| Budget 2011– Ram & McRae Eminent Chartered Accounting Firm Ram & McRae has conducted a review and analysis of the 2011 budget recently presented by Finance Minister Dr Ashni Singh and questions the accuracy and credibility of the figures that are said to reflect the growth in the economy last year as well as the projection for this year.Last year under the caption ‘Whither GuySuCo?’, “we commented that the turnaround plan did not adequately confront the issues facing the industry, including the necessity for the insulation of the entity from political interference.”The accounting firm says that the future of each of the estates has to be confronted.“Even if the much heralded Skeldon Project eventually operates at full capacity,Authentic China Jerseys, it would not be able to service the Corporation’s huge debts and carry the unprofitable estates as well…We had advised then that the longer the problems are ignored, the more costly and drastic the solutions would eventually be.”Those warnings were ignored and the Corporation now requires ever increasing sums to keep its head above water. Several months ago the President had boldly announced that he was taking personal charge of GUYSUCO.Finance Minister Dr Ashni SinghThe situation has since deteriorated with production almost threatening record low figures.“The Minister expects the nation to believe that the economy grew by 3.6 per cent in 2010 despite the decline of 5.5 per cent fall in sugar against a budgeted growth projection of 19.8 per cent, a mere 0.4 per cent in rice, a contraction of 6.9 per cent in the mining and quarrying section against huge projected improvements in bauxite, gold and diamond, and a statistically insignificant 0.3 per cent increase in manufacturing.”The company said that while the reported growth is 1.0 per cent lower than that projected by the Minister in his 2010 mid-year report, the dramatic decline in sugar makes even a 3.6 per cent growth hard to believe.What adds to the credibility problem is when the 2011 projections are considered.“In 2011, sugar is expected to grow by 35.3 percent, rice by 4.9 per cent, manufacturing by 7.7 percent, while the services sector is likely to grow by smaller percentages…Yet, expected growth is only 4.6 percent.According to Ram & McRae, since the service sectors usually benefit from growth in the productive sector, there is a suspicion that the services sector is a form of balancing figure in providing an acceptable growth figure.As expected, the Budget was not spared controversy linking it to 2011 General Elections.Responding to a criticism by Leader of the Opposition Robert Corbin that the Budget would be an Elections Budget, President Jagdeo,NFL Jerseys Supply, two days before the Budget, announced at the opening of the Diamond branch of the Republic Bank (Guyana) Limited the confidence of the PPP/C that it did not consider an elections budget a necessity and that the fiscal deficit for the year would actually improve.“The fiscal deficit is projected to move from $18.2Bn to $17.3Bn…This reduction has been achieved not by better expenditure management that continues to deteriorate, but by higher and higher tax collections mainly from waged employees via PAYE and consumers via VAT. But the fiscal deficit is only one measure.”According to their analysis budget 2011 projects an overall deficit of $34.0B which is 65 per cent higher than 2010.“Record revenues from VAT and other taxes simply cannot keep pace with the Government’s capacity to spend which in turn translates to record borrowing.”Leader of the Opposition Robert Corbin recently told media operatives that this borrowing will result in the 2011 budget being a burden on the backs of future generations.Ram & McRae says that in any case, the initial Budget is not usually a good measure of whether it is elections driven or not since as night follows day there will be several requests for supplementary funds, later if not sooner.They posit that the real source of elections driven spending is likely to be the infamous National Commercial and Industrial Investments Limited (NICIL) and other extra budgetary funds which the Government spends to influence the support of their non-traditional voter base.The accounting company says that the point that Corbin did not make was that the misuse of state funds for campaign financing makes elections unfair and is a breach of an undertaking given by President Bharrat Jagdeo to Corbin and President Carter to take steps to regulate campaign financing.“Surprisingly, the Minister failed to acknowledge the International Year of People of African Descent and not a single “cent” has been included in subventions and contributions to any of the Afro-Guyanese organisations.”Ram & McRae points out that the Budget optimistically projects the receipt of US$70M from the Guyana-Norway Agreement under the government’s Low Carbon Development Strategy.The Government is projecting to spend much of this money on the Amaila Falls Hydropower Project and huge sums on the Amerindian land demarcation process.“When one looks at the Amerindian Act 2006 however,Cheap NCAA Jerseys, one finds it extremely difficult to see how the process can cost any huge sums of money.”The accounting company made reference to attorney-at-law Dr. Arif Bulkan noting in a soon-to-be published article in a professional journal, “applications for title under the 2006 Act are made to and decided by the Minister using a very simplified process…All that is required to initiate it is an application in writing signed by four adult members of the community.”Where applications are made by existing villages for extensions to their titled lands, the four signatories must be members of the village council, including the Toshao and Secretary.According to Ram and McRae, the application itself is also simple, requiring only basic information such as the name of the village or community,China Jerseys Wholesale, the size of its population, a description of the area requested and the reason for the application.“All applications must be supported by at least two thirds of the adult members of the village or community, and where the application is for an extension of lands,Nike Air Max 95, a plan of the existing titled areas must also be included.”The Budget was presented against the backdrop of Guyana experiencing unusually cold relationship with the diplomatic community, languishing as a very corrupt country in TI’s Corruption Perception Index and poorly rated in the Heritage Foundation / Wall Street Journal 2011 Index of Economic Freedom where it sits at number 151 out of 179 countries, according to Ram & McRae.“A review of this nature cannot ignore the political environment that informs and guides the preparation of the budget including the manner in which taxes, subsidies and expenditure are dispensed and directed to favour certain sectors and individuals.“We are conscious, too, that this is the last budget under the Jagdeo’s presidency and we consider it necessary and appropriate to examine the legacy which the President will leave us.”The chartered accounting firm said that with corruption now possibly the most used word in the Guyana lexicon, the publication also addresses that issue in Commentary and Analysis.Chartered Accountant Christopher Ram“It takes some hope in the establishment of a potential national chapter of Transparency International but is not unaware that the organisation will have to challenge poor governance, weak systems,Cheap NFL Jerseys China, and a timid,Jerseys From China Online, apathetic and at times compromised populace if it is to stem the rapid descent in standards of integrity and honesty, let alone accountability and transparency. This too is addressed in Commentary and Analysis as is debt (mis) management resulting from the excessive spending by the government.” |
