Address by the Hon. Minister of Finance
On the Occasion of the Launch of the Budget 2020 Sensitisation and Training Sessions
July 11, 2019 – Arthur Chung Convention Centre
Welcome to this very important session on the 2020 Budget Preparation. For those who understand budgeting, we would recognise that a budget cycle has a life of its own. There is a preparation stage within Budget Agencies, consideration by the Ministry of Finance at the budget hearings, proposals to Cabinet, then proposals to Parliament, followed by the Budget Speech, Parliamentary debate and consideration of theEstimates. After passage of the Budget, we move to the implementation of the Budget, which includes monitoring and evaluation to ensure that performance is being tracked. Finally, we have the oversight and audit of the Budget and then the cycle repeats itself.
I have given that brief outline of the Budget cycle because, in this silly political season, you have politicians and wannabe politicians who are bent on creating mischief, seeking to whip up hysteria and confusion with the dissemination of fake news. Then, you have their acolytes and followers who exhibit Pavlovian behaviour. For those who do not know, that behaviour is named after the Russian physiologist, Ivan Pavlov, who, during the 1890s, was researching salivation in dogs in response to being fed. He discovered that any object or event which the dogs learned to associate with food would trigger the same response. It is called a conditioned response or a Pavlovian response. We have several persons in the business community, in civil society and other organisations who exhibit this type of behaviour, an automatic response conditioned by the signal from their master to react in a now familiar manner. So, like their master, they trot out the view that we should not start budget preparation because Elections are due, and that in so far that there is a government, it is only a Caretaker Government. Let it be known that our Constitution does not provide for a Caretaker Government. Parliament has not been dissolved; is still in session. And this Government, in spite of the successful passage of the No Confidence Motion, still retains a majority. It was only last night that someone from the Diaspora was saying to me, “Why don’t y’all get someone from the Government side to bring a Confidence Motion since y’all have the majority.” I never thought of that before, but it is food for thought.
Today we find ourselves, as is traditional, in the Guyana budget cycle, at the early stages of preparing Budget 2020 having concluded work on Volumes I and II of the Green State Development Strategy – Vision 2040 –, earlier this year. We now have a long term development strategy to guide our thinking in shaping the policies and programmes for our sectors. Later this morning you will be hearing more about the content of that Strategy. Many of you would have participated in the formulation of Vision 2040.At its core, is the realisation of a strategy that envisions “an inclusive and prosperous Guyana that provides a good quality of life for all its citizens based on sound education and social protection, low-carbon resilient development, new economic opportunities, justice and political empowerment.”
The core concepts within the GSDS are:
- Transitioning to renewable energy,
- Green towns urban public spaces,
- Sustainable management of natural resources,
- Green and inclusive economic diversification,
- Building our human capital and institutional capacity,
- Good governance, transparency and knowledge management
- Resilient infrastructure
These concepts will guide our budgeting for 2020 and beyond.Next year is certainly a propitious one. Guyana is about to join the world of oil producing nations! This will mean substantially improved fiscal space, that is, room for spending substantially more on goods and services and the public sector investment programme. If we effectively manage the petroleum resources that are anticipated to flow from this new revenue stream, we will be able to accelerate the pace of economic transformation and development that hitherto we have yearned for but which has proven to be elusive to date.
In order to ensure good governance and transparent management of our petroleum resources, we have ensured that a carefully-considered legislative framework is in place. This framework has had the benefit of extensive consultations and advice. Technical assistance has been sought to build capacity to operationalise this legislation and progresshas been made to ensure the transparent flow of resources from the oil companies to the Natural Resource Fund and into the National Budget takes place.You know, it is only a few days ago that I was forced to remark that we as a people have been so long in the doldrums that we do not know how to accept the fortune that has been gifted to us. Thus we wallow in defeatism and negativism, instead of celebrating and being happy for our improved economic position. Often, this state of affairs is led by some in the media. In this regard, a recent editorial in one of the daily newspapers was questioning the progress made to operationalise the Fund. This was after previous editorials in which they sought to impugn the validity of the passage of the NRF Act because it took place in the aftermath of the No Confidence Motion and in the absence of the Opposition. Well, my answer to that is that the Parliament was still in session and the Opposition chose not to turn up, which is typical behaviour.
The withdrawal rule from the Fund to the National Budget will allow for front loading of development spending while still retaining sufficient resources to be saved for future generations and to be used as buffer, given the fickle nature of oil prices. Over time it is expected that the investment of those savings will result in interest earned to feed into the National Budget long after oil is finished.
How do we ensure that we are ready to take advantage of these resources? First, we must develop the skill sets that can readily support the petroleum and non-petroleum sectors of our country. Every single Region must have a regional development plan that is able to realise the objectives of the GSDS in their own right. Plans of Action For Regional Development (PARDS) have already commenced with Region 10 and 9 being substantially advanced in terms of guiding their Budget 2020 interventions. We must use the lessons learned from the two experiences of developing the PARDS to accelerate the development of regional strategic plans in the eight remaining Regions.Both traditional and non-traditional sectors must be explored to take advantage of the comparative advantages that we possess as a nation. Supportive infrastructure and renewable energy must serve to catalyse the necessary development to transition the hinterland regions to high-performing regions, where service delivery can be comparable to the coast. Indeed, I look forward to the day when coastlanders can journey to the hinterland to live and work with the same level of anticipation as many have done to go to yonder shores. I look forward to the day when the high schools in Mabaruma, Kamarang and Parmakatoi are able to deliver the same quality of education as a top performing high school in Georgetown. I look forward to the day when the maternity patient is able to deliver her baby comfortably and safely in the hospital in Region 7, just as she would be expected to do in our national referral hospital.That is what we need to work towards; that is what we have to deliver; and that is what you, as Heads of Budget Agencies and senior officials in the public service, must reach for and work towards the transformation and development of our nation through every budget cycle. Surely, this is the only pathway to the good life, to which we all aspire.
Getting there is about rolling up our sleeves, putting our shoulders to the proverbial wheel and getting the work done.It’s about putting the systems in place and the institutional strengthening that is required. Addressing the data gaps in our respective agencies is critical to ensuring that we are able to measure our achievements, as we go forward, to determine, based on evidence, what is working and what is not; what needs to be reformed and what needs to be removed. And I am sure that many of these gaps have been highlightedbefore, since all of you have worked with us in preparing the Voluntary National Review of the SDGs.I urge you to continue consulting the stakeholders of your sectors as you prepare your budgets.
Strengthening our systems of monitoring and evaluation (M&E) continues to be a priority. The level of training in key concepts of M&E has been scaled up over the last three years. As a result, almost 700 public servants have been trained with the intention of them returning to their agencies and applying their newly acquired knowledge to their work and to ensure the successful implementation of each successive budget. This week, we commenced what I think is a first in strengthening our public investment management –the training of a core set of Budget Agencies on how to develop their project concept notes from a more scientific basis, so that we can ensure that projects coming into the budget are criteria-based and clearly demonstrate linkages to achieving a Green State.
We have continuously lamented the sloth of implementation of the Public Sector Investment Programme.A closer examination of the reasons reveals that it is a combination of poor management and ineffective planning, but, also, in many instances of civil works.Further, the absence of an adequate number of engineers has compromised the pace and quality of infrastructure development. In addition, acceleration of our PSIP has been strained by incapacity in the private sector. These problems imply a holistic approach to solving. One aspect of that solution must be improved conditions of service, salary and allowances. In that regard, salary improvements to attract higher number of qualified engineers to the central government is under active consideration; it is expected to be approved, shortly. Teacher remuneration has seen continuous improvement over the last few years as well as the salaries of public servants.All categories of workers have benefited fromsignificant reduction in income taxes and substantial increases in the income tax threshold.All of this has taken place in the context of low single digit inflation, rising economic growth and improvement in the social and physical infrastructure – roads, lighting housing, water, and so on. His Excellency has appointed two high-level committees to examine wages and salariesand allowances in the Teaching and Public Services. The one for the teachers is already up and running while the one for the public service is taking a little time to get going. The Government has already named its members to this Committee and we hope that it will get down to the important task, soon.Regardless, I can say with confidence that public servants will get an increase in wages and salariesthis year, and can expect a bigger increase in wages and salaries next year, after we would have won the General Elections.
However, increases in remuneration must be matched by improvement in performance and overall delivery of public services. Managers must manage and supervisors must supervise. Productivity must rise, if we are achieve a modern, competitive nation. It is difficult comprehending why we have to install electric time clocks to track the punctuality of workers and their comings and goings during working hours. And the tracking cannot only relate to the ordinary worker. It has to be enforced from top to the bottom. Too many senior personnel are featuring on Facebook and other social media during working hours, when they should be attending to the public or otherwise engaged in activities for which they are being paid. Irrespective of our impending new status, more money will mean nothing to us, will not result in our advancement, if we are not disciplined in our approach and outlook.
Above all, we must remember that we are public servants.This means that we are here to deliver quality service to all residents of Guyana.We must be driven by results, not consumed by process. Assessing the performance across all sectors is a critical component to ensuring that we stay focused on the target of achieving a diversified, resilient, low-carbon, people-centred vision as articulated by His Excellency President David Granger.
As a former Secretary to the Treasury of the US, Jack Lew, once said “The budget is not just a collection of numbers, but an expression of our values and aspirations.” So, I urge you to translate our national aspirations into effective results-based budgets.
In this politically charged environment, it is easy to become distracted or side-tracked. My admonition to you, my charge to you is to stay professional, stay focused. Leave the politics to the politicians. I am so happy that you turned in your numbers today, and that you eschewed the rantings of the political Opposition who were urging you not to follow the Budget Circular. Continue to work hard and believe. Three decades ago, we were a debt-ridden, pariah state. Today, we have been identified as the fastest growing economy in the world by NASDAQ. This glowing accolade was preceded by a very favourable assessment of our economy by the recent Article IV Consultation Mission of the IMF, and by the CDB and ECLAC. Guyana is on the rise, Guyana is on the moving forward in the right direction. You can feel it, you can see it. Just witness the influx of many people from Caricom countries and further afield, as they seek their fortunes here. It is for us, as Guyanese to unite among a common cause, put aside our differences and concentrate how we can share our country’s prosperity. The time is now! We either seize it collectively, or lose it individually.