Ministries report lags in the execution of resources for investment at the end of the year

To date, the 14 ministries that make up the central government report an average of 42 percent of the resources earmarked for investment. The lack of execution of this type of expenditure could translate into a lack of adequate infrastructure, which is necessary to improve the levels of competitiveness in the country, experts say.

So far this year, the different executive portfolios have shown that they have no greater difficulty in executing the budget for operation, which can be translated into payment of salaries, benefits, current transfers and, in general, or expenses for management administrative institutions.

According to the Integrated Accounting System of the Ministry of Finance (Minfin), all ministries report an average execution of 87 percent, which could still increase at the end of the fiscal year.

The lags are observed when analyzing the budget for investment, which is equivalent to the construction of infrastructure, its expansion or improvement, among other aspects. Sicoin shows that, on average, execution destined for investment is 42 percent.

The ministries with the longest delay are the Interior, with 11.25 percent execution; Culture and Sports, with 18.12 percent; Economy, with 16.95 percent and Education, 17.33 percent.

In this regard, the Deputy Minister of Finance, Edwin Martínez, explains that it must be taken into account that the budget that governed this year was that of 2019. In that sense, budget items that were financed with loans that have already been executed. From this account, there are budgetary ceilings that do not have sources of financing.

“There are loans or allocations to projects that were executed in 2019. Those resources are no longer available because they were spent,” he said.

However, he affirms from the Ministry of Finance they view with positivism the financial execution of the ministries, since the activities established by the different ministerial programs were fulfilled.

Causes

Irene Flores, from the National Economic Research Center (CIEN), comments that it is common for the investment budget to not be executed as quickly as the operating budget. This occurs because the purchasing and contracting processes related to physical investment entail a series of requirements that institutions do not always comply with efficiently.

“The bulk of the operating expense is payroll payroll. That expense is more agile. On the other hand, investment is a very slow type of expense because it requires that the acquisition processes prepare bases or obtain environmental impact studies, for example. That takes more work, ”Flores said.

Added to this is the fact that in Guatemala the institutions lack the technical capacities to develop the purchasing processes.

“The renovation of a health center, for example, can take half a year for the Ministry of Health because in the pre-investment part it is necessary to obtain the land and other requirements established in the regulatory frameworks,” explains Flores.

The interviewee explains the lack of speed in investment has a negative impact on the quality and scope of coverage of all public services provided by the State. This is reflected, for example, in run-down schools or in overcrowded hospitals.

“You cannot reduce maternal mortality just by paying payroll. This is only part of the strategy, but for the indicator to be reduced, a health center or hospital must be built where the delivery will be attended. Operating expenses, by itself, cannot achieve substantive improvements in the quality of public services, ”says Flores.

Pedro Prado, an economic analyst at the Association for Research and Social Studies (ASIES), agrees that investment execution requires compliance with processes established in the State Contracting Law (LCE) and sometimes officials tend to be late in this.

“At this time, investment spending should be increased to consolidate the economic recovery that we have seen. These execution processes must be streamlined because economic growth is linked to infrastructure, ”Prado said.

The expert explains that one of the great lessons left by the pandemic is that purchasing processes must be improved and public spending evaluated.

“In a pandemic there were resources, but it was difficult to execute them. An evaluation of the public spending of the previous year must be made to formulate the budget project. The evaluation redirects and the objective is to obtain better results ”, he said.

For Prado, a delay in state investment would imply setbacks in the country’s competitiveness. “To raise the levels of competitiveness, it is important to increase the quality of the execution of productive investment, that is, highways, local roads, bridges, airports, among others. That will build a necessary environment, “he said.



Reference-www.prensalibre.com

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