the Opposition the Hon. Brigadier (Ret’d) David Granger’s initial response immediately following the presentation was that it represents continuity at its worst. This observation is spot on. But having looked at the massive amounts to be spent and where it is going I would say a more appropriate title would be ‘cash for cronies and contractors’.
Mdm. Speaker, I end by restating that this budget would have benefitted from meaningful consultation and consensus. Finally I urge that we move away from rhetoric and embrace reality.
Thank you. [Applause]
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