The Alliance for Change (AFC) has hailed Minister of Finance Winston Jordan for stellar works in his sector and urged that Guyanese start preparations for a nearing boom in the economy.
“As we said, we are urging Guyanese to prepare for brighter days and a growing economy,” Minister of Business Dominic Gaskin said at the AFC’s weekly press conference on Friday.
The APNU+AFC coalition government is currently executing plans to compile and track data across all sectors, which would see the revamping of the National Bureau of Statistics.
Speaking under both portfolios of AFC Executive and Minister of Business, Gaskin argued that while some persons are saying that the economy is not growing, the facts show that the slowdown was due to external factors, but this country is still meeting growth targets set.
He pointed to economic data and current events in neighbouring countries saying that even with all the “stresses” Jordan was able to plan a budget which includes implementing solid economic measures.
“The AFC notes the various levels of economic distress being experienced by neighbouring countries…The AFC therefore, wishes to commend the Minister of Finance on the prudent initiatives implemented thus far and the general overall management of the economy, in ensuring that Guyana avoids these stresses,” he said.
“The party recognizes that our economy has gone through a period of consolidation due to lower commodity prices on the international markets as well as government’s efforts to curtail illicit activities… However our party believes that the reduction in the rate of growth has been stabilized and is optimistic that the targeted growth rate 4% for 2016 will be achieved,” he added.
Highlighting increased allowances in the public sector, which spins off to increase spending by those persons, increase in the old age pension and concessions from the 2015 Budget, Gaskin said it was clear that some of those factors have helped Guyana cushion the dismal economic realities of its neighbours.
He would later explain that analysts of the economy should note that a two per cent growth rate was achieved in the first half of this year, which tends to be the slower half of the year because according to him, in many cases, the actual budget spending has not kicked in and that spending is expected to increase in the last quarter.
“We are urging Guyanese to prepare for brighter days and a growing economy. We do recognize that there has been a slowdown in spending and I don’t think we are about or trying to deny that. But we are saying, notwithstanding that, there has been positive economic growth. Guyana has not experienced a decline in its economy. Our economy is still growing albeit at a slower rate,” the minister explained when asked why the growth is not reflected in the spending power of the populace.
“The slowdown began about two years ago, largely as a result of the lower commodity prices, starting with the gold sector and continuing with the rice sector …bearing in mind, those two sectors are responsible for a large chunk of our foreign earnings. I think it was compounded last year by the period where there was no budget and therefore very little spending in capital works. We are now on our way out of that decline, but it does take a little while to trickle down to the man in the street and the construction industries… Our economy is continuing to expand,” he added.
‘Informal sector’
He reasoned that the coalition APNU+AFC’s strict stance against narco trade and illicit activities has also contributed to less spending by what he called Guyana’s informal sector. But because statistical data does not come from illegal activities, the party cannot produce hard proof and as such relies on logical information gathering.
“It is hard to measure the impact of an informal sector. It is not a documented trade. There are no books to examine at the end of the year on the narco trade or money laundering… But I think there is a fair amount of evidence that there is a large informal sector operating in Guyana; some in the narco trade, some in smuggling, and some just not registered formally. Because of the measures that are being implemented, where greater compliance is requested all around and there is a lot more scrutiny, there is less spending in those areas,” the minister said.
“We can’t document it but if retailers are saying that there is decreased spending and we know there is an informal economy, I think it is logical to conclude that a lot of that reduction in spending, is occurring in the informal sector also. It cannot be denied that there is a large informal sector of our economy,” he added.
Unemployment statistics
And while acknowledging that critics have also blasted government for large and growing unemployment rates, especially among the country’s youth, Gaskin pointed out that there is no data to determine what numbers they are dealing with and how to plan and evaluate measures to tackle the scourge.
Nonetheless, the David Granger administration is compiling a data bank for present and future reference so that governments will be able to plan for the needs and evaluate implementations in unemployment and other sectors.
“I don’t think we saw unemployment data coming out of the previous government. Our government has undertaken to, by the end of this year, provide data on unemployment. It is way overdue. Every country, one of the main ways in which you judge government’s performance is in the level of employment and to know that for decades we had no official or regularly published unemployment figures is most shameful.”
Further he said, “Sound decisions are based on accurate and up to date information. Where that information is not available, it is difficult to make those decisions. When it comes to unemployment you can implement measures you believe will alleviate the situation but if you don’t have data to tell you what the level is how do you know if the measures are effective or not? We don’t have data and we can formulate strategies to help but we have no way of measuring… The data is very important.
As such he announced that government has planned a project to be implemented shortly for the renovation and proper resourcing of the National Bureau of Statistics.
“We as the government place great stock in data collection and analysis because we understand the importance of data in decision making,” Gaskin stressed.
Data collection
Data collection would also serve for futuristic policy planning by the Guyana Office for Investment (GO-Invest) and the Minister of Business informed that office has been courting many potential investors, some of whose proposals show signals that they could be put into contracts, but he noted it is a process which takes time.
“A large investor doesn’t show up today and start doing business tomorrow. Since we have been in government we have had numerous enquiries and proposals. I can’t think of any that has borne fruit, but I can tell you that there are a number of investments that are in the pipeline so to speak… All areas: agro processing, energy – renewable energy in particular, mining, retail, manufacturing, oil and gas, a number of areas.
“GO-Invest has been busy. Extremely busy. … Data collection was clearly not a priority for the previous government. For instance there was never a way of measuring the impacts of investments or monitoring the activity of investors who would have gotten concessions from the government. So an investor would come in and say I want to invest $100 million and I want to create 300 jobs and that information was noted and that became the record. Whether or not those jobs were created wherever or not the money was invested that information remained in the system and when anyone asked what of GO-Invest that was the information used. That clearly is not something we want to perpetuate and we are putting in place a more responsible system of reporting but that can only apply to the investments of our period in government,” he added.
That data, he said, would be made public as government has nothing to hide on its plans for investments.
He believes too that although there may be objections to some concessions and incentive policies for investors, government would constantly have them reviewed and their impacts measured, although he pointed out that there was no way of tracking investors with incentives to measure how whichever policy chosen was working. He explained, “Prior to our government coming into office there was no real mechanism in place for measuring incentives. We are now attempting to do that to say these are the incentives that were given out during this particular period and these were the results: X amount of new jobs created, X amount of taxes created etcetera,” he said.
Gaskin does not believe that incentives are the main magnet for investors as he reasoned that from a business standpoint that notion can be argued. He said that profitability, stability both economic and political, and fair application of concessions would be the driving force for business investors. “We believe what is even more important than the level of incentives is how it is applied and that it is across the board and not discretionary,” he added.
Small businesses can also expect measures to roll out for them as Gaskin also noted that the new council of the Small Business Bureau was established.
In addition, small business owners in the service and procurement sector will see, in early 2017, major benefits when government enforces the law that they get 20 per cent of all public procurement. “That was something that was ignored during the previous administration. We have made a commitment to developing a programme, also required under the act, for implementing that… next year and it would have a major impact on small businesses in Guyana,” the minister said.
