Monday, January 5, 2009



What would you do if you were the CABINET and the UDP?
The critique last week went into the BORROW AND SPEND DEBT ECONOMICS POLICY OF THIS UDP GOVERNMENT, forecasting dire financial bankruptcy consequences due to poor budgetary planning.
In planning the budget for 2009, I would as a matter of course, plan for the WORST CASE SCENARIO! What kind of worse case scenario can you envisage to hit our economy of the country in 2009?
For starters, we live in HURRICANE ALLEY, right at the end. I personally would plan and allow funds to be set aside for TWO hurricane strikes. Also, we now know from experience, that with the deforestation of the nearby PETEN in Guatemala, that we can, during a monstrous rainfall, expect FLOODING. Right off the bat, any 2009 budget should have 300 million dollars set aside to ECONOMIC LOSSES that could be expected from these high probability events. A worse case scenario then for NATURAL DISASTERS would allocate funds be put in reserve to recover from such events and economic losses.
The next thing, our economy is a bit diversified, but our economy is based on remittances, bananas, sugar, fisheries, oil and agriculture in general. We could assume therefore, due to outside world events over which we have no control, we could lose one of these pillars of our government and economic revenues. So, it is only wise to set aside some reserves to cover the economic losses if we were to lose one of our economic legs that support our nation and government costs.
Having done that, those reserves could sit there if never used, until next year and give us some leeway for spending in 2010. If for any disastrous reason, we had to use those funds, we would have them.
The other thing is to project government revenues for 2009. Until we get the STATE OF THE NATION report from our Prime Minister later in January, we cannot draw too many conclusions about that. The mistake both politicians and bureaucrats make often, is to set too high an estimate of government revenues. It is wiser to take the least expected projections and work within that. If you should have money left over by the end of 2009, that is to the good and would go well toward building solvency, or resolving temporary budget shortfalls that might be needed.
What would you recommend for budget planning for this UDP government? After all, they are YOUR GOVERNMENT and so far, they have shown little skill at budget planning with budget revenues. THEY need your ideas and advice! TELL THEM WHAT YOU WOULD PLAN AND DO WITH GOVERNMENT REVENUES.

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