Budget Speech - Mr Irfan Ali—20145815 31 Mar, 2014
Mr. Bulkan: Thank you Mr. Speaker. I rise to make my contribution to the Motion before us, the one standing in the name of the Hon. Member Dr. Ashni Kumar Singh, Minister of Finance, and which seeks the approval of this Hon. House for the spending of $205-plus billion being the Estimates of Expenditure for Financial Year 2014. In so doing I am mindful and conscious of your reported remarks directed to Members of this House, urging that in making our presentation we be competitive and not destructive. If you were quoted accurately your exhortation was that we put aside petty personal and partisan differences and put Guyana first.
The latter, that is to avoid being personal, is easy to comply with, the former however is not quite so simple as this is serious business we are engaged in. To this I will say that I owe it to myself, but, moreover to the many thousands of my countrymen and women who have sent me and my colleagues here to robustly represent their interest. My fallen Comrade would have wanted this too, and I think of her as I make my contribution.
As a matter of fact, the Minister himself expected this and in his speech predicted that his Budget will come under the microscope or, in his words, will be dissected from every imaginable perspective. However inadequate, it may be I too, have a perspective.
It is true that a budget is about money, or moreover numbers. It is even more true though that the figures before us did not fall from the sky nor were they randomly plucked from a sack but rather are informed by a philosophy and tell of the priorities of the Government. It is because of my firm belief of the significance of the foregoing that I choose spend time addressing and assessing this question before turning to some of the figures.
With regard to the philosophy that underpins this Budget and the Minister’s observation that Budget 2014 is the largest budget ever, and having assessed the proposed allocations, I am reminded of my colleague, Hon. Member Mr. William’s plaintive cry in his 2013 Budget presentation when he pointedly asked, bigger for whom, the masses or a small cabal. The Minister boasts of economic growth but when we go into communities across our country, as we have been doing in the past 26 months, we have to ask where the development is and where are the jobs. The income and wealth disparity continues to widen within the society and dangerously so. The poor both employed and unemployed are being left behind and their ranks are swelling. This Budget does not present a vision to correct the structural imbalance of the economy, and to show the way to the good life which our people deserve. The economy is highly dependent, some may say un-healthily so, on just two industries, these being gold and rice, with gold accounting for 47% of total 2013 exports and rice 17.5%. Together they account for two-thirds of all exports. This reliance is not expected to change in 2014 and the Minister’s projections show gold exports to remain at 47% and rice, marginally less, at 16%, again representing almost two-thirds of total exports. Yet the Minister speaks of transforming the economy, and of progress made in diversification, but figures do not lie. Should we as a nation be concerned about this Mr. Speaker? I say we should. I am no prophet of doom, but the simple truth is that no one can predict the future world market price of gold, and it is unwise to plan an economy on so tenuous a foundation. What is going to happen to the many thousands who now depend on this industry to feed themselves and their families should gold prices head south? Where is the cushion going to come from to save them from possible indignity?
It is because a budget is not a book-keeping exercise, but an executive function or responsibility that I am spending time looking at this document which promises a better Guyana from this perspective, as opposed to focusing on the minutia or the numbers contained in it. In any event, we will have seven days to scrutinise each line item. Let me look briefly therefore to the sugar industry.
The Ministry informs us that the Government has injected $9.7 billion into this industry over the past two years and Budget 2014 seeks the approval of this House to transfer a further $6 billion to GuySuCo. What is the basis for this request? Let me not interpret or paraphrase the Minister but quote him directly. These are the Minister’s words accompanying his request for a further $6 billion:
“With a soon to be appointed new board of directors and senior management, and the injection of more innovative thinking into both the strategic and operational challenges that continue to beset the industry and the more harmonised industrial climate, the emergence of a revitalised sugar industry is anticipated.”
The APNU has previously expressed our concern at the massive transfers to GuySuCo as well as to GPL in the absence of a bi-partisan agreement on appropriate reform proposals. In the absence of this we see these transfers as a handout. In the meantime the industry produces less and less, and last year exported a mere $112 million - there are actually contradictory figures in the speech because under Appendix 5 the figure of $114 million is given. The Minister may wish to correct this, decide which one is correct - or less than 20% of gold exports, and the projections on for this year is for it to earn even less or US$103.3 million.
This Corporation has produced so many turn around plans in the past decade that one industry export has opined that it is in danger of getting high-turn. In the meantime the Minister is seeking to transport us to utopia and himself has donned the cap of Voltaire’s character Pangloss. There is rhetoric and there is reality.
As for the rice industry, the figures give cause for even more concern. Sales of rice and paddy under the Petrocaribe arrangement for the period July, 2011 to January, 2014 totalled US$336.5 million which represents 77% of total rice exports in 2012 and 2013. Given current events and political instability in Venezuela, no one can be certain that these arrangements will remain in place in the long term. In the absence of other available markets the potential for dislocation and disruption to this industry is real. [Interruption] When we are in the government we will get more markets. So while the Minister boasts of economic growth, macroeconomic stability and of diversification, the economy has a structural imbalance.
I turn my attention to the Ministry of Local Government and Regional Government, what is now a mega ministry. The first thing we need to establish is what is supposed to be the role of this Ministry and to see if its actions are consistent with same. Its role is defined or more like circumscribed by the Constitution and in particular in three of its articles.
Article 75 which says:
“Parliament shall provide that local democratic organs shall be autonomous and take decisions which are binding upon agencies and institutions, and upon the communities and citizens of their areas.”
Article 77 which reads:’
“The development programme 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 programme.”
And Article 77A which says:
“Parliament shall by law provide for the formulation and implementation of objective criteria for the purpose of the allocation of resources to, and the garnering of resources by local democratic organs.”
In conjunction with the foregoing, we have to refer to the Fiscal Transfers Act which was passed in this House in August of last year, and assented to by the President in November of 2013. Section 6(2) of this Act states:
“In arriving at the determination of the annual subvention from Central Government to local authorities, it is acknowledge that Central Government has responsibility to provide financial resources to local authorities to supplement their own revenues, and in order to assist them to discharge their functions and responsibilities.”
There are 81 of such local democratic organs. [Interruption] My Friend, if you listen, you will learn. Ten of these are Regional Democratic Councils, six municipalities and sixty-five Neighbourhood Democratic Councils (NDCs), and the Constitution says that they shall be autonomous which means having the freedom to govern themselves and to act independently. The role of this Ministry, therefore, is to provide support to these 81 democratically elected councils, not to seek to suffocate them and certainly not to undermine or marginalise them as it currently happening.
While the Constitution states that these councils shall be autonomous the Central Government is using its steel heel via REOs, clerks in the case of our municipalities, and overseer in the case of NDCs, to subvert the authority of these organs in a naked display of despotism. The equivalent of this would be a Permanent Secretary exercising more authority than his or her subject Minister, or of all of the Permanent Secretaries as a collective dictating to the Cabinet. This is the absurdity of what prevails with regard to local democracy and the functioning of local democratic organs. It is the Government which is refusing to hold Local Government Elections to have the life of these councils renewed, yet the Minster comes to this House and uses incendiary and unbecoming language, like comatose to describe these bodies.
The Minister seeks $1 billion to fund a programme he refers to as a clean-up campaign, which in his words would be spearheaded by the Government. It is clear from the Minister’s speech that this allocation would not be given to the various councils as the law requires but, rather, the intention is for it to be dispersed directly by the Government and its collaborators. This is an invidious initiative and one designed to make the existing councils look bad. Its purpose can be only to score political points; it represents the height of lawlessness. It is not really about a clean-up campaign; it is part of an elections campaign. Instead of being part of the solution, the Government chooses to be part of the problem.
Let us examine the allocations to this mega-Ministry from 2012 to now. I am looking at just current expenditure which represents employment cost, and something which is referred to as Other Charges; no capital expenses. In 2012, the allocation was $278 million; in 2013, $325 million and in 2014, $333 million under Programmes 131, 132 and 133. When we look at the stated objectives for the respective programmes we begin to appreciate how misguided the Government is. Programme 131, Main Office, the programme objective as described in the budget says:
“To ensure the successful implementation of the Ministry’s plans, policies and development programmes in accordance with good governance, facilitating infrastructure and human resource development in the regions.”
Incidentally, this programme has a total staff of seventeen persons and every one of them is a contracted employees, but that is a different story.
Local government is about local democracy, it is not about what Central Government wishes, that was perhaps the old construct prior to the enactment of the 1980 Constitution and of the strengthen provisions relating to local government in the amendments of 2001. I have already related Articles 75 and 77 which provide for local democratic organs to be autonomous and that the Government is obligated to allocate funds to each region as well as other local organs to enable them to implement their development programmes. [Interruption] You will have your turn Madam; you will be able to answer. But the Government comes to this House and says it wants money to implement the Ministry’s development programme. Here we have one unit undermining and subverting the authority of 81 statutory bodies; the centralist perversity. This degrading of the authority of local democratic organs does not stop there, there is a whole parallel structure that now forms part of this unlawful framework. And here, I am referring to the overwhelming authority of public agencies among these being the sea defence, National Drainage and Irrigation Authority (NDIA), Lands and Surveys and the Environmental Protection Agency (EPA). In local communities, the experience is that they exercise enormous authority without any duty or obligation to consult with local democratic organs in dispensing national resources or direct local ones to their friends. The Government has recently added to this mischief with another body under its control called anti-litter regulations with litter wardens doing what is the job for local democratic organs. This addiction to control is immoral. [Interruption]
This Budget proposes and allocation of $795 million under line item 1900400 with the executing agency being the Ministry of Finance the project description...
Mr. Speaker: Hon. Members it is unfair to Mr. Bulkan for a sub-debate to be going on over his head. Go ahead please, Mr. Bulkan.
Mr. Bulkan: Thank you Mr. Speaker. This Budget proposes the allocation of $795 million under Line Item 1900400 with the executing agency being the Ministry of Finance. The project description shows that it is for interventions in communities countrywide. There is something called a poverty programme with a proposed allocation of $725 million. This programme we are told is to provide support to vulnerable groups through community development programmes and projects. There is a Youth Initiative Programme with a budget of $69 million; again we are told for small community driven infrastructure projects. So right here there are allocations totalling $1,589 million almost $1.6 billion for community projects to be executed by another central government body. What is the capital subvention for 71 local government organs? It is $359 million or less than one quarter of this single component under the Ministry of Finance.
In response to parliamentary questions asked by my colleague Mrs. Lawrence we learn that for 2013 allocations under this so called Poverty Programme $15 million was given as support to the National Director of something called the Community Development Council (CDC). Unless I am mistaken, the national director of this body is Ms. Philomena Sahoye-Shury also known as “Fireball.” I do not know if this so called CDC is a statutory body as it does not exist in any of the local government legislation, namely Chapters 28:01, 28:02 or 28:09. But why should we have a CDC when there are already 81 statutory bodies which are being underfunded? What I do know is that the CDC Director has been going about the country assisting in dismantling elected bodies, that is NDCs, and replacing them with appointed ones or Interim Management Councils (IMCs). This is not a fireball but more like a wrecking ball.
Among the activities funded in 2013 under the Poverty Programme, were $71 million through Public Works Ministry to clean up sections of Georgetown; $16 million for the now infamous San Jose Bridge in Moruca, which I believe my colleague, Mr. Harmon, will speak about, and $54 million to host the National Toshaos Council (NTC) last year. Of course, much of the NTC meeting was devoted to bashing and vilifying the majority of this House.
This Programme is aptly titled as it is named Poverty Programme and not anti-poverty programme. It is being used however as a massive slush fund. The problem gets worse as in 201 the Constitution was revised and new provisions were introduced, as I said earlier, to strengthen local democracy. One of the new constitutional Articles is 78A which requires the establishment of a Local Government Commission. The article reads as follows:
“Parliament shall establish a Local Government Commission, the composition and rules which empower the commission to deal with as it deems fit, all matters relating to the regulation and staffing of local government organs and with dispute resolution within and between local government organs.”
It took the PPP/C 12 years for the legislation to be enacted to allow for this entity to come into being. It finally happened in August of last year with passage of the relevant bill and which received Presidential assent in early November, 2013. This Act, however, is waiting on a commencement order from the subject Minister for its operationalisation. Even though it is thirteen years since the Constitution dictated that we have this body the Minister is unmoved and apparently unconcerned. The Budget speech makes no mention of funding for this important constitutional entity designed to professionalise and de-politicise the management of communities. Instead, the Budget Speaks of bypassing the statutory responsibility of local government bodies and for Central Government to spearhead the clean-up of communities. The Government is making a mockery of democracy. The phenomenon of which I speak is real, not imaginary, and I can assure you that my surname is Bulkan not Quenotte.
Let us look at how Central Government actions are leading to underdevelopment in the regions and to hardship for our people. I will use Region No.8 as an example, and what happens there applies to all 10 Regions, but particularly regions where the PPP/C does not have a majority on the RDC. The action that I refer to is that of sidelining the RDC from administering the affairs of the region as prescribed by the Constitution. In 2012, $8 million was approved under line item 2402200; $5 million of which we were told was to purchase a Bedford Model M truck to be used for health services in the Region as well as to take drugs into the Region. Two years on there is no evidence of this truck, and the health committee of the RDC has not been given any information as to why this is so. It is suspected that what was bought was another pickup, PRR 3520 – I have pictures of it here – for exclusive use of the REO even though he had a perfectly functioning vehicle, PNN 9505.
Both of the vehicles are here. Is it a truck for the benefit of the region or a new status symbol for the REO? The question has been asked, who is to benefit from these bigger and bigger budgets, the masses or a privileged few? The philosophy seems to be, “to him that halt shall be given”. Meanwhile we are advised that the Region’s vehicles are being used to doing party political works.
In last year’s budget money was approved for teachers’ quarters at Paramakatoi. I was there last week as part of APNU’s team that visited the North Pakaraimas. Residents there complained of this incomplete facility and the effects of students not having trained teachers at the secondary school. This time, both the Ministries of Public Works and Education committees are ignored – sidelined.
Again, in the 2013 Budget, $12 million was voted for an ambulance for the Mahdia Hospital. This ambulance is yet to arrive; there is clearly no urgency. A 4x4 double cab cruiser was bought last year, ostensibly for education. This vehicle, PRR 7145 – this is another one here.
What is the transportation provided for the head of this region, the Regional Chairman? Here it is, a fully air conditioned motor bike. Central Government’s message is clear and it is that they will handicap the statutory body and empower their officers. It is happening all over the country, as this iniquitous... [Interruption]
Hon. Member, Mrs. Garrido-Lowe, recently received answers to questions the posed concerning vehicles PKK 2288 and PLL 6278. These questions were repeatedly asked by the Regional Chairman to the former Minister and to the REO, but he was never accorded the respect of a reply. In any event $2 million was spent on PKK 2288 and approximately $1.4 million on PLL 6278, both in 2012. The thing is that PKK 2288 never returned to the region. It seems like it was lost like the Malaysian aircraft. Since its repairs or it’s so called repairs, PLL 6278 never worked properly. Here is a picture of PLL 6278. [Mr. Bulkan displayed the picture.]
Even something as basic as the supply of pure water is not being delivered to residents in many parts of the Region, despite what the Hon. Member said a short while ago. Due to insensitivity and incompetence on the part of the Government and its appointed officers, while elected officials are shut out from their lawful role of administering the region’s affairs.
Perhaps the most galling problem though concerns electricity supply to Mahdia, the administrative centre of the region and where residents presently receive a maximum of 12 hours daily, and have to pay $100 per kilowatt hour. In this budget the sum of $208 million is sought for power supply in Mahdia, Matthews Ridge and Linden. Later we will learn... [An Hon. Member: Linden?] Yes it says Linden – the Estimates. Read the Estimates. Later we will learn how much of this is designated for Mahdia, but what is certain is that it will represent a band-aid, when a win-win solution, as well as a permanent one, is already there. I refer to the Tumatumari Hydro-Electric Plant, on which a test run in 2012 established it to be functional.
Mr. Speaker: Hon. Member your time is up. You will require an extension of 15 minutes to continue.
Ms. Ally: Thank you Mr. Speaker. I move that the Hon. Member be given 15 minutes to continue his presentation.
Question put and carried.
Mr. Bulkan: While the Government has entered into a contract with a private promoter who has the knowhow for least of this facility, as well as a power purchase agreement, the contractor has so far been unable to raise the financing for the full rehabilitation of the power plant and to run the transmission line to Mahdia, mainly due to the unavailability of developmental capital locally. I say that given the importance of electricity and the presence of this facility in the reason, there can be no valid reason why the Government could not have found a way to see the facility become operational by way of a simple equity contribution and to benefit thousands of persons, by fostering development, as well as job creations. A mere $30 million would have been sufficient and not by way of a hand out, but as I have said, an equity contribution. We recall that massive concessions and incentives were given for Cricket World Cup in 2008, but it appears that the residents of Region 8 are second class citizens. This is why residents there have told me that they believe that they are a part of apartheid.
While we wait to hear from Government’s spokespersons why they could not have intervene to raise people’s living standards, I point them to Article 16 of the Constitution, which says that the State shall foster the development of such relevant forms of corporation and of business entities as are seen to be supportive of the goals of economic development.
We must not cherry pick those parts of the Constitution that suits our purposes. I can see no impediment to the Government’s intervention in a case such as this. This point is that were the Regional Democratic Councils (RDCs) engaged in the way the Constitution specifies this would have been a priority project for funding. Long before today the residents from Mango Landing all the way to Mahdia, would have had access to continuous and reliable supply of electricity at about half the price they are currently paying. Once more I say the problem is worst than what I have outlined so far. When the allocations are approved, the RDC is shut out from the award of contracts.
Further Parliamentary questions from Mrs. Garrido-Lowe finally revealed the contracts awarded in 2012 and 2013. In 2012, 96 were awarded and in 2013 a total of 102 contracts for all types of works throughout the region. These contracts were awarded by a Central Government body called the Regional Tender Board from which elected officials of the RDC were excluded. This is the aberration that the Government practices. I say shame on you.
Guyana is a large country and it cannot be effectively or efficiently managed from the centre in the absence of meaningful engagement with the ten regional Governments. It is dangerous to try and craft a national budget for main-street and such an approach will fail. So ingrained is the disrespect for local democracy and local Government bodies that these estimates have not been given to the Regional Chairman that I have spoken with. I suspect that we might be told that they have to wait until after the Estimates are approved for them to be given copies. I maintain that this is the height of disrespect.
Mr. Speaker, in my 2013 Budget rebuttal, I urged ... [Interruption]
Mr. Speaker: Settle down please. Hon. Members, Mr. Bulkan needs not only to finish, but to be heard.
Mr. Bulkan: I urge that what is needed is a comprehensive approach to the needs of the region and of hinterland communities, but that this task has to be approached from the bottom up, not from the top down. In other words, the regional Governments have to be meaningfully engaged to identify their priorities, not what currently obtains, which is, Central Government unilaterally deciding what hinterland communities will receive, such as inadequate net books without internet connectivity, when young people cannot even get jobs.
We have to find out who are actually benefitting from these interventions – the suppliers of goods or the hinterland residents. Seeking to place hinterland economies on a sustainable path has to be a priority of any Government if we are to do justice to the expectations of our people and afford them a good life.
I also then call on the Government, as I previously did in 2012, to cease the invidious practice of breaching provisions of the Constitution; I do so again Mr. Speaker.
Projects and interventions in the regions must not be the sole responsibility of a handful of unelected officials. It is no secret that the combined Opposition was not engaged in the crafting of this budget, yet the Minster bemoans and decries what he refers to as legislative stalemate and of its debilitating consequences. When required to make good on their own obligation; what is the Government’s responsibility? What is the Government’s response? [Interruption]
Mr. Speaker: Dr. Singh could you allow the Member to speak please.
Mr. Bulkan: What is their response? It is here on the cover of the Budget Speech, I refer to this cup here on the right. What it says is that we will do it our way. Had the APNU been consulted, there are many areas of concerns that we would have engaged the Government on. Some of the priority areas to be addressed include job creation, training, education and health access; the high level of taxation and the inequitable burden being borne by some segments. We would have wanted to see that there are transparent arrangements to ensure that the resources of the State are appropriately and fairly managed and distributed, concerned as we are over the unacceptably low standards to which financial management has deteriorated.
Other issues include operation of the Consolidated Fund – I refer to the withholding of deposits to it, disposal of State assets, granting of fiscal concessions and the award of contracts; the inadequacies of the regulatory framework which led to, for example, the Clico fiasco with severe consequences for the National Insurance Scheme (NIS), the absence of national buy-in of key capital projects and the criteria and rational for the overall programme. Projects as we have already heard such as Amaila, Cheddie Jagan International Airport (CJIA) terminal building, Marriot Hotel, Hope Canal, the four lane extension to Diamond and to Betterhope, the need for a social and political audit on the NCN by an independent entity, the operation of Guyana Geology and Mines Commission (GGMC) as an independent institution, the need for an independent broadcast authority and that discussion would necessarily involve the scandal as what is known as the spectrum give away. The list is long, but my time is up.
Finally, if it is that the whole is the sum of its parts, then how can you have a product where the main components are missing, which is meaningful engagement with the majority of Members in this House, as well as, the ten regional Governments? This budget therefore, cannot fly. It has terminal defects with regards to good governance, accountability, transparency and respect for the Constitution. There will have to be modifications to it. The Minister will have to go and come again. Thank you. [Applause]
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