…GMSA hails gov’t for consistent growth, developmental strategies
WITH Guyana’s Oil and Gas Sector on the horizon, the country’s economy is being rebalanced in preparation for rapid economic growth, President David Granger said, as he delivered the keynote address at the Guyana Manufacturing and Services Association’s (GMSA) Business Luncheon on Thursday.
Under his administration, Guyana has experienced consistent economic growth. The continued growth, President Granger said, is as a result of the conducive business environment created by the government through its policies, and investments made by the private sector, in particular the manufacturing and services sectors. Over the next decade, Guyana is anticipated to experience rapid economic development.
“My friends, the cooperation between government and the GMSA is bearing fruit, the economy is being rebalanced to become more competitive and resilient. It is being prepared and prime for rapid economic growth,” the Head of State told the commercial sector in the presence of diplomats and ministers of his government at the Pegasus.
Through an Inter-Ministerial Round Table, the government and GMSA, since 2017, have been working closely to facilitate agro-processing development and the ease doing business in the country. The roundtable resulted in increased Common External Tariffs on imported pinewood, which posed a threat to local timber producers; the establishment of an inventory of the forests; improvements in trade facilitation at the ports; and fairer access to external markets by agro-processors.
As the electorate prepares to decide on the leadership of the country as it enters a new era of development, President Granger his government – the A Partnership for National Unity + Alliance For Change (APNU+AFC) – will lead the country into a ‘Decade of Development’ through the prudent management of the petroleum revenues. The National Decade of Development will span from 2020-2029.
“The decade will witness the emergence of a world class education system aimed at ensuring that the best skills are available for economic development. The decade will include at least 10 major sectors of development among others,” President Granger explained. These are: education reform, accessible information technology and social cohesion; economic expansion, diversification, restructuring, value-added manufacturing and food security; energy security and transition to renewable and clean sources of energy; environmentally sustainable management of natural resources; empowerment of regional and local communities; eradication of extreme poverty, homelessness, and destitution; infrastructural expansion, aviation and riverine transport and hinterland development; internationally competitive trade and investment; national and border security, human safety and international relations; and institutional strengthening and constitutional reform for good governance.
Providing greater details on the ‘Decade of development’ the Guyanese leader said in the area of education, this sector represents a large share of national Budget (17.5 per cent), and 6.3 per cent of GDP. “My government will expand expenditure on education during the decade of development. We shall focus, increasingly, on graduating better trained teachers who could impart more critical thinking skills to children.” He noted that the public education system and curriculum will be modernised to reflect recent research and address advancements in pedagogy and learning for children. “My government will improve access to education. The Public Education and Transport Service (PETS) will be expanded to provide more boats, buses and bicycles to ensure that children attend school. The school-feeding programme will be expanded. The public education will be reshaped to emphasise science, technology, engineering and mathematics (STEM) without de-emphasising the humanities.”
President Granger said the objectives of the ‘Decade’ are aligned to the Green State Development Strategy; Vision 2040 (GSDS) and to the Sustainable Development Agenda and its 17 Sustainable Development Goals (SDGs).
In the area of business, President Granger said the ‘Decade’ will yield increased business opportunities, including for the manufacturing and services sectors. “The ‘Decade’ will ensure an enabling environment which would allow our local businesses to capitalise on these opportunities. We envisage a future of thriving businesses and globally-competitive manufacturing and services sectors.”
He said too that the ‘Decade’ will accelerate the process of the renewal of regional development which commenced with the establishment of four new capital towns at Bartica, Lethem, Mabaruma and Mahdia and the holding of local government elections in 2016 and 2018. These capital towns are expected to become drivers of the economic and social development of our regions, allowing for increased business opportunities and the improved access to public services. The ‘Decade’ will promote sound environmental management of our natural resources. It will witness greater emphasis on preserving and protecting our environment for the benefit of future generations.
The ‘Decade’ will also reduce youth unemployment as government intends to expand initiatives such as the Guyana Youth Corps, the Hinterland Entrepreneurship Youth Service (HEYS) and the Sustainable Livelihoods and Entrepreneurial Development (SLED) which are serving as incubators of youth entrepreneurship and skills-development. The Head of State said the Green State Development Strategy has identified a pivotal role for manufacturing and services in our future economic development.
Reflecting on the country’s economic performance, the Head of State said the Manufacturing and Services Sectors account for more than 60 per cent of the country’s Gross Domestic Product (GDP) in 2018. “These sectors have been expanding the economy over the past four years. The highest rate of growth over this period was recorded last year at 4.1 per cent,” President Granger posited.
In general, the country’s economic growth for the first six months of 2019 was recorded at 4 per cent. It is anticipated that the national output will increase by 4.5 per cent by December 31, 2019. This positive growth rate, he iterated, is partially as a result of the measures put in place by the APNU+AFC Government since it took office in May, 2015.
“Tax policies have been tailored to incentivise the competitiveness of the manufacturing sector. The corporate tax rate, as you know, was reduced from 30 per cent to 25 per cent and tax waivers were provided to ‘green’ energy investments,” he pointed out.
The 2019 Mid-Year Report published by the Finance Ministry also paints a positive picture of Manufacturing and Services Sectors, among others. In the first half of the year, the manufacturing sector expanded by 3.6 per cent, and is anticipated to record an annual growth rate of 3.7 per cent.
Additionally, the Services Sector grew by 4.6 per cent between January and June 2019 – the highest growth rate recorded since 2011. Trade – wholesale and retail – grew by 5.9 per cent; transportation and storage by 5.5 per cent; financial and insurance transactions by 4.1 per cent; rental of dwellings by 5.9 per cent; and other services by 10 per cent.
President Granger noted that the indicators suggest expansion of business activity – pointing out that the private sector’s credit increased by 5.7 per cent for the first half of 2019 compared with the same period in 2018. Credit to the mining and quarrying sector increased by six per cent; credit to the manufacturing sector increased by 0.5 per cent and credit to the services sector increased by 7.2 per cent.
For GMSA, the recorded success within the economy, and more so government’s role have not gone unnoticed. At a time when the Georgetown Chamber of Commerce and Industry (GCCI) has expressed concerns about what it has described as a “slowdown in economic activities,” GMSA President Clinton Williams placed on record GMSA’s recognition of the consistent average growth in the country’s economy over the last three years.
“For this, credit must be given to both the state and the private sector. The government for the most part, has embraced developmental strategies consistent with the Sustainable Development Goals but also designed to mitigate against global economic shocks and natural disasters,” Williams told those gathered.
It is the belief of the GMSA that the country’s development strategies must include food security, energy security, rediscovery and the tourism sector, and the pursuit of new economic drivers such as information communication technologies, renewable energy, trade-in-services and importantly, the new and emerging oil and gas sector.
Williams noted, however, that while the private sector has long been touted as the engine of growth in Guyana, the story, so far, has been one of under-realisation of potential.
“This will only change if and when public-private sector exchanges with attendant agreements are swiftly implemented. Prevarication has become a disease that undermines what are often noble intentions. For too long, your Excellency, we have been paying a high price for sloth in the implementation of decisions,” he told the President and those seated.
Like the government, Williams said GMSA is optimistic about the economic future of the country now that the oil and gas sector is rapidly unfolding. However, he said it is important for the State Sector to act with a sense of urgency in making critical decisions.
Though the manufacturing sector continues to experience positive growth, Williams registered GMSA’s concern regarding the unreliable access to and high cost of electricity. “Many of the long-standing jeopardies are inextricably linked to the high cost and unreliability of electrical power. We must reiterate this strangle hold will continue until we slay the beast of expensive and unreliable power; the private sector and particularly the manufacturing sector will continue to perform below potential resulting in a serious knock-on effect on jobs and on the wider economy,” Williams said.
On that basis, he urged that the country quickly enters into an arrangement with ExxonMobil and other oil producers that would allow for the utilisation of part of the current and future crude oil exports receipts for refined oil, at prices that are significantly cheaper than what obtains at the moment. “I wish to say, as well, that while government’s recent initiatives to introduce some measures to reduce electricity costs across the board is a step in this direction, much more needs to be done if we are to realize any significant improvements in our costs of production and competitive advantage on the local, regional and international markets,” the GMSA President said.
The luncheon was attended by members of the diplomatic corps and ministers and representatives of government among others.