Extravagance: A factor in the economic downturn?

first_imgThere have been, and continue to be, serious concerns over national spending since the Government took office in 2015. While the D’Urban Park and the Sussex Street controversies may have come to epitomise these concerns, what continues to be revealed is equally alarming. Just recently, it was disclosed that Special Prosecutors are receiving some $20,000 per hour for services rendered and a $2 million retainer against fees and costs.This is not suggesting that legal skills must not be adequately compensated. However, in the current circumstances it would be difficult not to question the amounts offered. This is against the backdrop of a contracting economy which has forced growth projections to be downgraded on more than one occasion. That is part of the bigger picture and when specific areas are closely examined, the economic situation appears much direr.The impact of the closure of sugar estates and the firing of thousands of workers continue to hit hard on many households and by extension, communities across the country. It may be safe to state that Guyanese who are not familiar with life on the sugar belt may not fully grasp the gravity of what continues to unfold there through the forced economic squeeze and its daily worsening.Much has been said about the ongoing devastation inflicted by the plethora of new taxes which further cripple workers and naturally redound negative effects on the national economy; hence, it is a possible contributing factor for lower growth. Simply put, the nation’s workers have had unnecessary economic burdens foisted upon them resulting in an evaporation of disposable income thereby lowering standards of living and regressing progress.Local and international trade have also taken a hit, and one of the eventualities is job loss which would further compound a worrying situation. With a bleak outlook, one would not only ponder on what the future holds, but would also question what precipitated the situation and whether it could have been avoided.This has to be viewed from what transpired in the beginning of the Government’s tenure. Guyanese were shocked at the seemingly unnecessary expansion of ministerial portfolios and the now infamous 50 per cent increase in salaries for them. The D’Urban Park Project began around the same time with millions eventually ploughed in to accommodate just about two national events annually. It should be noted that all the details of this project are yet to be revealed.Just recently, it was reported that some $265 million was spent on rental of the Sussex Street bond, the use of which, reportedly, should have been discontinued some time ago. While reasons have been offered for continuation, validity may pose an issue. Also, it was reported that some $850,000 has been paid as monthly rental for a property in the city earmarked for the Law Reform Commission, with its latest status being “almost” set up.While none can argue against the need for advance preparation, in the context of what has unfolded on aspects of Government spending and the questionable situations it triggered, the rental since six months ago for the Law Reform Commission seemed to have delivered another such circumstance.When all of these, plus the reported exorbitant house rental for some officials, seemingly extravagant international travels and other areas of public funding are taken holistically, questions over whether most of that financial resource could have been channelled to mitigate current austerity measures appear far more relevant.Had some been made available to help bolster sugar before closure of estates, the harsh economic impact on the fired workers, their families, and the thousands who indirectly depended on the industry could have possibly been avoided.Extravagance, therefore, becomes the watchword. From all that have occurred, it makes a compelling case with a difficulty in trying to understand the rationale, given current realities. For those who lived in the pre-1992 Guyana it can appear a repetition of history.During aspects of that period, extravagance seemed routine at the expense of the masses. The downward spiral of the economy, aided by that and some poor policy decisions, was profound. It resulted in economic hardships, a period during which some basic food items were banned.Currently, while there is no ban on items in a free market economy, many are forced to curtail spending on commodities and services which could have been afforded just a few years back. There will be situations in almost every society, including Guyana, where a section of the populace would be so unable; but that is inherently due to existing poverty. Under the current circumstance, people are being moved from a position of affordability to poverty as a result of some national fiscal policies.How big a factor extravagance is is yet to be determined. However, one can posit that if sums deemed unnecessarily spent were used differently, then some of the economic challenges could have been mitigated. As borrowing continues seemingly unabated, a worrying end result looms, bringing into focus the adage: the mode of transportation best suited for a particular type of economy.last_img

Leave a Reply

Your email address will not be published. Required fields are marked *