–charts way for economic recovery, outlines plans to sustain growth

PROGRESS in the local economy over the next year will be driven mainly by the Government’s proposed $383.1 billion Budget 2021, which sets out a plan for recovery, outlines policies to catalyse rapid economic growth in the near and medium term, and lays the foundation needed to ensure that growth is not transitory but sustainable for the longer-term.
Budget 2021, the country’s largest budget, is the first full-year budget presented by the People’s Progressive Party/Civic (PPP/C) administration since being elected to office in August 2020.
It comes after the emergency budget of 2020, which was prepared under a compressed schedule, and arrived in the National Assembly well into the second half of the fiscal year, as a result of the protracted March 2, 2020 General and Regional Elections.

“That emergency budget delivered on this PPP/C Government’s promise to provide immediate protection and relief to the long-suffering people of Guyana, and breathe some life into the then moribund Guyanese economy,” Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh said during his five-hour-long presentation to the National Assembly on Friday. According to the senior minister, Budget 2021 seeks to firstly position Guyana to navigate the novel coronavirus (COVID-19) pandemic for as long as it is around.
The aim is to keep the population safe from the pandemic, containing further spread, treating those who are infected, providing vaccines as soon as they become available, and reopening the economy progressively, and then fully when it is safe to do so.

While protecting the nation is the primary objective, the budget is also aimed at ensuring that there’s a diversified and resilient productive sector by facilitating large-scale private investment in both traditional and new and emerging sectors, creating 50,000 jobs in the next five years, and promoting entrepreneurship at the medium and small-business level.
Budget 2021 will also initiate investments in catalytic and transformative infrastructure, including energy infrastructure to ensure adequate supply at a competitive cost, and transport infrastructure to improve international connectivity, and unleash domestic production and productivity.
“We will be establishing world-class social services such as education and healthcare, so that these services are available to the domestic population, but also with a view to entering the international market for providing these services to a regional and global clientele.

“Attention will also be placed on improving the quality of public services, and creating a conducive environment for doing business and interacting with government, including by deploying technology-based solutions, as well as reducing bureaucracy and red tape,” Dr. Singh said.
All of this will be done with respect for the Constitution and the rule of law, maintaining good governance, safeguarding access to justice, and the preservation of a safe and secure environment for all Guyanese and visitors to Guyana.

ECONOMIC POWERHOUSE
For the medium-term, the plan is to make Guyana an economic powerhouse, where every single Guyanese person can live, learn, work, and retire in dignity and comfort; where national prosperity is a reality, and where individual prosperity is a realistic prospect for all who are prepared to invest the required effort.
“The achievement of that objective requires a broad-based resilient productive sector, including vibrant industrial and manufacturing sectors, creating jobs for meaningful and rewarding employment. “It also requires the cultivation of conditions conducive to the emergence of a dynamic entrepreneurial and small-business sector. Additionally, it requires an education sector that equips all of our people, including those seeking alternative pathways to work, with the skills that they need to play meaningful roles in the economy of today and of tomorrow,” Dr. Singh reasoned, noting that foremost amongst these will be technical and technology-based skills.

Finally, the minister said it requires all of the other prerequisites to improved quality of life being in place, including world-class healthcare facilities and programmes to nurture the most vulnerable members of society, as well as facilities and programmes to encourage and promote the talents of young people.
The budget also outlines measures which encourage sustainable progress and growth. Among those measures is the restoration of zero-rated status on basic food items and household necessities. “In fulfillment of another one of our Manifesto promises, we will restore to the zero-rated status all of the food items and other basic household necessities that were previously zero-rated at the time we demitted office in 2015. These items include: Basic wheaten flour, basic breads, oats, unflavoured cracker biscuits, cooking oil, locally-produced bed sheets and pillowcases, toothbrushes, etc…,” Dr. Singh said.

REDUCTION IN WATER TARIFFS
He also announced a five per cent reduction in water tariffs across the board, targeting consumers at all levels.
This, he said, will be supplemented by a reduction in the cost of construction and home ownership. The construction sector is a key sector and a contributor to economic development.
“Along with the significant developments that we will see taking place within the sector over the medium-term, the PPP/C Government has committed to providing 10,000 house lots annually. We have worked tirelessly to clear the backlog of applications, and to promote home ownership across the country, while providing access to financing, recognising how important home-ownership is to the economic empowerment of individuals and families,” the senior minister said.

To aid the achievement of this vision of home-ownership for all Guyanese, the Government is proposing to zero-rate the VAT for stone imported for construction and housing from CARICOM, locally-produced pre-stressed concrete piles, locally fabricated mild steel beams for building construction, and locally-manufactured roofing and PVC products for building construction.
The Government has also announced an increase from $10 million to $12 million in the ceiling for low-income loans, a move which will make housing loans more affordable to borrowers within that range. The ceiling at the New Building Society will be increased to $15 million.
The Government, through Budget 2021, will also be removing VAT on data for residential and individual use.
To further reduce the cost of transportation for hinterland communities and operators, the Government will also remove the duty on ATVs for use in the hinterland.
As promised in Budget 2020, the Government will be introducing a cash grant of $15,000 per child to be given to the parents of children in the nursery, primary, and secondary schools in the public school system.

Also, as promised in Budget 2020, the Government will be increasing old age pension from $20,500 to $25,000 with effect from January 1, 2021. This will benefit over 60,000 persons, and put an additional $4 billion of disposable income in their hands.
“I now wish to announce that we will also be raising the Public Assistance payment from $9,000 to $12,000 monthly, benefiting over 13,000 persons, and providing an additional $500 million in disposable income to these individuals,” Dr. Singh said.
Budget 2021 outlines a set of policies, programmes and projects which will not only directly catalyse growth, but will also see billions of US dollars of private investment realised across several sectors of the economy.