…Min Jordan defends gov’t stewardship, slams SN editorial

FINANCE Minister, Winston Jordan has defended government’s stewardship of the economy since taking office, reminding that prior to 2015, the Guyanese economy, “thrived on rampant drug trafficking, money laundering and a banking sector in which a few institutions recklessly lent funds for private white elephant projects.”

He made the comments in a letter to the editor, in response to a very scathing Stabroek News Sunday editorial, labelling the administration as incompetent. Jordan in an equally incisive letter said, the mask of that newspaper was finally off and that “it appears that SN didn’t actually want a change of government; rather, it wanted the PPP/C government to change its ways.”

While noting that the newspaper’s editorial board is being seemingly unpleased with any initiative of the government, Jordan said that the Treasury has been forced to bear the cost of a large number of reckless investments by the People’s Progressive Party (PPP) administration, including investments in the Skeldon Sugar Factory, the collapsed insurance firm, CLICO, and the Marriott Hotel. “ It didn’t stop there: the government has had to dole out billions to settle lawsuits as well as meet the cost to retrieve the outstanding US$5M for the sale of the government shares in GT&T,” Jordan said.

The Finance Minister, who spoke directly to the issue of sugar, noted that despite the significant challenges in the sector that the country is now finally grappling with, the government has provided a $37B bailout for the Guyana Sugar Corporation (GuySuCo) to date, and additional funds have been set aside to complete the $5.7 billion severance payment for workers, among other measures. ”But not once have I seen an editorial questioning the management of GuySuCo about its stewardship of taxpayers monies,” Jordan said.

The Economy grew
Turning to the economy, he said that it grew by 4.5 per cent in the first half of 2018, and is projected to grow by 3.7 per cent for the rest of the year. Jordan reminded that prior to 2015, the Guyanese economy , “ thrived on rampant drug trafficking, money laundering, and a banking sector in which a few institutions recklessly lent funds for private white elephant projects.” He said that the “hangover from that lending binge” resulted in an average non-performing loan ratio of 13.2 per cent. He said that at one commercial bank, one out of every three loans is now categorised as non-performing. “This was a significant factor in the immediate slowing of the economy, post-2015,” he noted.

He commended the work of the Commissioner General of the GRA, Godfrey Statia. He said the Auditor General’s Report of 2013 stated that only one third or 992 out of 2,618 registered and active firms, filed tax returns. Also of 75,992 active self-employed persons, only 33,740 filed taxes, paying an annual average of $98,000 per person.

The finance minister pointed out that since the APNU+AFC administration assumed office in 2015 it increased the minimum basic salary of each public servant to $50,000 and ensured subsequent increases, which amounted to over 50 per cent since taking office.”…the three-year old APNU+AFC administration was elected in May 2015 to serve the people of Guyana. We have been doing so; we will continue to do so, regardless of criticisms and detractors, without fear or favour, affection or ill will,” Jordan said.

Reducing the Value Added Tax (VAT) from 16 per cent to 14 per cent, personal Income Tax from 30 per cent to 28 per cent, increasing the tax threshold from $600,000 to $720,000, ensuring employees’ National Insurance Scheme (NIS) contributions are tax free, while ensuring a reduction of Corporate Income Tax for manufacturing companies from 30 per cent to 27.5 per cent, are among the many measures taken by government over the past three years. Jordan said that this occurred even while the administration kept inflation “well in check”, as well as the Guyana dollar/US dollar which as of May 2018 stood at G$212.48 from G$210 in May 2015. “That’s a depreciation of 1.2% over 3 years. Impressive, indeed! Yet, we are conscious that more needs to be done,” Jordan said.

Commendation
He noted that the World Bank’s Country Director for the Caribbean, Tahseen Sayed, commended Guyana for making important strides to promote financial resilience and improve fiscal management, and for embarking on a broad-based reform programme. Sayed noted that the reforms will be vital to building a strong economy that is underpinned by a strategic management of public resources for the benefit of the Guyanese people. Jordan said too that the International Monetary Fund (IMF), the World Bank and the other international lending institutions, including the Inter-American Development Bank (IDB) and the Islamic Development Bank (IsDB) are increasingly viewing Guyana as a stable, well managed country with bright prospects that is ripe for sustainable development.

Ministry staffing and exodus of skills
Meanwhile , regarding staffing at the Ministry of Finance , Jordan said that the policy of the ministry is that employees who reach the age of retirement are not kept on the job, unless they bring some special skill that is critical to the work of the Ministry. They are kept if suitable replacements cannot be found within the Ministry.

The move is viewed also as providing younger civil servants with the opportunities to build careers with the ministry. “I would add that I remain extremely proud of the dedicated and highly competent team working at the Ministry of Finance,” Jordan said, as he lauded their work in undertaking the ministry’s mandate. “Of course, Stabroek News itself is not immune to an exodus of skills, including competent editors and senior reporters, which is sadly apparent in the decline of its journalism over the past decade,” Jordan added, as he noted that he will continue his single-minded dedication to the task at hand as Finance Minister.