The current political impasse has had “no real” impact on Guyana’s economy or its investment climate, according to Finance Minister Winston Jordan, who says preliminary findings from the 2019 Mid-Year Report signal a 4% growth rate in the first half of the year, and project a 4.4% growth for the entire year.
“The no-confidence motion has had no real impact on the economy. People are flocking to Guyana…and I don’t mean for investment opportunities in just oil and gas, we are talking a number of areas,” Jordan told Sunday Stabroek in an interview, while noting that that Guyana has seen an increase in the amount of businesses being registered.
Jordan’s ministry is working to complete the Mid-Year report so that it could be submitted before the annual parliamentary recess, which will begin from the start of next week.
The passage of a no-confidence motion against the government last December has triggered a constitutional requirement for the holding of early general elections. How-ever, following government’s losing effort to challenge the validity of the passage of the motion in court, it has been deem-ed a “caretaker” administration until the polls are held.
With the Bank of Guy-ana’s First Quarter Report saying bauxite and gold were down and sugar was in the doldrums, this newspaper asked Jordan what was behind the growth.
He explained that while the Central Bank’s report is correct in terms of numbers and statistics, first quarter reports, most times, do not give precise projections as it is one of the lowest fiscal periods. “The Bank of Guyana report is correct because it was the first quarter report and first quarter should not be taken as seriously… the first quarter is not a really great indicator of projections or of where the economy would end up, because even as you would see in the sector right now, bauxite would have had some issues then because of the situation between the USA and the Russians, but it has picked up in the second quarter. No one should be really worried or concerned about the first quarter report because that don’t give as precise indicators as the first half report. A better response would come after we produce the report, but for all intents and purposes, the economy is on track for projected growth. It is being pushed by all related activities. Now we expect flat growth in some of the areas, like sugar and targeted growth in some of the areas like bauxite and so on. But our economy, as I have said before and say time and time again, is built on, as my President calls them, the six sisters. That is not going to disappear in a hurry,” he said.
“To get a really good picture if the economy is performing, you have to take away oil and gas and look at those sectors. We are not fixated on… oil and gas. What we are fixated on is the non-oil related sectors. How is your bauxite going? How is your gold going? Your sugar…? Your manufacturing? Power generation? And so on. And we are going to continue looking at, keenly, and examining those, but it is no doubt that the petroleum sector will push economic activities in the other sectors,” he added.
Growth every single year
Citing a packed Liat Airlines flight from Barbados to Guyana on which he travelled, Jordan said that the evidence was there to show that business persons are not deterred from investing here despite the political situation.
Jordan also pointed to an analysis published on the Nasdaq Stock Market website, which identified Guyana as having the fastest growing economy in the world, Jordan brushed off criticisms, saying that he doesn’t deal with conjecture but real numbers and facts.
“People like to say all kinds of things and scoff and say ‘Jordan playing with numbers’, but the reality is that the economy has grown every single year since 2015, notwithstanding all the challenges. And the projections are it will grow from now well into the future; grow and grow, not regress. That is what the projections are, it will continue to grow. As the case may be, I see people trying desperately to play down the NASDAQ report that Guyana… A lot of people are desperately trying to play down that, but it is not Jordan that said that, it was NASDAQ said that,” he said.
The NASDAQ analysis noted that the ranking was based on the average growth rate for the four years (2018 estimates and projections for 2019, 2020 and 2021), which are sourced from the World Bank’s Global Economic Prospects June 2019 data.
The analysis said that with a Gross Domestic Product size of US$3.63 billion (2018 Rank: 160), a growth rate of 4.1% in 2018 and 4.6% in 2019, Guyana’s economy is expected to grow by 33.5% and 22.9% in 2020 and 2021, respectively. The projected spike in growth coincides with the start of oil production here next year. Guyana is expected to be among the world’s largest per-capita oil producers by 2025.
“The interest in Guyana is like never before. Investment is as I have never seen and never been before. I came back last night, not only on a full flight, but several of the people don’t look like me and you. What does that tell you? We know that they’re connected to some business or coming to some business and that has been the trend for the last year and a half or so more. More and more people are flocking here and for—and don’t say oil and gas because all of them are not going into oil. All of them are not even up, mid or downstream and that sort of thing. Some are into scouting out in opportunities in the hotel industry, food, real estate, farming and so forth. Many of them are bringing their expertise and knowledge and knowhow and so on to the specific sectors. It is not just growing, for example, callalloo. It is varieties, integrating technologies and so on. My wish is for them to work closely with our farmers and our manufacturers here that they may benefit and there be that transfer of skills. Equally, our manufacturers and our farmers must have a willingness to work with those people,” he added.
Jordan added that as the Finance Minister it feels good to see foreigners coming to this country because he knows that they will spend. “You can’t not feel good seeing plane loads come here. Every plane loaded that lands here, I get some kind of tax. I would have already gotten a tax before because the ticket already has the tax. They will come and spend a certain amount, they will demand housing. And whether hotel or private residences, they will have to spend on food and other things. So we are generating value, we are receiving foreign exchange, we’re keeping the economy going,” he said.
‘No pot of gold
And turning to criticisms of his stewardship of the economy, Jordan said that he has been attacked with rhetoric suggesting that he implemented 200 new taxes when the record shows that “not a single” new tax was implemented since 2015.
He said this false narrative are perpetuated by the opposition PPP/C to claim that the heavy tax burden is a factor for slow growth. “People think we had a pot of gold when we came into office but people [should] understand there was no pot of gold,” he said. “Some persons also repeat that this government brought 200 new taxes in its four and a half years. I am telling you that is an unmitigated lie. I had to put a stop to that in the National Assembly, when I stood and said that the next time it is repeated we would ask that they name them, otherwise we would move in to sanction whoever said it. It stopped there but it was brought to the public and just keeps going and the newspapers won’t ask them to name it. We have not added any new tax, we have brought down taxes and will move to pull it back even further,” he added.
He said that the ministry was examining ways to ensure that with each new budget, the take home wages and salaries of Guyana’s citizenry will be increased on an even basis.
Further, he pointed out that other incentives, such as no taxes on travel allowance, were also implemented by his government and they continue to press to incentivise taxpayers.
But while persons have asked for annual and other bonuses to be made tax free, Jordan said that such an exemption could see persons abusing the system and using the tax break to evade taxes by lowering salaries and ramping up bonuses.
He said that while taxes are necessary, his ministry will do all in its will to ensure that it continues to find ways of lowering taxes, thereby increasing salaries and wages. “We want your free pay to be more,” he said.
