Suruj: Careful how you sell state assets
I note with considerable interest the suggestion that various state assets are possibly going to be sold to generate cash for meeting short term government expenditure.
While the temptation to do this will be strong, the government needs to be reminded that earning assets once sold remove the ability to receive sustainable long term cash from profits and value appreciation over the medium and long term. The sale of long term earning assets to finance non earning short term cash requirements is a strategy fraught with implications that can hurt the long term financial health of the country.
The sale of profitable assets must therefore be carefully balanced against other strategies to rebalance the budget including efficiency measures, control over wastage, the reduction in the heavy dependence for subsidies by utility type state companies and import substitution decisions in order to preserve depleting foreign exchange.
In giving consideration to rebalancing the budget the government must re-prioritize its spending and if necessary defer certain large scale projects. It must put that money to use in the short and medium term in diversification and in particular agricultural expansion and processing. Food security is a must.
The government must identify all those areas of imports which can be substituted including the 5.3 billon in food imports. It is noteworthy that 136 million is spent on fish and fish related products. The development of the tilapia farms as well as sweet water shrimp are feasible projects. The chicken industry which consumes large quantities of corn and soya presents an opportunity for large scale farming. Technology is available for production of corn and soya. While it might be argued these are drop in the bucket projects, I wish to make the point that it is the 1001 small Projects which will eventually add up to significant import substitution. The import substitution program will necessitate a change in our preferences for local Food As against imported food.
It is also clear that the government will become aggressive in capturing many more small businesses in the tax net. The Committee set up by the PM has signaled this through Minister Le Hunte. As well, the passage of the Revenue Authority Bill in the senate with significant support from the independent bench has clearly demonstrated the government’s intention.
I wish to remind that citizens as much as they must pay taxes also have the right to demand services of a high quality and proper use of their tax dollars. The performance of the public service and public utilities therefore must be examined side by side since a citizen cannot be expected to subsidize poor management and performance. These are realities which will Have to be confronted frontally as we move forward.
The PM appointed committee is once again indicating that construction activity is to be ramped up. This will not happen unless the approval agencies change their attitude to private sector developers and as well speed up the approval processes. The private sector has the money to invest but the frustrations are humiliating developers. The ability of the construction sector to take off after Covid will be affected since the Town and Country division has been closed and as well the government electrical inspectorate. The delays in getting approvals to start private dwellings will affect job creation and place a further burden on the state provided social Services which now stand at 29 Billion per year.
In addition the government has not carried through with changes in the regulations at town and country planning which could have afforded cheaper apartments by allowing four apartment on a five thousand square feet of land even if the authorities wished to limit these apartments to two bedrooms and four persons per apartment. This budget announcement of three years ago has not been implemented.
Several Small and medium size contractors have also not benefited to the extent as promised from the announcement that government through the HDC will be giving five to ten homes to be constructed by small contractors. The delays in implementing these well meaning measures is preventing the construction sector especially housing from mobilizing to a different level and creating jobs.
The shutdown has shown how significant the small and medium size enterprises are for the economy.
With oil and gas prices being erratic and unpredictable it is important for us as a nation to Make an instantaneous leap as to how we conduct business. Government must not frustrate but must facilitate business activity. The state cannot keep
Dipping into the HSF. It will dry up unless you replenish it. Added value for government spending is a must. Productivity must improve. The motivation of citizens to contribute will be inspired by their perception of a clear vision for future prosperity. This requires a leadership whom they can trust and in whom they see hope. Citizens are aware that they have to make sacrifices but they are tired of political conflict, of having to deal with political spectacles between rivals rather than seeing leaders working for them. Like it or not the prospects for greater poverty is real. And with it the concurrent social evils.
We can turn it around. We must turn it around.
To Do this we need a transformation in our thinking and a can do must do attitude. Policy papers have their value but in crises like this one, DOING is of greater value. We do not have the luxury of TIME.