Finance Minister Larry Howai is already preparing for the 2014/2015 national budget, maintaining a “healthy tension” between the Government’s medium-term economic policy while keeping in mind the coming year is an election year.
“We will want to deal with the issue of a general election and also stay on course as far as the medium-term plan is concerned to achieve a balanced budget by 2016 and surpluses by 2017,” he told the audience at a pre-budget seminar hosted by The University of the West Indies, St Augustine.
Howai said he had already issued call circulars to the different ministries, requesting submissions for the budget, but the challenge his ministry faces is to get ministers to focus on critical areas for national development instead of pet projects.
“A big part of managing the budgets through all the various line ministries is getting them to refocus after the budget is done on the most critical areas. When I send out call circulars, I get responses back with requests totalling like $120 billion, and when the revenue stream is about $50 million.
“So then you have to go through the process of weeding some things out, and it is difficult to get them to refocus not on pet projects but projects that add value as the national priorities that have been identified; that is something that takes quite a lot of work to get done,” he said.
Howai added that regarding the operationalisation of the budget process, there were “probably a lot more changes we want to make” to the budgeting system.
“It’s not really advanced in the last 20 or 30 years and we need to do some work on the whole process of the accounting system, and we have approached the European Union to help us with that process of developing the procedures and where we can make legislative amendments, but that is still a work in progress,” he said.
Howai also noted the services sector was very important to the country’s economy—in particular, the cultural sector as a foreign-exchange earner.
“We are generating foreign exchange from culture in a way we don’t measure and we probably should. Machel Montano earns foreign exchange; bandleaders earn foreign exchange; there are carnivals throughout the year.
“The culture sector generates foreign exchange (but) we just have not put systems in place to measure that properly and perhaps over time that is something we can refine but certainly it is an area we have to start developing indices,” he said.