HON. IRFAAN ALI, M.P. MINISTER OF HOUSING AND WATER AND ACTING TOURISM, INDUSTRY AND COMMERCE MINISTER
BUDGET BEBATE SPEECH 2014
BUDGET 2014 Mr. Speaker there is no doubt that Guyana is growing rapidly and development is taking place due to the implementation of prudent macroeconomic policies. This FACT is supported by all the key socio-economic indicators. Economic Growth During 2013, the economy recorded positive economic growth of 5.2 percent. This represents eight years of uninterrupted positive growth, an unprecedented achievement in our post-independence history. The only other period which corresponds with such stellar economic performance (in our history where Guyana experienced uninterrupted economic growth) is the period 1991 to 1997; and it was under the PPP/C government. It is important to note however, the economic expansion recorded over the last eight years eclipse the growth episode during the 1990s for two important reasons: - firstly, the Guyanese economy expanded amidst a contracting global economy; demonstrating the resilience of the domestic economy to external shocks and efficacy of our macroeconomic management; - secondly, the variability of the growth rates during the last eight years was lower than the variability associated with the growth episode of the 1990s; pointing to higher quality economic growth Quality of Economic Growth Growth episode (2006-2013) – standard deviation 3.91 Growth episode (1991-1997) – standard deviation 13.85 Mr. Speaker, equally remarkable is the fact that the 5.2 percent economic growth posted by Guyana in 2013 is the highest in the Caribbean according to a 2013 report by ECLAC entitled “Economic and Social Panorama of the Community of Latin American and Caribbean States”. Based on this report Caribbean economies recorded the following growth rates for 2013: Jamaica (0.1 percent), Trinidad and
Tobago, St. Kitts and Nevis, Bahamas, Belize (1.6 percent); St. Lucia (1.1 percent) and Grenada; Antigua and Barbuda (1.5 percent); Dominica (negative 0.5); and Barbados (negative 0.7). Economic Growth Rates Guyana: 5.2 Selected countries in Caribbean and Latin America: percent 0.1% (in Jamaica); 1.6% (in Trinidad and Tobago, St. Kitts and Nevis, Bahamas, Belize); 1.1% (in St. Lucia); 1.5% (Grenada and Antigua and Barbuda); negative 0.5 (Dominica); negative 0.7 (in Barbados); 3.9 (Suriname). 4.5 (Argentina and Uruguay); 4.0 (Haiti); 3.0 (Dominican Rep. and Cuba); 2.4 (Brazil); 3.8 (Ecuador); 4.6 (Nicaragua); 4.2 (Chile); 3.2 (Costa Rica); 1.3 (Mexico). Source: ECLAC - Economic and Social Panorama of Community of Latin American and Caribbean State (2013)
the
Inflation Mr Speaker, inflation was contained at 0.9 percent for 2013; the lowest in decades. Mr. Speaker contained inflation rate is important to the growth prospects of an economy. A low rate translates to minimum variation in the GDP deflator making the expansion in Real Gross Domestic Product (GDP) and the growth rate for 2013 unquestionable. More importantly, the low inflation rate means that the real purchasing power of the average Guyanese was maintained. Domestic Investment and Foreign Direct Investment (FDI)
Mr. Speaker, the buoyancy of the economy coupled with relatively stable prices and exchange rate, ensured a conducive environment for the continued expansion in domestic investment; as reflected by the growth in credit to the private sector. This outturn clearly reflects the confidence of the local private sector in the domestic economy. Mr. Speaker, according to the ECLAC reported alluded to earlier, the growth in domestic credit surpassed other countries in the Caribbean. During 2013 domestic credit in Guyana expanded by 24.2 percent compared with: negative 23.4 percent (in St. Kitts and Nevis); negative 12.1 percent (Trinidad & Tobago); negative 0.8 percent (in Belize), negative 6.8 percent (in Antigua and Barbuda); 1.7 (in Bahamas); 11.3 (in Barbados, 17.7 (in Jamaica) and 21.4 (in Suriname). Domestic Credit to Private Sector Guyana 24.2 percent Selected Caribbean countries: Suriname 21.4; Jamaica at 17.7; St. Kitts and Nevis at -23.4; Barbados at 11.3; Trinidad and Tobago at 12.1; Bahamas at 1.7; Brazil at 12.9 Source: ECLAC- Preliminary overview of the Economics of Latin America and the Caribbean (2013) Notwithstanding the deliberate efforts of the combined opposition to create uncertainties and make the local business environment unattractive, I am pleased to inform this Honourable house that Guyana benefitted from US$217 million in Foreign Direct Investments (FDI) last year. In
2014, FDI is projected be US$345 million or 62.8 percent above the level in 2013. Foreign Direct Investment Guyana: US$217 Million
Selected Caribbean countries: Suriname – US$66 Million; Jamaica – 293 Million; Belize – 84 Million; Trinidad and Tobago – 751 Million; Antigua and Barbuda – 135 Million; Bahamas – 345 Million.
Source: ECLAC- Preliminary overview of the Economics of Latin America and the Caribbean (2013) Gross International Reserves Despite the marginal contraction in our Gross International Reserves our import cover remains extremely strong. During 2013 our import cover was computed at 3.9 months; this is well above the acceptable level of 1.52 months as suggested by the Barnichon (2009) Optimisation Framework. International Debt Mr. Speaker international debt stood at US$1,246.5 million at end-December 2013, 8.3 percent lower than the level at end-December 2012. Apart from the reduction in our external debt position, it is also important to note that all the debt indicators remain well below their respective thresholds according to the most recent Debt Sustainability Analysis (DSA) conducted by the International Monetary Fund (IMF). Contrary to the ‘OPINIONS’ of the uninformed, that government spending does not translate into economic growth and development; the evidence of our economic and social
progress is beyond question. Moreso the information required for any objective analysis is in the public domain for all to examine. In addition to the unprecedented the growth rates, sustainable debt levels and price stability, our skillful stewardship of the economy has produced numerous policy dividends. Mr Speaker, I am pleased to report to this honorable house accomplishments in the areas of : Poverty reduction Extreme Extreme poverty which was 29 percent in Poverty 1992 was reduced to 18.6 percent in 2006 according to the Inter-American Development Bank. The International Monetary Fund also confirmed a reduction in poverty over the last decade. Attainment of Millennium Development Goals Millennium Guyana has achieved the MDGs related to Development nutrition and child health, eradicating Goals extreme poverty and hunger, and universal (MDGs) primary education and is on course of achieving the other MDGs. Improvement in Human Development Index Human The human development index Development 0.502 in 1990 to 0.635 in 2012 Index
rose
from
Improvement in Guyana ranking in Human Development Report Improvement Guyana is now categorized as medium human in Guyana development country having moved two ranking in points in the 2012 Human Development Human report, ranking 118 out of 187 countries Development
Report  Significant social development as reflected in the improvement in key social indicators – infant mortality and under 5 mortality rate improved
Infant mortality rate (per 1,000 live births)
Under 5 mortality rate (per 1,000 live births)
2013 12.9
1992 42.9
2013 15.8
2004 26
2013 0.2 2.0 98.0
1999 0.5 12.9 83
97.5
87
97.5 97.8
83 91
improvement in immunization rate
Severely malnourished Moderately malnourished 1 year old immunized against DPT/(Pentavalent) (%) 1 year old immunized against MMR, Yellow Fever (%) 1 year old immunized against polio (%) 1 year old immunized against, TB, BCG (%)
improvement in the number of physicians and nurses per Ten Thousand Population 2013 1992 Number of physicians per Ten Thousand 9.5 2.0 Population Number of nurses per Ten Thousand 15.3 5.9 Population
In addition, Per Capita GDP increased by 670 percent from 1992 to 2013. 2013 1992 Per capita GDP US$3,496.3 US$454 Mr. Speaker these statistics are included in Appendix 1 of the Budget Speech. The success of our programmes and policies is not only confirmed by these statistics but is recognized in a bevy of published peer-reviewed journal articles and other technical studies on Guyana. Just to give a few examples. In a study by Kari Grenade and Denny Lewis-Bynoe entitled “Reflecting on Development Outcomes: A Comparative Analysis of Barbados and Guyana” (2011) assessed the performance of the Guyana economy after 2000. The authors concluded that the growth rates in Guyana is catching up with Barbados due in part to sound macro-economic management, institutional strengthening and deeper social cohesion. According to Grenade and Bynoe, the success of Guyana provides good policy examples for other countries in the Caribbean to replicate. Kari Grenade and Sukrishnalall Pasha in their study entitled “Accelerating Guyana’s Growth Momentum’, argued that improved governance, sound macroeconomic management and favourable terms of trade were the key propellers of economic growth between 2006 and 2010. Only last month, the CDP President lauded Guyana when presenting the CDB Annual Report. The CDB president remarked that Guyana is good fiscal example for countries in the Caribbean to follow. He said the following: “Guyana is a good example of a country that has done some of the right things...,. They have come a very, very
long distance in terms of their fiscal situation. They have been responsible in terms of addressing it” He went on further to say that: “Generally there is a lot of vibrancy in the Guyanese economy. Just by casual observation one can see that there is a lot of construction that is taking place in the country, I like to say that whenever I go to Guyana you can almost see the country changing in front of your eyes, and so that is just a casual indication of the extent to which economic activity is vibrant and buoyant in that country.” Mr Speaker, to reference the 2013 Article IV Surveillance Report by the International Monetary Fund “During the last decade, Guyana’s strong macroeconomic performance has contributed to a reduction in public debt levels and sustained poverty reduction. The economy has experienced seven years of uninterrupted growth averaging about 4 percent annually. The key pillars of the macroeconomic resurgence have been sustained reforms, in particular the implementation of VAT, favorable commodity prices, significant inflows of Foreign Direct Investment (FDI) …’ Mr. Speaker, the conclusions of these studies are based on rigorous scientific investigations and devoid of the bias of those with narrow political agenda. Given the overwhelming evidence of the development taking place in Guyana I don’t believe we need any further academic validation or debate about growth and development in Guyana, as anyone with eyes or a modicum of objectivity
would readily agree that our country is transforming rapidly and moving in the RIGHT DIRECTION. Equally important is the fact that our development is attributable to PRUDENT MACRO-ECONOMIC management. Mr. Speaker in order to understand the magnitude of our success, it is imperative that we compare the narrative of economic development prior to 1992 with the narrative in the reports highlighted earlier. Micheal DaCosta, for instance, in his study entitled “Colonial Origins, Institutions and Economic Performance in the Caribbean: Guyana and Barbados” (2007) which compares the economic performance of Guyana with Barbados said the following: “… throughout the late-1970s and early1980s Guyana’s political climate was marked by continued instability, the absence of dialogue and consensusseeking, and a further weakening of key institutions, such as the rule of law. Production of all the major commodities declined sharply; public utilities and social services barely functioned; and real wages fell sharply (by 40 percent between 1976 and 1986). During the 1976– 88 period, real GDP per head fell by 31 percent, inflation soared eightfold, foreign exchange reserves dwindled, and government debt rose from 31 percent of GDP to 475 percent. In 1984, real GDP fell to its lowest level since 1955, and the size of the informal economy was estimated at 40 percent of the formal economy. Indeed, for most of the 1980s and the first half of the 1990s GDP per capita in U.S. dollars was lower than in sub-Saharan Africa. Toward the end of the 1980s, the country physical infrastructure—including the critical
drainage and sea defense infrastructure— deteriorated considerably, and indicators of health and education, and overall social conditions worsened. Among the most visible and damaging effects of the policies during this period were those associated with the loss of human resources and skills through migration.” Armendariz et al. in their study entitlted “Identifying Binding Constraints to Growth in Guyana”. said the following: “During 1970-78, the economy grew by an average of just 1.4 percent, despite high growth linked to high world prices of sugar and bauxite in the early 1970s. Guyana’s economy further plummeted in the 1980s, with growth declining at an average annual rate of negative 2.5 percent between 1980-89. With diminished capacity, a huge parallel economy, staggering debt and aid suspension from traditional donors, Guyana had very few choices at the end of the 1980s. It therefore needed to renew access to international financial markets. The debt crisis, weak macroeconomic fundamentals and the decline in economic activity forced a shift towards market-oriented reforms in the government development strategy.” In his study entitled “The Poor and the Powerless; Economic Policy and change in the Caribbean” (1988) the Distinguished Professor C.Y. Thomas spoke about Guyana’s economic collapse and attributed same to macroeonomic mismanagment. In particular, Professor Thomas said the following:
“… the poor economic performance and subsequent economic collapse by the end of the 1980s was due to a domestic production crisis and declines in productivity as a result of economic mismanagement and not to falling prices, shrinking export markets or a world economic crisis” The observation by Professor C.Y. Thomas was also confirmed recently by Dhanraj R. Singh in his paper entitled “The Political Economy of Growth: Why Guyana Fell Behind? A Growth Analysis of Post-Independence” (2013). In this study the author argued that under the PNC rule, between 1985 and 1992: “… the economy continued to fold as poor macroeconomic management and a soaring external debt continued to impair growth. By 1988, import cover was less than two weeks, international reserves depleted and there were little domestic or foreign investments and the government controlled over 80% of all imports and exports. Such pernicious economic performance brought significant increases in poverty, widespread political instability, increased unemployment, mass migration and incessant deterioration in the provision of public services.” According to Dhanraj Singh (2013), investment also contracted. “… Private investment shrunk further by 45.5% and public investment by 23.8% in 1982. Manufacturing output slashed by 40% and sugar by 30%. This had widespread and devastating ripple effects across the economy as both private and public consumption fell dramatically.”
One of the most important findings of the Dhanraj Singh is that the economic contraction experienced in Guyana is significantly related to the programmes and policies implemented by the PNC administration, . In contrast, the study shows that there is always a significant positive relationship between economic growth and a PPP/C’s Government. Mr Speaker, the studies mentioned provides insightful coverage of the economy, the failure of the policies pursued and the gross economic mismanagement of the PNC administration. This was the state of the Carl Greenidge managed economy. No where in the history of a PPP led administration associated with such decadence, despair and failure. Mr. Speaker, apart from the fact that the economy is performing better today than when we assumed office in 1992, the story of our development may be deduced from a casual examination of the headlines emanating from the media in the Caribbean. At a time when the Guyanese economy is expanding, and the PPP/C government is paying higher wages and building as well as maintaining the country’s physical infrastructure in a fiscally prudent and responsible manner, many governments in the Caribbean are instituting wage freeze, borrowing to pay wages to public servants, and cutting back on spending on infrastructure, mention a few austerity measures taken. Bajans taken for a ride: The Minister of Finance of Barbados admitted that Government is borrowing $14 million per month to pay 7,000 casual workers and it is borrowing much more to pay many more permanent civil servants on a monthly basis. (Source: Nation
News, February 6th, 2014) Puerto Rico slides toward insolvency: Dark clouds are hanging over Puerto Rico. Its projected 2013 deficit follows a likely 2012 deficit and twelve preceding deficits stretching back to 2000. The economy has not been generating sufficient tax revenue to support the services that the government has been providing to citizens. The difference has been made up by borrowing in the bond market and loans from the Puerto Rico Government Development Bank. Now the bond market gatekeepers, – credit ratings agencies – are waving the red flag. Standard & Poor’s downgraded the Commonwealth of Puerto Rico to BBB- (one tiny step before junk status) and followed this downgrade with one of the island’s Government Development Bank to BBB-. This is ominous. The GDB is the heart of Puerto Rico’s borrowing system. (Source: Reuters, March 15, 2013). Saint Lucia PM calls for a reduction in government spending: CASTRIES, St Lucia -- With the contraction of the world economy, many countries have sought to implement measures to curb expenditure for fear of plummeting into financial crises. On the opening day of the debate on the estimates of revenue and expenditure for 2013/2014, Saint Lucia prime minister and minister for finance, Dr Kenny Anthony, announced an intention to reduce the country’s spending. In acknowledging the need to restore the fiscal position of the island to a viable and sustainable state, Anthony presented to the House of Assembly, a draft of the estimates of expenditure which is $134 million less than last year’s. Last
year’s
approved
estimates
totalled
$1.457
billion. However, this year, the draft estimates is $1.327 billion. The total recurrent expenditure is expected to decline by an estimated 1.6 percent lower than the approved estimates for 2012/2013, representing some $947.1 million. In keeping with its belt-tightening measures, the government intends to cut capital expenditure by more than 20 percent. “At 380.3 million dollars, the proposed capital expenditure budget for 2013/2014 represents 114.6 million or 23.2 percent decrease compared to the approved estimates for 2012/2013,� Anthony said. The overall cuts in expenditure are more likely to be felt mainly in respect of capital expenditure. (Source: Caribbean News: April 27, 2013) Wage freeze could go beyond 2017, says Roberts: HEAD of the Hugh Lawson Shearer Trade Union Education Institute, Danny Roberts has warned of government's wage freeze going beyond 2016/17 or the possibility of retrenchment of thousands of public servants if there is failure to strengthen the country's external competitiveness and generate higher levels of productivity and real GDP growth. Robert was speaking on the topic "Work Ethics, Wage Freeze and the Employee" at a staff development workshop at the Charlemont High School in St Catherine on Friday. (Jamaica Observer: March 10, 2014) Grenada government unable to pay arrears to public servants: The Grenada government says it will not be
able to pay as schedule the EC$12 million (one EC dollar = US$0.37 cents) in retroactive payment to public servants. A government statement said that while the process of preparation for payment is almost completed, the Keith Mitchell administration “is mobilising external funding which has not yet arrived”. (Source: Guardian, March 1, 2014) Sustainability of Wage Increase Mr. Speaker, in Guyana our public servants have been granted wage increases, at least in line with the inflation rate to sustain their purchasing power. While the Government would be happy to provide higher increases, such increases are unsustainable and may only be allowed with adverse consequence for inflation, fiscal consolidation, exchange rate stability.
'Build homes, create jobs': THIRTY thousand people in the construction sector are currently jobless, Prime Minister Kamla Persad-Bissessar has said. PersadBissessar made the statements yesterday during a presentation of keys ceremony held at the Housing Development Corporation's (HDC) Port of Spain offices. Housing -$4.4 billion Water – $2.5 billion
Construction workers: 1,700 jobs Construction workers: 1,100
Construction jobs: Engineers, Architects, Suveyors, Foremen, Operators, Drivers,
jobs
Masons, Carpenters, Plumbers, Electricians, Welders, Fabricators, Mechanics and Servicemen, Clerks of works, Accountants, Data Processing Clerks, GIS Specialist and AutoCAD Technician, Security, Checkers, Skilled and Semiskilled labourers.
"The Central Bank Governor is saying that the Government needs to spend, the Government needs to invest in infrastructure and as we do that we create jobs, and as we create jobs that goes into the multiplier effect and stimulates the economy," PersadBissessar said. "In the construction sector I am advised that 30,000 people are unemployed and we have so many houses to build and we will build houses and we will provide these jobs," she said. (Source: Trinidad Express, May 4th, 2011) 24,700 LOSE JOBS: CLOSE to 25,000 jobs were lost in 2009 to 2010, pushing this country's unemployment rate to the highest it has been in almost three years. This information is contained in the Central Bank's Monetary Policy Report dated October 2010 released yesterday by the bank at a press conference at its
offices in Port of Spain. The report shows that the economy continues to languish and that the Gross Domestic Product (GDP) will not achieve the projected growth of two per cent this year. (Source: Trinidad Express, November 4th, 2010) 2014 Budget Initiative - $6 billion Subsidy of $6 billion GUYSUCO This subsidy is intended to sustain over 18,000 jobs directly and 120,000 indirectly within the agriculture sector. Barbados’ job cuts politics: Based from a statement released by the International Monetary Fund (IMF), that Barbados’ wage bill for public sector workers is currently “the highest” in our Caribbean region. Further, together with interest payments on rising debts, this wage bill, which cannot be sustained, severely limits room for investment to boost economic growth. Consequently, some 3,000 government workers are scheduled for retrenchment within the first quarter of 2014. Such very dread news, 12 days before Christmas, would already have been before the Barbadian people as a toxic source of spreading depression. (Source: Trinidad Express, December 17, 2013). Residents want jobs, infrastructure: RESIDENTS of the Beetham Estate want three things—employment, proper infrastructure and assistance to fix their homes. These were the major complaints made by the residents yesterday when Minister of Social Development, Dr
Glenn Ramadharsingh, and his ministerial team toured the area during his "Direct Effect" walk. (Source: Trinidad Express, July 27th, 2011). 2014 Budget Initiatives Creating jobs Marriott Using the IFC 3 Jobs within the jobs per room hospitality sector ratio this project will create over 591 direct jobs in the hospitality sector during the operational phase. The discretionary spending outside the hotel will also create indirect jobs. Amelia Construction jobs: Falls Hydro Engineers, Project Architects, Suveyors, Foremen, Specialty Operators, Drivers, Hospital Masons, Carpenters, CJIA Construction Plumbers, workers: 400 Electricians, Long-term Welders, employment: 100 Hospitality Using the same IFC Fabricators, and Institute ratio of 3 jobs Mechanics Clerks per room this Servicemen, works, institute will of Data benefit over Accountants, Clerks, 10,500 hospitality Processing GIS Specialist and worker. AutoCAD Technician, Housing Construction workers: 1,700 Security, Checkers, Skilled and Semijobs
Water
Industrial Estates
MSE Projects
Construction workers: 1,100 jobs These projects will create at least 3,220 for construction workers
skilled labourers.
Other jobs: A variety of skills will be required for the jobs in the manufacturing and hospitality sectors, including, When the estates accounting, finance, all of become operational marketing over 4,025 in the which are aligned to the programme manufacturing offerings at the sector. University of Guyana. Thus, these projects will benefit our graduates. Using the ratio of loans to jobs from IPED where a loan of $282,000 to create one job the allocation under the MSED Project and Rural Development Fund will create over 7,092 jobs in the small business sector
Mr. Speaker what is instructive to note is that while Caribbean economies are struggling to preserve jobs, attract investment, build and maintain infrastructure, our economy has continued to perform admirably in these areas.
The main threat to our continued progress has been the combined opposition is working to achieve the reverse. The combined opposition is making a concerted effort to create an environment of stagnation and suffering. One can only conclude that Mr Greenidge and company feels at home in an unsuccessful economy. In their efforts since the 2011 elections, the combined opposition has been: - cutting the budgets with the intention of putting our people out of work in the public sector and the sugar industry; - blocking transformation projects with the aim of stymieing government’s effort to create jobs for Guyanese; and - blocking the passage of critical legislation with the aim of making Guyana less friendly to foreign and domestic investments. Because of the actions of the combined opposition this is how the headlines emanating from Guyana reads: 1. Budget cuts delay hinterland development (Kaieteur News – 23 October 2013) 2. GINA begins “staff rotation” as budget cut bites (http://newssourcegy.com/news/gina-begins-staffrotation-as-budget-cut-bites/) 3. New River Triangle Debacle…Muri Brasil pulls out of PGGS (Kaieteur News – 5 January 2014) 4. Muri Brasil pull out…Opposition should stop playing politics with projects geared towards economic development – Dr.Luncheon (Kaieteur News – 9 January 2014) 5. Investors’ confidence in Guyana under political attack – Luncheon warns: – cites Opposition dealings with Muri Brasil and Amaila Falls projects (Guyana Chronicle – 8 January 2014) 6. Opposition continues to hold critical socio-economic projects to ransom (Guyana Chronicle – 19 July 2013)
7. Opposition cut to budgetary allocation for Specialty Hospital… MIND BOGGLING – defeats any sense of logic (Guyana Chrronicle – 24 April 2013) Mr. Speaker it my hope that the combined opposition would see the wisdom of supporting the 2014 Budget for the good of our country, since our policies and programmes have consistently produced positive policy dividends. This year’s budget seeks to consolidate these gains by: (i) facilitating structural production transformation; (ii) consolidating the agriculture sector; (iii) building our domestic private sector; (iv) advancing the implementation of the Low-Carbon Development Strategy; (v) promoting socio-economic development through a continuation of prudent macroeconomic policies; (vi) promoting inclusive or balanced development through initiatives targeting vulnerable groups (women, youths, hinterland communities, senior citizens etc). (vii) providing gainful employment for all our people through the creation of an enabling environment for investment (both domestic and foreign) as well as direct investments through the Public Sector and Public Private Partnerships (PPPs). In particular, the menus of measures proposed in the 2014 Budget are ultimately aimed at: sustaining the job creating capacity of the economy for the benefit of our people expanding our economic base, accelerating economic growth, promoting social development; and maintaining fiscal sustainability. Mr. Speaker, this is a PEOPLE FOCUSED BUDGET and it caters for Guyanese from every strata of society, especially
vulnerable groups households).
(our
seniors,
youths,
women
and
poor
Structural production transformation Mr. Speaker in order for Guyana to develop more rapidly and post higher quality economic growth, the structure of the economy has to be transformed to facilitate the production of goods and services which are high on the global demand hierarchy and have high value-added potential. This point was made in many academic studies, including “Sectoral Production Interaction and Spillovers” in Guyana by S. Pasha, Dhanraj Singh and Tarron Khemraj (2013). Recognizing the importance of structural production transformation, the Government has consistently promoted policies and programmes aimed at structural transformation in all its development strategies, including the recently launched National Competitiveness Strategy and Low-Carbon Development Strategy. Since the 2011 Budget, the government has also provided fiscal support for numerous catalytic projects that would serve to transform the production structure of the economy. In the 2014 Budget, the government proposes to continue with investment in several catalytic projects, including the: Amelia Fall Hydro Project (AFHP) CJIA expansion, and Specialty Hospital Notwithstanding the overwhelming empirical justifications for these projects; the government is yet to receive support from the combined opposition. Without the combined opposition’s support the advancement of these catalytic projects will be difficult.
Mr. Speaker with the Amelia project our country would be able to access cheap, clean and reliable energy that is necessary for Agro-processing and other industrial and value-added activities that would see the country move from a primary commodity producer to producer of industrial goods. This project, will also place us in a position to be energy secure. The Amelia Falls Hydro Project (AFHP) will provide the country with a reliable source of clean renewable and affordable energy. Specifically the project will: Save consumes approximately US$3.5billion over 20 years through the reduction of tariff to residential, commercial and industrial consumer of GPL; Reduce the fuel import bill by approximately 20 to 25 percent and save the country over US$90 million on imported fuel. This would reduce our exposure to the vagaries of adverse price movements on the international market; It would add cumulatively 6 percentage points to real GDP during the project construction phase; lead to a reduction ranging between 20 to 40 percent in the current cost of generation; and allow for the generation of electricity using 100% renewable source. This has the potential of earning approximately US$10 million annually from the sale of carbon credit. Our competitiveness is also expected to improve with the reduction in the cost of electricity as well as the simultaneous improvement in the reliability of this service, which has been identified as a binding constraint to our development. Meanwhile, the CJIA expansion, Mariott Project and Specialty Hospital are also necessary investments if we are to fully exploit the potential of high-end tourism
activities (such as Health Tourism, Eco-Tourism and Meeting Incentives Conferencing and Exhibition (MICE) etc.) thereby expanding our economic base. Benefits of Marriott Project The total wealth creation (or value-added) impact of the project is estimated to be approximately $17.4 billion during the construction phase; Serve as a benchmark for all local hotels encouraging them to improve their quality and range of services to meet international standards; Encourage other reputable international branded hotel to invest in Guyana Boost the capacity of the local tourism sector to tap into high-end business customers; Promote Guyana as a “Meeting Incentives Conference and Events or Exhibition (MICE) destination Support efforts to develop tourism sector. CJIA Expansion The expansion will see a runway with the capacity of accommodating wide-bodied aircraft. Attract airlines to Guyana Create the unique opportunity for Guyana to become the hub to serve flight routes to South, Latin America and Africa; market currently unexplored and with significant potential Mr. Speaker the budgetary allocation for these catalytic projects will be buttressed with various initiatives in this year’s Budget. The 2014 Budget, for instance, proposes an investment of $200 million to complete the industrial estates in Eccles, Lethem and Belvedere. This investment is specifically intended to enhance the feasibility of industrial activities in Guyana. Proposed spending for Industrial Development $200 million Output Impacts BELVEDERE – Plots Supplied 21 – therefore 21 $10 M (on investors will benefit. security
fence) will be spent in 2014 to complete.
Finished: roads, drains, culverts, water supply, electricity
Let’s say that each investor will expend approximately 18M to set up their factory/plants – this means that 21*18 million = $378M will be injected in economy of region 6 Demand for local and imported construction materials – will result in demand for labour – 420 direct jobs (assuming minimum 20 persons) will be created to construct these factories/plant This estate in operation will create approximately 525 direct jobs in the Belevedere Community and by extension region 6. Assuming that these new jobs generate an average income of $50,000 per month, it will be seen that the income earning capacity of the region will increase by $26.2 million per month: Further, this means that the earning capacity of the region will increase by $315255.6
LETHEM - $180M will be spent on infrastructure works on Lethem Estate - Access roads
Note: the community will benefit from the Access road and also approx.. 380 students will benefits directly from a footpath which we will construct. Plots to be supplied – 140 Let’s say that each investor will expend approximately 24M to set up their
- Internal Roads - Drains - Culverts
factory/plants – this means that 140*24M = $3.3B will be injected in Lethem. Demand for local and imported construction materials – will result in demand for labour – 2,800 direct jobs will be created to construct these factories/plant This estate in operation will approximately 3,500 direct jobs.
create
Assuming that these new jobs generate an average income of $50,000 per month, it will be seen that the income earning capacity of the region will increase by $175M million per month: Further, this means that the capacity of Lethem and region increase by $2.1B
earning 9 will
In an effort to develop the tourism sector, the Government proposes to invest US$4 million (or G$800 million) to establish a Hospitality Institute. This investment will be in addition to the Marriott Hotel and CJIA expansion. Programme Output Impact TOURISM DEVELOPMENT
Proposed spending Hospitality Institute USD 4M/$800 M
This amount will see the establishment of the Hospitality Institute Course includes: 1. Business Core 2. Hospitality Management 3. Food and beverage Preparation Etc.
Impact on Economy This will see a direct investment $800 M into the economy where numerous jobs will be created for construction The establishment of this institute will definitely expand the Human Capital base of the country
With a highly skilled labour force, productivity will be at its optimal and would allow for efficient and effective utilization of resource leading to an increase in Total direct production tourism and hospitality - Demand for sector value teachers will increase
Total tourism hospitality
direct and sector
value is between US$131,471,820 and US$304,925,083 with a likely estimate being closer to the mean estimate of US$214,874,091 (or 8.3% of GDP). For the total value to be US$214,874,091, the following would have to be true: 1. There are a total of 176,642 tourists in the year. 2. Of this total, 149,616 of these tourists come to Guyana for the purposes of visiting family, friends, personal business, or one day trips. 3. These ‘visitors’ spend on average 15 days in Guyana. 4. These ‘visitors’
Arrivals
Airliftessential for tourism development
spend on average US$60 per day. 5. Of the total, 8,832 of these tourists come to Guyana for the purposes of adventure or nature tourism, or scientific research. 6. These ‘dedicated tourists’ spend on average 13 days in Guyana. 7. These ‘dedicated tourists’ spend on average US$206 per day. 8. Of the total, 18,914 of these tourists come to Guyana for the purposes of business. 9. These ‘business travellers’ spend an average of 7 days in Guyana. 10. These ‘business travellers’ spend an
average of US$226 per day. 11. The tax revenue rate collected by the Government from all of the above expenditure is 15%.
Over the last 10 years, visitor arrivals have been increasing significantly in Guyana.
Occupancy Rate
Tradeshow
In 2012, there is a recorded figure of over 176,000 visitors compared to 10 years ago when it was merely 70,000 to 80,000. In 2013 Arrivals was 200235 and this represent 11.6 % increase. We are in the top from the Caribbean that recorded double digit growth As January 2014 this year, the GTA
recorded a 6.35 per cent increase in arrivals compared to the corresponding period last year. CONVIASA (Venezuela) and COPA (Panama). COPA – fly to 69 destinations and 30 countries. Therefore our network reach and accessibility to Guyana is about 1B people. COPA currently fly to the following destination : 1. Brazil 2. Argentina 3. Colombia 4. Ecuador 5. Chile 6. Peru 7. USA 8. Canada 9. Venezuela 10. Panama
Travel commenced operations
Span in
December 2013. (USA & Canada)
2013 – 76.2% with months September and December in the high 80s %
New Tradeshows Adventure Travel Expo – Washington DC New York times Travel Show – high end market reach in the USA …where we have the best airlift Guyana over the years has continued to participate at European tradeshows(ITB Germany, WTM London & BirdFair - which
attracts the highest numbers of nature, adventure travellers.
in addition to the existing shows, Guyana will participate at tradeshows in the USA which has great airlift and the Latin America which will be served by CONVIASA and COPA Airlines. These new tradeshows include: 1. Adventure Travel Expo, USA 2. New York Times Travel show, USA 3. Virtual space (COTTM tradeshow in China) 4. Guyana Road shows in: a. Suriname b. Barbados c. Argentina d. Brazil e. Panama
Publication In 2013, Guyana was been featured in regional and international publications such as : Caribbean Beat Zing Magazine 16 Birding Publications – Cox and Kings The Guardian- UK The CTO- Caribbean Destination Magazine.
Reach Caribbean Beat – 500,000 Zing Magazine – 250,000 Birding Publication – 1.5M The Guardian, UK – 1.027M CTO Magazine- 850,000 BBC Wild Life magazine237,000
Fortune 500 Magazine; this is a global leader in business journalism with a circulation of over 850,000 and a global readership of nearly 5 million. The Report Company – China
This is a global leader in business journalism with a circulation of over 850,000 and a global readership of nearly 5 million. They did a Destination feature on Guyana in Chinese language for distribution in China – the target was Investors, Businesses and Tourist – a reach of approximately 100M
people Films/Documentary Gold Rush
4.22 M people viewed this programme. In 2013 Discovery Channel concluded filming an entire season (10 episodes) of the popular show “Gold Rush”. This was voted the number one most watched show in America. In 2012, this show was filmed in Guyana and was a major success. Investment – $2BGD
Blue Paw (Germany) Documentaries Source of Essequibo river Day of the Caiman Eyes of the Harpy eagle Ananconda Big 5 Monster Fish Documentary by National Geographic
Kids Series - by BBC
The Hunt – By BBC
Reach approximately 40 M viewers
This in production – but it is expected to have a reach of approximately 5M viewers world wide This is been shown currently in UK, and BBC worldwide service reaching approximately 20M viewers This capture how the Harpy eagle hunts – this was done in September 2013 and its
CPL
due to be air worldwide in June of this years and it is expected to have a reach of about more than 20M viewers 36M people had the opportunity to watch CPL
WHAT IS SAID BY PUBLICATIONS National Geographic In 2014, Guyana has been Traveller Magazine referred to as the best kept secret of South America, by the prestigious National Geographic Traveler Magazine, and is also among the 20 destinations being touted to visit in 2014. The destination has been featured in National Geographic Traveler Magazine - Best of the World list, featuring 20 destinations to visit in 2014. “The list reflects what’s authentic, culturally rich, sustainable and superlative in the world of travel today,”
BBC
Guyana was endorsed by BBC as ‘Five Destinations you should know more about’ in 2014.
CRUISE TOURISM Yacht Rally
In 2013 over 50 yachts visited Guyana and they spend on average 21 days in the Essequibo river. Assuming that they spend 137 USD (IFC) per day – this would translate to 34.1M (173*21*46). This is an injection 34.1M in the economy In 2014 we are expecting another rally of about 75 yachts to visit – assuming that 160 person visits and they spend 137USD per days….this would translate to 137*160* 21 days – 92M G$
Cruise
In 2013 In 2014 – March 23& 24, 2014. Mirnerva was here for 2 days with 356 passengers and a crew of 160 persons. Passengers went to 1. Kaieteur Falls (16) 2. Arrow Point (79) 3. City Tours (160) 4. Mangrove Heritage Trails (50)
5. Shopping Approximately 3.6M GD$ was expended by passengers on these tours Additionally 3 more Cruise Ships are expected this year- it is expected that some 850 passengers will visit Note We have an investor who is willing to invest in a Marina in the Essequibo river – when this comes in being it would attract more yachts, serve as a repair and dry dock and storage facility and also generate jobs INVESTMENT IN TOURISM SECTOR
In 2013 total value of investments in the Tourism Sector was $53,905,900,000 this includes: - 18 tourims projects - Total jobs created 626 In 2014 total value of investments in the Sector is projected at - $70 Billion - 30 projects
- 300 jobs 4 new hotels in addition to the Marriot Hotel Park Vue – opened in January – 32 rooms Millennium Manor – 50 rooms (under construction) Aruwi Enterprise Inc – 60 rooms (under construction) Rupununi Eco Hotel – 60 rooms (under construction) These hotels approximately
will
create
399 rooms *3jobs (IFC) 1,197 director jobs NEW INITIATIVES 2014
New Initiatives 1. Destination DVD (10 mins); vignette DVDs showcasing different aspects of Guyana’s heritage and culture 2. Guyana Gold Festival 3. Drive Guyana, an umbrella concept that encompasses the North and South Pakaraima Safaris, and expedition to the Rodeo 4. Tourism Ambassador
=
Programme 5. Celebrity Hike – seek participants from Trinidad 6. Melting Pot, a three day event to be hosted at Stadium to commemorate Emancipation Day 7. Caribbean Rum and Food Festival 8. Familiarisation tour for Chinese to visit Guyana 9. Direct airlift from UK to Guyana (multi destination packaging) 10. Essequibo Camping and Fishing Getaway – target is university students, both UWI and UG 11. Tourism stakeholder retreat, where members from the private and public sector will discuss ways in which they can collaborate and partner for growth in the industry 12. Yacht Rally that will include yachts from Trinidad and Tobago, Antigua and Suriname 13. Encourage travel
for FIFA – to work with Fly Jamaica to partner with Brazilian Airlines to facilitate air travel 14. Demerara River Cruise 15. Fort Island Dinner 16. Increase visits to Fort Island, target is school children to teach them the importance of Guyana’s Dutch heritage 17. Independence Day brunch at the site of the 1823 Monument 18. Light Show – collaborate with Dave Martins 19. MOUs with tourism organisations 20. Cruise terminal (feasibility study to be completed)
Consolidation of the agriculture sector Mr. Speaker notwithstanding the need to create and expand non-traditional industries, we have to consolidate our traditional sectors. In this regard, we will continue to invest in the agriculture sector. This investment is necessary as the agriculture sector employs 33 percent of the labour force and accounts for 25 percent of Gross Domestic Product (GDP) and 50 percent of total exports. The agriculture sector plays a critical role in our socioeconomic development. It should be noted that without
growth in the agriculture sector, expansion in other sectors will be severely curtailed or weakened. This is clearly established in the study by (Include name of study - S. Pasha, Tarron Khemraj and Dhanraj Singh mentioned earlier. This study provides econometric evidence that growth in the agriculture sector contributes positively to growth in both the industrial and service sectors. Mr. Speaker equally important is the undeniable fact that the agriculture sector is important for ensuring the country’s food and nutrition security. Given the growing global demand for food and the fact that the country is well endowed with fertile land and fresh water, the agriculture sector is critical for our future economic and social development. It should therefore come as no surprise Mr. Speaker, that the agriculture sector has always featured prominently in all of the development strategies promulgated by the government and this government has consistently made significant investments in the sector. In this year’s Budget the RICE SECTOR will benefit from $500 million to improve the sector’s resilience and competitiveness. Non-agricultural sector will benefit from … million; and SUGAR industry will benefit from $6 billion I will refrain from speaking at length or in detail on this sectors as the Honourable Minister of Agriculture will do so during these debates. However, I feel compelled to speak on sugar. Mr. Speaker, while there has been much debate over the support granted to the sugar industry, I wish to state categorically that the Government of Guyana has no apology to make for its support to GUYSUCO. This corporation is too important to be regarded as “Black hole” or the ‘problem of
a particular political’ party. In and out of Government, the PPP has always stood resolutely with the INDUSTRY because of the role it plays in the socio-economic development. Mr. Speaker, for this Government GUYSUCO is seen as a corporation which directly support the livelihood of over 18,000 sugar workers and 120,000 persons indirectly. Notwithstanding the difficulties confronted by the industry, over the past four years, this industry contributed approximately 4.1 percent to our Gross Domestic Product (GDP). If this industry were to closed, the economy could plunge by over 4 percentage points or lose over $21 billion in income annually. This industry also generates over US$100 million annually in foreign currency (which is equivalent to G$20.6 billion annually based on the prevailing exchange rate or 10.16 percent of the total export revenue). The export revenue generated by GUYSUCO is not a trivial issue. In fact, Mr. Speaker, GUYSUCO is one of the largest earners of foreign currency in Guyana. If we allow the industry to COLLAPSE, this will result in the loss of foreign currency thereby making it difficult for us to purchase critical consumer and industrial goods. It will also impact on our capacity to honour our international debt obligations, deleterious effects to our exchange rate. Mr. Speaker the Government is not prepared to risk going back to those days when the Honourable Carl Greenidge was Finance Minister and we had limited access to foreign currency. During those days, the shortage of foreign currency had devastating effects on our capacity to acquire even the most basic goods and created hardship for our people. With lower import earnings it is also important to note that the Current Account Balance and Overall Balance along
with our Gross deteriorate.
International
Reserves
will
also
Mr. Speaker the subsidy which most commentators are upset about is a reflection of the sociopathic thinking of these commentators as well as the misconception about the beneficiaries of the subsidy. The $6 billion that is given to GUYSUCO as subsidy is directed not at supporting inefficiencies but preserving the jobs of the 18,000 persons that are directly employed in the sector. If we are to look at this intervention from this perspective, it would work out to a subsidy of $27,000 per month per worker. This is almost equivalent to the electricity subsidy given Lindeners which work to 23,000 per month for each customer in Linden. Any government with a modicum of empathy for the poor working class people would therefore support the intervention. Mr. Speaker, we must be recall that the sugar industry was not always in the financial position that it finds itself. Under both PNC and PPP Government, the sugar industry has provided over $34 billion in the form of sugar levy which was used to subsidize other industries; such as bauxite. Under the PNC $12 billion was collected and between 1992 and 1999 over $22 billion was collected by this government. If this money taken out of the industry was retained and used to modernize its operation the industry instead of supporting other sectors, this industry would have been in a far superior position today. In fact Mr. Speaker if one were to compute the Future Value of the sugar levy, using a rate of return of 4.00 per annum (which is equivalent to the average inflation rate) over a the period: 2000 to 2013, these funds would have accrued to $61 billion.
As mentioned earlier, the industry is too important for the economy. It is noteworthy, that industries which contribute less to GDP in advanced economies have benefitted from Government assistance. Only recently, the Auto industry in the United States, for example, which merely accounts for less than 4 percent of GDP has benefitted from significant bailout during the global financial slowdown. Building the domestic private sector Most of the macroeconomic reforms pursued by the Government since it was democratically through free and fair elections in 1992, were aimed at making the private sector the catalyst for economic growth. Since 1992 the government successfully implemented an extensive range of reforms with support from international financial institutions such as the International Monetary Fund, World Bank and InterAmerican Development Bank. These reforms produced many benefits including: (i) reforms to the country’s tax system, (ii) massive investment in the country’s human capital through the social spending, e.g. health and education (iii) massive investment in the country’s physical infrastructure, (iv) greater social, economic and political stability (v) stronger public institutions, and (vi) reforms to the financial system which is responsible for greater access to financial resources as reflected by lower interest rates and increased domestic credit to the private sector (vii) Mr. Speaker, Budget 2014 makes numerous provisions that are intended to create gainful employment for all our people. This will be made possible with the investments proposed in the Budget. Earlier, I illustrated how investments in the social sector the water and housing sectors alone, some … jobs will be created.
Apart from maintaining sound macro-economic fundamentals, stable prices and robust private sector credit, this year’s budget will not introduce any new taxes on the corporate sector. Budget 2014 also set aside funds to develop critical infrastructure to support our local private sector and provide additional allocations to stimulate Small and Medium Scale Enterprise (SMEs). The Government’s decision is driven by the empirical evidence which suggest that Small and Micro Enterprises (SMEs) contribute significantly to economic growth as well as agents of change, innovation and pioneers for creating new technologies. In Guyana available estimates suggest that SMEs account for 40 percent of total employment and contributed approximately 28 percent to Gross Domestic Product (GDP) in 1998. In spite of their importance to the country’s social and economic development, SMEs have been confronted with several binding constraints. The most important binding constraints faced by SME are: (i) limited access to finance, (ii) high cost of borrowing, and inadequate advisory services as well as business training and management skills. In recognition of the important role of the small business sector and the constraints faced by these businesses, the Government of Guyana enacted the Small Business Act of 2004 thereby creating the legal and policy framework for promoting the small businesses in Guyana. Specifically, the Act provides for the establishment of support programs and incentive regime for small businesses, and the creation of a Small Business Bureau (SBB), Small Business Council (SBC) and Small Business Development Fund (SBDF). In addition, the Act guarantees a minimum of 20 percent of government procurement to small businesses.
In 2013, the Government also launched the Micro and Small Enterprises Development (MSED) project which will be executed over the next four years. This project is designed to assist small businesses in the low-carbon sector with collateral guarantees to support loans not exceeding $30 million, interest subsidy, small grants of $300,000 and business advisory services and training. Under the MSED project, it is envisaged that 4,400 jobs will be created through the support of SMEs in the low-carbon sector. The Amerindian Development Fund and CARILED Programme were also launched last year to support small businesses. Budget 2014 proposes a new initiative in the form of the Rural Development Fund. Under this initiative $1 billion will be set aside under a revolving fund arrangement to support SMEs across Guyana. RURAL Mr. Speaker, based on collected on IPED Development every loan of $282,000 creates one job Fund in the Small Business Sector. If one were to use this investment-to-job ratio, the provision of $1 billion in this year’s budget has the potential to create approximately 3,546 jobs. To illustrate what this project means to the average man, let us use the island of Leguan, with a population of 3,300 persons, as an example. Assuming an average household size of 4 persons per household, this means that if the funds were directed at Leguan approximately approximately 825 households on the island: 3,300 á 4 = 825 households Now if $100 million is Leguan it would mean that:
invested
in
100,000,000 รท 825 = $121,212 will be invested per household OR $30,303 will be invested per person This means that for every 2.3 household, 1 job would be created: 282,000 รท 121,212 = 2.3 households or 1 JOB Further, this means that 355 jobs will be created with the investment of $100 million: 825 รท 2.3 = 355 Assuming that these new jobs generate an average income of $60,000 per month, it will be seen that the income earning capacity of the island will increase by $21.3 million per month: $60,000 x 355 = $21,300,000 per month Further, this means that the earning capacity of the island will increase by $255.6 million per annum: $21,300,000 x 12 = $255,600,000 per annum Promote inclusive or balanced development through social sector spending and initiatives that targets vulnerable groups (women, youths, hinterland communities, senior citizens etc) Mr. Speaker, the 2014 Budget provide, like every budget presented by the PPP Government is people focused. This is
evident from the significant allocations to the sector and initiative targeting vulnerable groups. WATER SECTOR
social
Proposed spending for water sector In excess of $2.5 billion of which: - G$1,135 million is allocated for Coastal Programme reflecting a per capita investment 9,000. - G$627 million is allocated for the Linden Programme reflecting a per capita investment of $30,000. - G$190 million is allocated for the Hinterland Programme reflecting a per capita of $31,000. - G$600 million is allocated for the Georgetown Sanitation Improvement Programme reflecting a per capita investment of $11,000 Output The spending will see the construction of 5 new wells; construction of two (2) new water Treatment Plants; 12,000 new service connections; and upgrade of 6,000 existing connections. IMPACT Impact on economy: The proposed spending will result in Direct investment of $2.9 billion with value added impact of $1.3 billion. The total impact is estimated at $4.2 billion. 20,000 persons will benefit from new service connections on the Coast, Linden and Hinterland communities.
In excess of 180,000 persons will benefit from improved water service and quality, improvement of sewerage disposal efficiency. The investment will create over 1,100 jobs Demand for local and imported construction materials will also increase: - Importation market for over 5,500 sacks cement - resulting in the creation of jobs in the packaging of the materials. - Demand for 1,600 loads of sand –jobs created and demand for local materials - Demand for 3,470 m3 stones - jobs created and demand for local materials - Over 3,000 m timber required – Demand for local construction materials - Demand for over 22,000 lengths of pipes - Increased importation of raw materials for the manufacture of pipes. - Manufacture or importation of nearly 2,200 pipe fittingsIncreased importation of raw materials for the manufacture of pipes. - Increase of treated water coverage from 49% presently to over 65%. - Increase access to potable water in Hinterland from 71% to 80 % and at least 25% cost recovery. HOUSING SECTOR
OUTPUT - 5,900 house lots to be distributed - Upgrade of 45 km of existing road in 36 villages such as Sophia, Prosperity (aka Barnwell), Diamond, Enmore, Eccles North, Eccles South, Grove, Tuschen,
-
-
-
Zeelught, Parfait Harmonie, Vryheids Lust, Foulis etc. Construction of 176 Core houses @1.8 million each Construction of 100 single flat houses @$3.7 million each 50 house lots for nurses, police and teachers Distribution of 134 low-income families on the Coast will benefit from a subsidy of $200,000per family. Distribution of 54 subsidies for Hinterland families ($54 million or $1 million each). This will create over 200 jobs in Regions 1 and 9. 71 low-income families will benefit from improved sanitation in Sophia and La Parfaite Harmonie
IMPACT Impact on economy: - The proposed spending will result in direct investment in economy of $4.4 billion with value-added impact of $1.98 billion. The total impact of the spending approximates $6.38 billion. - It will also create direct employment for more than 1,700 persons with various skills, including: Engineers, Architects, Suveyors, Foremen, Operators, Drivers, Masons, Carpenters, Plumbers, Electricians, Welders, Fabricators, Mechanics and Servicemen, Clerks of works, Accountants, Data Processing Clerks, GIS Specialist and AutoCAD Technician, Security, Checkers, Skilled and Semi-skilled labourers.
- Over 30,000 existing households will benefit from improved roads in 36 communities across Guyana. - Over 134 Coastal low-income household (or 536 persons) will benefit from subsidy. - Over 54 low-income households will benefit from the Hinterland Home Improvement Subsidy. This investment will also create 200 jobs in Regions 1 and 9. - Demand for 40,000 truckloads of construction of material: White sand, loam, chrusher run, laterite, asphalt, aggregates, cement, timber, steel, zinc, hollow block etc. Old Age Pension In this year’s Budget Old Age Pensioners are promised yet another increase. The new pension promised is 13,125; almost four times more than what it was in 2006. Unlike in the past, when persons were required to pass a MEANS TEST to determine eligibility, this is no longer the case. Every single Guyanese at age 65 and above is entitled to this pension. It must be noted Mr. Speaker that old wage pension is NOT intended to be a salary. It is a non-contributory pension and serves as top-up on other pensions and benefits our senior citizens enjoy locally. It is therefore mischievous for the opposition members to present the ‘Old Age pension’ as the only source of income given to our senior citizens.
EXAMPLE: Old Age pension - $13,125 NIS Pension – $17,500 (minimum) Total - $30,625 Electricity subsidy - $2,500. Water subsidy - $1,666.67 The total benefit for someone who benefit from both NIS and Old Age pension would amount to $34,791 which is $208 shy of the minimum wage. Mr. Speaker I dare say that a mere … percent of eligible pensioners receive the minimum pension. It therefore means that more than … percent earns in excess of the minimum wage. Youths/Children Mr. Speaker, Budget 2014 introduces a new measure, the CASH GRANT to improve enrollment and attendance at school, inclusive of nursery, primary and secondary. The Cash Grant of $10,000 will benefit approximately 188,406 families. This translates into an increase of more than G$1.9 billion in disposable income. This intervention will supplement other interventions such as the School Feeding Programme and School Uniform Programme. To date a total of 94 out of the 138 primary schools in the hinterland are involved in this programme. This represents approximately 16,000 of 19,000 (84%) of the children being targeted. This works out to approximately $2.8 million
per day to provide a meal per each child enrolled and present at school. This includes children in the primary grades, those in the nursery class and those in the secondary classes of primary top schools. Region 1 – Region 7 – Region 8 – Region 9 – Total – 94
32 schools 24 schools 17 schools 21 schools schools
School Uniform Programme - $1,500 per annum and will benefit approximately … families. This would translate into … in additional disposable income.
Hinterland projects
Given the high propensity of poor families to spend, this would translate into higher economic growth. The programme also generates other benefits. A recent world bank reports show that the school feeding programme impact positively on attendance. The 2014 Budget propose numerous initiatives for hinterland communities. Among these include: Amerindian Development Fund – US$6 million (G$1.2 billion) Land Demarcation Rural Development – US$5 million (G$1 billion) Hinterland Road – G$1 billion Maintaining airstrip - $231 million Hinterland Water Project – G$160 million Core Homes 54 Hinterland subsidy @ G$1 million each -
$54 million to benefit 1248 Hinterland scholarship scheme million
–
G$74.6
Concluding Remarks Mr Speaker, the PPPC administration has sought over the years to restore the dignity of Guyanese. Dignity which was lost during the period of PNC/APNU leadership, a period when our economy and the spirit of our people was broken. The 2014 budget represents another prudent fiscal presentation aimed at sustaining and expanding the economic opportunities of our people. The 2014 budget represents another effort by the PPPC administration to improve the social performance of our society, to continue the process of building a productive and prosperous nation for all Guyanese. The 2014 budget is fiscal plan with measures catering to all Guyanese, measures to restore our dream that Guyana can and will be a place of prosperity and success. Mr speaker it the hope of the PPPC that our colleagues will see the rationale, purpose and objective of budget 2014 and lend their support. Our purpose, is the purpose of all, to improve our nations well being and restore prosperity to Guyana. Thank you