Budget 2021 demonstrates Govt’s commitment to manifesto promises

-Financial analyst

Local financial analyst Mr. Joel Bhagwandin says from his observations, the criticisms surrounding Budget 2021 “are divorced from its context.”

Mr. Bhagwandin, of JB Consultancy and Associates, shared these views during a recent interview with the Department of Public Information.

He said Budget 2021 is a demonstration of the Government’s commitment to honour the promises made in its manifesto, and a continuation of the work programme outlined in the 2020 fiscal package.

“The Emergency Budget of 2020, we would have seen a lot of the fiscal measures to revitalise the economy…2021 continues, and what is refreshing and which is contained in the Government’s manifesto for the next five years, is there is some very ambitious transformational projects to advance Guyana’s development.”

This includes the new high-span bridge across the Demerara River, massive housing developments and the substantial focus on agriculture.

Mr. Bhagwandin said the administration is in the process of revitalising the economy and reversing the damage that would have been done over the last five years under the previous Government.

Reflecting on the budgets presented under the APNU/AFC administration, Mr. Bhagwandin said there was a clear difference in the spending priority which was concentrated on non-productive activities.

“For you to grow and build an economy, you need to spend on projects that will generate wealth and new income. What I have seen starting from 2020 with the Emergency Budget and starting with this full Budget by the Government, is a shift in priorities,” he said.

Transformative projects under Budget 2021 

Examining the $25.6 billion proposed for transformative infrastructure, the financial analyst said this will not only create jobs for Guyanese, but also put money directly back into their pockets, thereby increasing their spending power.

One of the infrastructural projects tabled for 2021 is the construction of the Diamond and Eccles bypass road. This would create a demand for construction materials and open up new lands for housing developments. Under Budget 2021, $6 billion was allocated for the housing sector, some 253 per cent more than the $1.7 billion allocation in 2019.

“What matters to the man in the street is more money in their pocket and being able to make more money. So, the companies operating in the supply chain in the construction sector that supply the hardware, it means demand would grow for them and if demand grows for them, it means they would have to invest more to supply more materials because there is a demand to sell it. That means you would create employment.”

Mr. Bhagwandin noted that given the state of the economy inherited from the previous administration, the Government cannot afford to give relief to businesses while simultaneously providing relief to its citizens. However, because of how the economy works, the relief provided to citizens will drive business development and growth as they would now be given back their spending power.

“Take the close to $5 billion given to households as an example. While it has been given to households, it will find its way back into spending for the businesses and that will help businesses to recover because that is $5 billion back into the economy.”

Sectoral allocations

Turning his attention to the sectoral allocations in Budget 2021, the analyst said the Government has directed its spending in areas that will directly impact citizens’ quality of life over a period of time.

Breakdown of sectoral allocations under Budget 2019 as against Budget 2021.

The graph shows the breakdown of sectoral allocations under Budget 2019 as against Budget 2021. It shows that the education sector has received a 1,000 per cent increase with the allocation of $60.7 billion. This, Mr. Bhagwandin said, addresses the human capital deficit in Guyana. He noted that a recent labour force survey stated that approximately 95 per cent of the country’s labour force has not received a tertiary level education.

“If we are going to push transformational development, we’re going to need the skills because you need people to development a country.”

There is also a substantial increase in the agriculture and health sectors. Mr. Bhagwandin said the $22.6 billion allocated for agriculture would help develop and expand the sector, along with the concerted efforted to resuscitate the sugar industry.

Mr. Bhagwandin is encouraging people to examine Budget 2021 holistically as every project and programme has a direct link to the overall development and transformation of the country’s economy.

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