…Jordan says growth rate was 2.1 per cent last year

GUYANA’S economy has grown by some 2.1 per cent but has failed to live up to the robust performance that was expected, Minister of Finance Winston Jordan told reporters Friday at a news briefing. He is however predicting resurgence in rice, forestry and the bauxite sectors this year.

Growth in the country’s Gross Domestic Product (GDP) for 2016 stood at 3.3 per cent, which was higher than the projected 2.6 per cent. Jordan noted that even at the half-year mark, it was realised that the country’s growth rate would not increase, given the state of the country’s sugar industry. “At the end of the day, it turned out to be even worse than we predicted. Even though there was positive growth for last year, the growth rate ended up being 2.1 per cent,” said the Finance Minister. He explained that 218,000 tonnes of sugar was budgeted for but only 137, 307 tonnes was produced. Rice on the other hand saw improvements as that came in at 630,104 tonnes, as opposed to a budgeted 600,000 tonnes while bauxite performed poorly again.

“Bauxite… that again did not do quite well; we had budgeted 1, 726, 008 tonnes [but] bauxite came in at 1, 459, 223 tonnes,” said Jordan. While describing the performance of the gold sector as “a major disappointment”, the minister said only 653, 674 ounces of gold was produced as opposed to an expected 694,000 ounces.

The forestry sector has started to rebound, Jordan said, noting that the sector is showing signs of recovery after a lapse over the past two years. Some 318,000 cubic metres was budgeted with 349,900 cubic metres being received. “As you can see, very indifferent performances in the sectors and I think I have been quite open with you when it comes to this economy. This economy has not changed much over 50 years; it depends on one or two products, which depend on what prices are,” the Finance Minister stated.

He reminded that the country’s “critical sectors” have always depended on “some grandfather” or a protectionist market. In the case of sugar it was the ACP market, for rice it was the Venezuelan and Trinidadian markets. However, the Venezuelan market is no longer available officially, he said, which explained why the rice industry’s performance had declined.

Notwithstanding the challenges in that sector, Jordan said it has been able to rebound and this year, significant improvements are expected, given signs from the first crop. “This has been boosted by reasonably good prices and new markets – Mexico was asking for as much as we can produce, Cuba the same thing,” the minister said.
RUSAL to continue

In the case of forestry, Jordan said that sector is poised to do well, while as regards the bauxite sector, he received a note from Russian bauxite company RUSAL, which operates the Bauxite Company of Guyana Inc. (BCGI) through its representative Vladimir Permyakov, which indicated that Oldendorff Carriers Guyana Inc. informed RUSAL’s management that it will resume its on-loading and trans-shipping operations in Aroaima and other areas.

Permyakov said the decision came after talks between the two entities. As such, he told Minister Jordan that his company will resume its full-scale mining and production activities, while noting that RUSAL is committed to its business and social engagements here. “That should be some relief for Guyana, our workers, and our expectations for growth in 2018. I hope that allays all the fears that would have been expressed,” Jordan stated.

On April 6, the United States (US) treasury announced sanctions against 12 Russian oligarchs and 12 companies which they own or control on the grounds that they were engaging in “malign activities”. Among the companies are En+ Group and RUSAL, both of which are owned by Russian billionaire, Oleg Deripaska, who was also sanctioned.
Since then, Russian stocks have crashed, aluminium prices have surged, international financial groups have distanced themselves from the company, and two non-executive directors have resigned. RUSAL has a 90 per cent stake in the BCGI, while the remaining 10 per cent belongs to the Government of Guyana.

Meanwhile, as it relates to fiscal matters and revenues, Jordan said, “We did exceptionally well. Revenues remain buoyant and continue to be exceptionally buoyant.” “Expenditure has been held in line and the outcome has been a deficit to Gross Domestic Product (GDP) that was slightly smaller than we projected; which in any scenario is good news.”

Additionally, the Finance Minister noted that the country’s debt continues to be kept in check and managed prudently, but noted that this year “we are looking forward to a better performance than 2017.” He expects that all sectors with the exception of the sugar industry will perform well. “Sugar is going to do poorer than last year. Sugar is not slated to do anything better than that. In fact, it is going to be worse than that,” he stated.