— paves way for resuscitation of major productive sectors

By Navendra Seoraj
MEASURES, policies and programmes which comprise the government’s proposed $383.1 billion budget for 2021 are designed to promote the diversification of the economy and enable the resuscitation of the major productive sectors, which have suffered because of the novel coronavirus (COVID-19) pandemic and the protracted March 2, 2020 General and Regional Elections.

Guyana’s focus, over the years, has been mainly on primary production because of restrictive conditions created by exorbitant energy costs and red tape, the very barriers which the new People’s Progressive Party Civic (PPP/C) Government is looking to remove with its budget – the country’s largest ever.

Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, in presenting Budget 2021 to the National Assembly on Friday, said while protecting the nation from the pervasive novel coronavirus (COVID-19) pandemic 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.

Key stakeholders in the private sector, after examining the measures outlined in the budget, have commended the government for crafting a plan that is visionary, comprehensive and spans every sector of the economy.

The Guyana Manufacturing and Services Association (GMSA), in particular, believes that Budget 2021 will help to bring about much-needed impetus for growth and development.
Specifically, for the manufacturing and services sector, and the growth and development of small businesses, the GMSA noted that the budget measures presented were in alignment with many of the proposals and recommendations the GMSA had submitted to the government for consideration.

Among some of the measures which the GMSA was particularly pleased with are the commitment to establish new industrial estates, the $6 billion allocation for enhancement of infrastructure, the provision of an incubator that will help agro-processors and the enablement of manufacturers access to business incubator centres, the allocation of $25.6 billion for the building and upgrading of roads and bridges country-wide, and the allocation of $135 million for the procurement of a single-window system for doing business.

The association also welcomed the plans to invest $832 million into agricultural infrastructure including agro-processing facilities, the injection of $250 million to replenish the small business bureau, and the development of a National E-Commerce Strategy.

The GMSA also acknowledged plans to restore basic food items and household necessities to zero-rated status, reduce duty on industrial grade cement from 15 per cent to five per cent, and zero-rating of locally-produced pre-stressed concrete, locally fabricated mild steel beams for construction and locally manufactured roofing and PVC products.

Those and other measures also piqued the interest of the Private Sector Commission (PSC), a stakeholder which had a critical input in the preparation of Budget 2021.
“The budget is indeed a people-focused budget which is healthy to facilitate broad-based and inclusive growth of the economy in terms of job creation, encouraging private investments and more entrepreneurial activities.
“Dr. Singh should also be commended that while being pro-business, this budget is also pro-working class and factors in a number of new social programmes,” the PSC said in a statement on Saturday.

BILLIONS IN INVESTMENT
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.
The PSC is mindful of the construction boom in the making by the government through its projects outlined in Budget 2021 such as the resuscitating of the housing development drive – targeting 10,000 house lot distributions for 2021.
To this end, the fiscal incentives outlined for building and construction materials coupled with the increase in the mortgage ceiling for low income earners will allow for the housing, construction, and banking sectors to experience significant expansion in their activities for 2021.
These will also facilitate the massive infrastructure development in other areas outside of housing such as hotel projects, new roads and bridges, shore base facilities, public infrastructure, and private sector infrastructure.

The proposed $25 billion allocation for transformational infrastructure development will also lead to the opening up of lands.
According to the PSC, the accessibility and availability of new lands for commercial, industrial, housing development and agricultural purposes will be the driver of economic growth and development on a larger scale. This means opportunity for large-scale investment by the manufacturing sector – both local and foreign investors as well the emergence of new business ventures.
In this regard, local and foreign direct investments are needed to build the country, so as to provide more job opportunities for people.

“There is something for everyone in the budget. The measures outlined will ultimately provide more disposable income and provide more relief to the poor and vulnerable. Taken together, Budget 2021 contains sufficient fiscal measures and public investment programmes that will encourage the growth and expansion of the private sector thus creating more job opportunities for Guyanese, lowering cost of living, home ownership becoming more affordable and more disposable income in the hands of Guyanese working class,” the PSC said.

COMPREHENSIVE PICTURE
The American Chamber of Commerce (AmCham) said too that the budget paints a comprehensive picture of the government’s short and medium-term vision to propel the economy towards a more resilient and diversified growth path.

The chamber, in statement, said it supports the budgetary policies that balance revenue generation while maintaining a favourable investment climate which supports growth in key sectors of the economy.
The increase in investment and spending in the health, education, security, and public infrastructure sectors are commendable, AmCham said.

The organisation also acknowledged the allocation of G$235 million to improve the ease of doing business rankings, and supports the proposed G$250 million to assist micro businesses and aid in their growth.
The continued support to Small and Medium Enterprises (SMEs) is critical, as it will help to mitigate the economic downturn from COVID-19 and contribute to faster and stronger economic recovery.
President of the Region Three Chamber of Commerce, Halim Khan, said too that businesses and enterprises countrywide were anticipating the government’s budget, as resources being allocated to various sectors show tremendous development in key sectors and this encourages business owners to revise their policies accordingly and contribute to the country’s economic prosperity.

President of the Rupununi Chamber of Commerce and Industry (RCCI), Daniel Gajie, in adding his voice, also said that Budget 2021 has something in it for small and large businesses.
He was particularly pleased with the proposed allocation for the commencement of work on the Linden to Mabura Highway.

“We also appreciate the fact that work will start on the hydro power station at Kumu, and allocations for the Solar Farm for Lethem… all of these are positive developments which would allow businesses to improve and reduce their costs,” Gajie reasoned.

The expected results are within reach, as Budget 2021 is anticipated to 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.