HON. IRFAAN ALI, M.P.

MINISTER OF HOUSING AND WATER

AND ACTING TOURISM, INDUSTRY AND COMMERCE MINISTER

BUDGET BEBATE SPEECH 2014

BUDGET 2014

Mr. Speaker there is no doubt that Guyana is growing

rapidly and development is taking place due to the

implementation of prudent macroeconomic policies. This FACT

is supported by all the key socio-economic indicators.

Economic Growth

During 2013, the economy recorded positive economic growth

of 5.2 percent. This represents eight years of

uninterrupted positive growth, an unprecedented achievement

in our post-independence history. The only other period

which corresponds with such stellar economic performance

(in our history where Guyana experienced uninterrupted

economic growth) is the period 1991 to 1997; and it was

under the PPP/C government. It is important to note

however, the economic expansion recorded over the last

eight years eclipse the growth episode during the 1990s for

two important reasons:

- firstly, the Guyanese economy expanded amidst a

contracting global economy; demonstrating the

resilience of the domestic economy to external shocks

and efficacy of our macroeconomic management;

- secondly, the variability of the growth rates during

the last eight years was lower than the variability

associated with the growth episode of the 1990s;

pointing to higher quality economic growth

Quality of Economic Growth

Growth episode (2006-2013) – standard deviation 3.91

Growth episode (1991-1997) – standard deviation 13.85

Mr. Speaker, equally remarkable is the fact that the 5.2

percent economic growth posted by Guyana in 2013 is the

highest in the Caribbean according to a 2013 report by

ECLAC entitled “Economic and Social Panorama of the

Community of Latin American and Caribbean States”. Based on

this report Caribbean economies recorded the following

growth rates for 2013: Jamaica (0.1 percent), Trinidad and

Tobago, St. Kitts and Nevis, Bahamas, Belize (1.6 percent);

St. Lucia (1.1 percent) and Grenada; Antigua and Barbuda

(1.5 percent); Dominica (negative 0.5); and Barbados

(negative 0.7).

Economic Growth Rates

Guyana: 5.2

percent

Selected countries in Caribbean and

Latin America:

0.1% (in Jamaica); 1.6% (in Trinidad

and Tobago, St. Kitts and Nevis,

Bahamas, Belize); 1.1% (in St.

Lucia); 1.5% (Grenada and Antigua and

Barbuda); negative 0.5 (Dominica);

negative 0.7 (in Barbados); 3.9

(Suriname).

4.5 (Argentina and Uruguay); 4.0

(Haiti); 3.0 (Dominican Rep. and

Cuba); 2.4 (Brazil); 3.8 (Ecuador);

4.6 (Nicaragua); 4.2 (Chile); 3.2

(Costa Rica); 1.3 (Mexico).

Source: ECLAC - Economic and Social Panorama of the

Community of Latin American and Caribbean State (2013)

Inflation

Mr Speaker, inflation was contained at 0.9 percent for

2013; the lowest in decades. Mr. Speaker contained

inflation rate is important to the growth prospects of an

economy. A low rate translates to minimum variation in the

GDP deflator making the expansion in Real Gross Domestic

Product (GDP) and the growth rate for 2013 unquestionable.

More importantly, the low inflation rate means that the

real purchasing power of the average Guyanese was

maintained.

Domestic Investment and Foreign Direct Investment (FDI)

Mr. Speaker, the buoyancy of the economy coupled with

relatively stable prices and exchange rate, ensured a

conducive environment for the continued expansion in

domestic investment; as reflected by the growth in credit

to the private sector. This outturn clearly reflects the

confidence of the local private sector in the domestic

economy.

Mr. Speaker, according to the ECLAC reported alluded to

earlier, the growth in domestic credit surpassed other

countries in the Caribbean. During 2013 domestic credit in

Guyana expanded by 24.2 percent compared with: negative

23.4 percent (in St. Kitts and Nevis); negative 12.1

percent (Trinidad & Tobago); negative 0.8 percent (in

Belize), negative 6.8 percent (in Antigua and Barbuda); 1.7

(in Bahamas); 11.3 (in Barbados, 17.7 (in Jamaica) and 21.4

(in Suriname).

Domestic Credit to Private Sector

Guyana 24.2 percent Selected Caribbean

countries:

Suriname 21.4; Jamaica at

17.7; St. Kitts and Nevis

at -23.4; Barbados at 11.3;

Trinidad and Tobago at -

12.1; Bahamas at 1.7;

Brazil at 12.9

Source: ECLAC- Preliminary overview of the Economics of

Latin America and the Caribbean (2013)

Notwithstanding the deliberate efforts of the combined

opposition to create uncertainties and make the local

business environment unattractive, I am pleased to inform

this Honourable house that Guyana benefitted from US$217

million in Foreign Direct Investments (FDI) last year. In

2014, FDI is projected be US$345 million or 62.8 percent

above the level in 2013.

Foreign Direct Investment

Guyana: US$217 Million

Selected Caribbean

countries:

Suriname – US$66 Million;

Jamaica – 293 Million;

Belize – 84 Million;

Trinidad and Tobago – 751

Million; Antigua and

Barbuda – 135 Million;

Bahamas – 345 Million.

Source: ECLAC- Preliminary overview of the Economics of

Latin America and the Caribbean (2013)

Gross International Reserves

Despite the marginal contraction in our Gross International

Reserves our import cover remains extremely strong. During

2013 our import cover was computed at 3.9 months; this is

well above the acceptable level of 1.52 months as suggested

by the Barnichon (2009) Optimisation Framework.

International Debt

Mr. Speaker international debt stood at US$1,246.5

million at end-December 2013, 8.3 percent lower than the

level at end-December 2012. Apart from the reduction in our

external debt position, it is also important to note that

all the debt indicators remain well below their respective

thresholds according to the most recent Debt Sustainability

Analysis (DSA) conducted by the International Monetary Fund

(IMF).

Contrary to the ‘OPINIONS’ of the uninformed, that

government spending does not translate into economic growth

and development; the evidence of our economic and social

progress is beyond question. Moreso the information

required for any objective analysis is in the public domain

for all to examine.

In addition to the unprecedented the growth rates,

sustainable debt levels and price stability, our skillful

stewardship of the economy has produced numerous policy

dividends.

Mr Speaker, I am pleased to report to this honorable house

accomplishments in the areas of :

Poverty reduction

Extreme

Poverty

Extreme poverty which was 29 percent in

1992 was reduced to 18.6 percent in 2006

according to the Inter-American

Development Bank.

The International Monetary Fund also

confirmed a reduction in poverty over the

last decade.

Attainment of Millennium Development Goals

Millennium

Development

Goals

(MDGs)

Guyana has achieved the MDGs related to

nutrition and child health, eradicating

extreme poverty and hunger, and universal

primary education and is on course of

achieving the other MDGs.

Improvement in Human Development Index

Human

Development

Index

The human development index rose from

0.502 in 1990 to 0.635 in 2012

Improvement in Guyana ranking in Human Development

Report

Improvement

in Guyana

ranking in

Human

Development

Guyana is now categorized as medium human

development country having moved two

points in the 2012 Human Development

report, ranking 118 out of 187 countries

Report

Significant social development as reflected in the

improvement in key social indicators –

infant mortality and under 5 mortality rate improved

2013 1992

Infant mortality rate (per 1,000 live

births)

12.9 42.9

2013 2004

Under 5 mortality rate (per 1,000 live

births)

15.8 26

improvement in immunization rate

2013 1999

Severely malnourished 0.2 0.5

Moderately malnourished 2.0 12.9

1 year old immunized against

DPT/(Pentavalent) (%)

98.0 83

1 year old immunized against MMR,

Yellow Fever (%)

97.5 87

1 year old immunized against polio (%) 97.5 83

1 year old immunized against, TB, BCG

(%)

97.8 91

improvement in the number of physicians and nurses per

Ten Thousand Population

2013 1992

Number of physicians per Ten Thousand

Population

9.5 2.0

Number of nurses per Ten Thousand

Population

15.3 5.9

In addition, Per Capita GDP increased by 670 percent from

1992 to 2013.

2013 1992

Per capita GDP US$3,496.3 US$454

Mr. Speaker these statistics are included in Appendix 1 of

the Budget Speech.

The success of our programmes and policies is not only

confirmed by these statistics but is recognized in a bevy

of published peer-reviewed journal articles and other

technical studies on Guyana. Just to give a few examples.

In a study by Kari Grenade and Denny Lewis-Bynoe entitled

“Reflecting on Development Outcomes: A Comparative Analysis

of Barbados and Guyana” (2011) assessed the performance

of the Guyana economy after 2000. The authors concluded

that the growth rates in Guyana is catching up with

Barbados due in part to sound macro-economic management,

institutional strengthening and deeper social cohesion.

According to Grenade and Bynoe, the success of Guyana

provides good policy examples for other countries in the

Caribbean to replicate.

Kari Grenade and Sukrishnalall Pasha in their study

entitled “Accelerating Guyana’s Growth Momentum’, argued

that improved governance, sound macroeconomic management

and favourable terms of trade were the key propellers of

economic growth between 2006 and 2010.

Only last month, the CDP President lauded Guyana when

presenting the CDB Annual Report. The CDB president

remarked that Guyana is good fiscal example for countries

in the Caribbean to follow. He said the following:

“Guyana is a good example of a country

that has done some of the right

things...,. They have come a very, very

long distance in terms of their fiscal

situation. They have been responsible in

terms of addressing it”

He went on further to say that:

“Generally there is a lot of vibrancy in

the Guyanese economy. Just by casual

observation one can see that there is a

lot of construction that is taking place

in the country, I like to say that

whenever I go to Guyana you can almost

see the country changing in front of your

eyes, and so that is just a casual

indication of the extent to which

economic activity is vibrant and buoyant

in that country.”

Mr Speaker, to reference the 2013 Article IV Surveillance

Report by the International Monetary Fund

“During the last decade, Guyana’s strong

macroeconomic performance has contributed

to a reduction in public debt levels and

sustained poverty reduction. The economy

has experienced seven years of

uninterrupted growth averaging about 4

percent annually. The key pillars of the

macroeconomic resurgence have been

sustained reforms, in particular the

implementation of VAT, favorable

commodity prices, significant inflows of

Foreign Direct Investment (FDI) …’

Mr. Speaker, the conclusions of these studies are based on

rigorous scientific investigations and devoid of the bias

of those with narrow political agenda. Given the

overwhelming evidence of the development taking place in

Guyana I don’t believe we need any further academic

validation or debate about growth and development in

Guyana, as anyone with eyes or a modicum of objectivity

would readily agree that our country is transforming

rapidly and moving in the RIGHT DIRECTION. Equally

important is the fact that our development is attributable

to PRUDENT MACRO-ECONOMIC management.

Mr. Speaker in order to understand the magnitude of our

success, it is imperative that we compare the narrative of

economic development prior to 1992 with the narrative in

the reports highlighted earlier. Micheal DaCosta, for

instance, in his study entitled “Colonial Origins,

Institutions and Economic Performance in the Caribbean:

Guyana and Barbados” (2007) which compares the economic

performance of Guyana with Barbados said the following:

“… throughout the late-1970s and early-

1980s Guyana’s political climate was

marked by continued instability, the

absence of dialogue and consensus-

seeking, and a further weakening of key

institutions, such as the rule of law.

Production of all the major commodities

declined sharply; public utilities and

social services barely functioned; and

real wages fell sharply (by 40 percent

between 1976 and 1986). During the 1976–

88 period, real GDP per head fell by 31

percent, inflation soared eightfold,

foreign exchange reserves dwindled, and

government debt rose from 31 percent of

GDP to 475 percent. In 1984, real GDP

fell to its lowest level since 1955, and

the size of the informal economy was

estimated at 40 percent of the formal

economy. Indeed, for most of the 1980s

and the first half of the 1990s GDP per

capita in U.S. dollars was lower than in

sub-Saharan Africa. Toward the end of the

1980s, the country physical

infrastructure—including the critical

drainage and sea defense infrastructure—

deteriorated considerably, and indicators

of health and education, and overall

social conditions worsened. Among the

most visible and damaging effects of the

policies during this period were those

associated with the loss of human

resources and skills through migration.”

Armendariz et al. in their study entitlted “Identifying

Binding Constraints to Growth in Guyana”. said the

following:

“During 1970-78, the economy grew by an

average of just 1.4 percent, despite high

growth linked to high world prices of

sugar and bauxite in the early 1970s.

Guyana’s economy further plummeted in the

1980s, with growth declining at an

average annual rate of negative 2.5

percent between 1980-89. With diminished

capacity, a huge parallel economy,

staggering debt and aid suspension from

traditional donors, Guyana had very few

choices at the end of the 1980s. It

therefore needed to renew access to

international financial markets. The debt

crisis, weak macroeconomic fundamentals

and the decline in economic activity

forced a shift towards market-oriented

reforms in the government development

strategy.”

In his study entitled “The Poor and the Powerless; Economic

Policy and change in the Caribbean” (1988) the

Distinguished Professor C.Y. Thomas spoke about Guyana’s

economic collapse and attributed same to macroeonomic

mismanagment. In particular, Professor Thomas said the

following:

“… the poor economic performance and

subsequent economic collapse by the end

of the 1980s was due to a domestic

production crisis and declines in

productivity as a result of economic

mismanagement and not to falling prices,

shrinking export markets or a world

economic crisis”

The observation by Professor C.Y. Thomas was also confirmed

recently by Dhanraj R. Singh in his paper entitled “The

Political Economy of Growth: Why Guyana Fell Behind? A

Growth Analysis of Post-Independence” (2013). In this study

the author argued that under the PNC rule, between 1985 and

1992:

“… the economy continued to fold as poor

macroeconomic management and a soaring

external debt continued to impair growth.

By 1988, import cover was less than two

weeks, international reserves depleted

and there were little domestic or foreign

investments and the government controlled

over 80% of all imports and exports. Such

pernicious economic performance brought

significant increases in poverty,

widespread political instability,

increased unemployment, mass migration

and incessant deterioration in the

provision of public services.”

According to Dhanraj Singh (2013), investment also

contracted.

“… Private investment shrunk further by

45.5% and public investment by 23.8% in

1982. Manufacturing output slashed by 40%

and sugar by 30%. This had widespread and

devastating ripple effects across the

economy as both private and public

consumption fell dramatically.”

One of the most important findings of the Dhanraj Singh is

that the economic contraction experienced in Guyana is

significantly related to the programmes and policies

implemented by the PNC administration, . In contrast, the

study shows that there is always a significant positive

relationship between economic growth and a PPP/C’s

Government.

Mr Speaker, the studies mentioned provides insightful

coverage of the economy, the failure of the policies

pursued and the gross economic mismanagement of the PNC

administration.

This was the state of the Carl Greenidge managed economy.

No where in the history of a PPP led administration

associated with such decadence, despair and failure.

Mr. Speaker, apart from the fact that the economy is

performing better today than when we assumed office in

1992, the story of our development may be deduced from a

casual examination of the headlines emanating from the

media in the Caribbean.

At a time when the Guyanese economy is expanding, and the

PPP/C government is paying higher wages and building as

well as maintaining the country’s physical infrastructure

in a fiscally prudent and responsible manner, many

governments in the Caribbean are instituting wage freeze,

borrowing to pay wages to public servants, and cutting back

on spending on infrastructure, mention a few austerity

measures taken.

Bajans taken for a ride: The Minister of Finance of

Barbados admitted that Government is borrowing $14

million per month to pay 7,000 casual workers and it

is borrowing much more to pay many more permanent

civil servants on a monthly basis. (Source: Nation

News, February 6th, 2014)

Puerto Rico slides toward insolvency: Dark clouds are

hanging over Puerto Rico. Its projected 2013 deficit

follows a likely 2012 deficit and twelve preceding

deficits stretching back to 2000. The economy has not

been generating sufficient tax revenue to support the

services that the government has been providing to

citizens. The difference has been made up by borrowing

in the bond market and loans from the Puerto Rico

Government Development Bank. Now the bond market

gatekeepers, – credit ratings agencies – are waving

the red flag. Standard & Poor’s downgraded the

Commonwealth of Puerto Rico to BBB- (one tiny step

before junk status) and followed this downgrade with

one of the island’s Government Development Bank to

BBB-. This is ominous. The GDB is the heart of Puerto

Rico’s borrowing system. (Source: Reuters, March 15,

2013).

Saint Lucia PM calls for a reduction in government

spending: CASTRIES, St Lucia -- With the contraction

of the world economy, many countries have sought to

implement measures to curb expenditure for fear of

plummeting into financial crises. On the opening day

of the debate on the estimates of revenue and

expenditure for 2013/2014, Saint Lucia prime minister

and minister for finance, Dr Kenny Anthony, announced

an intention to reduce the country’s spending.

In acknowledging the need to restore the fiscal

position of the island to a viable and sustainable

state, Anthony presented to the House of Assembly, a

draft of the estimates of expenditure which is $134

million less than last year’s.

Last year’s approved estimates totalled $1.457

billion. However, this year, the draft estimates is

$1.327 billion. The total recurrent expenditure is

expected to decline by an estimated 1.6 percent lower

than the approved estimates for 2012/2013,

representing some $947.1 million.

In keeping with its belt-tightening measures, the

government intends to cut capital expenditure by more

than 20 percent.

“At 380.3 million dollars, the proposed capital

expenditure budget for 2013/2014 represents 114.6

million or 23.2 percent decrease compared to the

approved estimates for 2012/2013,” Anthony said.

The overall cuts in expenditure are more likely to be

felt mainly in respect of capital expenditure.

(Source: Caribbean News: April 27, 2013)

Wage freeze could go beyond 2017, says Roberts: HEAD

of the Hugh Lawson Shearer Trade Union Education

Institute, Danny Roberts has warned of government's

wage freeze going beyond 2016/17 or the possibility of

retrenchment of thousands of public servants if there

is failure to strengthen the country's external

competitiveness and generate higher levels of

productivity and real GDP growth.

Robert was speaking on the topic "Work Ethics, Wage

Freeze and the Employee" at a staff development

workshop at the Charlemont High School in St Catherine

on Friday.

(Jamaica Observer: March 10, 2014)

Grenada government unable to pay arrears to public

servants: The Grenada government says it will not be

able to pay as schedule the EC$12 million (one EC

dollar = US$0.37 cents) in retroactive payment to

public servants. A government statement said that

while the process of preparation for payment is almost

completed, the Keith Mitchell administration “is

mobilising external funding which has not yet

arrived”.

(Source: Guardian, March 1, 2014)

Sustainability of Wage Increase

Mr. Speaker, in Guyana our public

servants have been granted wage

increases, at least in line with the

inflation rate to sustain their

purchasing power.

While the Government would be happy

to provide higher increases, such

increases are unsustainable and may

only be allowed with adverse

consequence for inflation, fiscal

consolidation, exchange rate

stability.

'Build homes, create jobs': THIRTY thousand people in

the construction sector are currently jobless, Prime

Minister Kamla Persad-Bissessar has said. Persad-

Bissessar made the statements yesterday during a

presentation of keys ceremony held at the Housing

Development Corporation's (HDC) Port of Spain offices.

Housing -$4.4

billion

Construction

workers: 1,700

jobs

Construction jobs:

Engineers,

Architects,

Suveyors, Foremen,

Operators, Drivers,

Water – $2.5

billion

Construction

workers: 1,100

jobs Masons, Carpenters,

Plumbers,

Electricians,

Welders,

Fabricators,

Mechanics and

Servicemen, Clerks

of works,

Accountants, Data

Processing Clerks,

GIS Specialist and

AutoCAD Technician,

Security, Checkers,

Skilled and Semi-

skilled labourers.

"The Central Bank Governor is saying that the

Government needs to spend, the Government needs to

invest in infrastructure and as we do that we create

jobs, and as we create jobs that goes into the

multiplier effect and stimulates the economy," Persad-

Bissessar said.

"In the construction sector I am advised that 30,000

people are unemployed and we have so many houses to

build and we will build houses and we will provide

these jobs," she said.

(Source: Trinidad Express, May 4th, 2011)

24,700 LOSE JOBS: CLOSE to 25,000 jobs were lost in

2009 to 2010, pushing this country's unemployment rate

to the highest it has been in almost three years.

This information is contained in the Central Bank's

Monetary Policy Report dated October 2010 released

yesterday by the bank at a press conference at its

offices in Port of Spain. The report shows that the

economy continues to languish and that the Gross

Domestic Product (GDP) will not achieve the projected

growth of two per cent this year.

(Source: Trinidad Express, November 4th, 2010)

2014 Budget Initiative - $6 billion

Subsidy of $6 billion

GUYSUCO This subsidy is intended to sustain

over 18,000 jobs directly and

120,000 indirectly within the

agriculture sector.

Barbados’ job cuts politics: Based from a statement

released by the International Monetary Fund (IMF),

that Barbados’ wage bill for public sector workers is

currently “the highest” in our Caribbean region.

Further, together with interest payments on rising

debts, this wage bill, which cannot be sustained,

severely limits room for investment to boost economic

growth.

Consequently, some 3,000 government workers are

scheduled for retrenchment within the first quarter of

2014. Such very dread news, 12 days before Christmas,

would already have been before the Barbadian people as

a toxic source of spreading depression.

(Source: Trinidad Express, December 17, 2013).

Residents want jobs, infrastructure: RESIDENTS of the

Beetham Estate want three things—employment, proper

infrastructure and assistance to fix their homes.

These were the major complaints made by the residents

yesterday when Minister of Social Development, Dr

Glenn Ramadharsingh, and his ministerial team toured

the area during his "Direct Effect" walk.

(Source: Trinidad Express, July 27th, 2011).

2014 Budget Initiatives

Creating jobs

Marriott Using the IFC 3

jobs per room

ratio this project

will create over

591 direct jobs in

the hospitality

sector during the

operational phase.

The discretionary

spending outside

the hotel will

also create

indirect jobs.

Jobs within the

hospitality sector

Amelia

Falls Hydro

Project

Construction jobs:

Engineers,

Architects,

Suveyors, Foremen,

Operators, Drivers,

Masons, Carpenters,

Plumbers,

Electricians,

Welders,

Fabricators,

Mechanics and

Servicemen, Clerks

of works,

Accountants, Data

Processing Clerks,

GIS Specialist and

AutoCAD Technician,

Security, Checkers,

Skilled and Semi-

Specialty

Hospital

CJIA Construction

workers: 400

Long-term

employment: 100

Hospitality

Institute

Using the same IFC

ratio of 3 jobs

per room this

institute will

benefit over

10,500 hospitality

worker.

Housing Construction

workers: 1,700

jobs

Water Construction

workers: 1,100

jobs

skilled labourers.

Other jobs: A

variety of skills

will be required for

the jobs in the

manufacturing and

hospitality sectors,

including,

accounting, finance,

marketing all of

which are aligned to

the programme

offerings at the

University of

Guyana. Thus, these

projects will

benefit our

graduates.

Industrial

Estates

These projects

will create at

least 3,220 for

construction

workers

When the estates

become operational

over 4,025 in the

manufacturing

sector.

MSE

Projects

Using the ratio of

loans to jobs from

IPED where a loan

of $282,000 to

create one job the

allocation under

the MSED Project

and Rural

Development Fund

will create over

7,092 jobs in the

small business

sector

Mr. Speaker what is instructive to note is that while

Caribbean economies are struggling to preserve jobs,

attract investment, build and maintain infrastructure, our

economy has continued to perform admirably in these areas.

The main threat to our continued progress has been the

combined opposition is working to achieve the reverse. The

combined opposition is making a concerted effort to create

an environment of stagnation and suffering. One can only

conclude that Mr Greenidge and company feels at home in an

unsuccessful economy.

In their efforts since the 2011 elections, the combined

opposition has been:

- cutting the budgets with the intention of putting our

people out of work in the public sector and the sugar

industry;

- blocking transformation projects with the aim of

stymieing government’s effort to create jobs for

Guyanese; and

- blocking the passage of critical legislation with the

aim of making Guyana less friendly to foreign and

domestic investments.

Because of the actions of the combined opposition this is

how the headlines emanating from Guyana reads:

1. Budget cuts delay hinterland development (Kaieteur

News – 23 October 2013)

2. GINA begins “staff rotation” as budget cut bites

(http://newssourcegy.com/news/gina-begins-staff-

rotation-as-budget-cut-bites/)

3. New River Triangle Debacle…Muri Brasil pulls out of

PGGS (Kaieteur News – 5 January 2014)

4. Muri Brasil pull out…Opposition should stop playing

politics with projects geared towards economic

development – Dr.Luncheon (Kaieteur News – 9 January

2014)

5. Investors’ confidence in Guyana under political attack

– Luncheon warns: – cites Opposition dealings with

Muri Brasil and Amaila Falls projects (Guyana

Chronicle – 8 January 2014)

6. Opposition continues to hold critical socio-economic

projects to ransom (Guyana Chronicle – 19 July 2013)

7. Opposition cut to budgetary allocation for Specialty

Hospital… MIND BOGGLING – defeats any sense of logic

(Guyana Chrronicle – 24 April 2013)

Mr. Speaker it my hope that the combined opposition would

see the wisdom of supporting the 2014 Budget for the good

of our country, since our policies and programmes have

consistently produced positive policy dividends. This

year’s budget seeks to consolidate these gains by:

(i) facilitating structural production transformation;

(ii) consolidating the agriculture sector;

(iii) building our domestic private sector;

(iv) advancing the implementation of the Low-Carbon

Development Strategy;

(v) promoting socio-economic development through a

continuation of prudent macroeconomic policies;

(vi) promoting inclusive or balanced development through

initiatives targeting vulnerable groups (women,

youths, hinterland communities, senior citizens etc).

(vii) providing gainful employment for all our people

through the creation of an enabling environment for

investment (both domestic and foreign) as well as

direct investments through the Public Sector and

Public Private Partnerships (PPPs).

In particular, the menus of measures proposed in the 2014

Budget are ultimately aimed at:

sustaining the job creating capacity of the economy

for the benefit of our people

expanding our economic base,

accelerating economic growth,

promoting social development; and

maintaining fiscal sustainability.

Mr. Speaker, this is a PEOPLE FOCUSED BUDGET and it caters

for Guyanese from every strata of society, especially

vulnerable groups (our seniors, youths, women and poor

households).

Structural production transformation

Mr. Speaker in order for Guyana to develop more rapidly and

post higher quality economic growth, the structure of the

economy has to be transformed to facilitate the production

of goods and services which are high on the global demand

hierarchy and have high value-added potential. This point

was made in many academic studies, including “Sectoral

Production Interaction and Spillovers” in Guyana by S.

Pasha, Dhanraj Singh and Tarron Khemraj (2013).

Recognizing the importance of structural production

transformation, the Government has consistently promoted

policies and programmes aimed at structural transformation

in all its development strategies, including the recently

launched National Competitiveness Strategy and Low-Carbon

Development Strategy. Since the 2011 Budget, the

government has also provided fiscal support for numerous

catalytic projects that would serve to transform the

production structure of the economy. In the 2014 Budget,

the government proposes to continue with investment in

several catalytic projects, including the:

Amelia Fall Hydro Project (AFHP)

CJIA expansion, and

Specialty Hospital

Notwithstanding the overwhelming empirical justifications

for these projects; the government is yet to receive

support from the combined opposition. Without the combined

opposition’s support the advancement of these catalytic

projects will be difficult.

Mr. Speaker with the Amelia project our country would be

able to access cheap, clean and reliable energy that is

necessary for Agro-processing and other industrial and

value-added activities that would see the country move from

a primary commodity producer to producer of industrial

goods. This project, will also place us in a position to be

energy secure.

The Amelia Falls Hydro Project (AFHP) will provide the

country with a reliable source of clean renewable and

affordable energy. Specifically the project will:

Save consumes approximately US$3.5billion over 20

years through the reduction of tariff to residential,

commercial and industrial consumer of GPL;

Reduce the fuel import bill by approximately 20 to 25

percent and save the country over US$90 million on

imported fuel. This would reduce our exposure to the

vagaries of adverse price movements on the

international market;

It would add cumulatively 6 percentage points to real

GDP during the project construction phase;

lead to a reduction ranging between 20 to 40 percent

in the current cost of generation; and

allow for the generation of electricity using 100%

renewable source. This has the potential of earning

approximately US$10 million annually from the sale of

carbon credit.

Our competitiveness is also expected to improve with

the reduction in the cost of electricity as well as the

simultaneous improvement in the reliability of this

service, which has been identified as a binding

constraint to our development.

Meanwhile, the CJIA expansion, Mariott Project and

Specialty Hospital are also necessary investments if we are

to fully exploit the potential of high-end tourism

activities (such as Health Tourism, Eco-Tourism and Meeting

Incentives Conferencing and Exhibition (MICE) etc.) thereby

expanding our economic base.

Benefits of Marriott Project

The total wealth creation (or value-added) impact of

the project is estimated to be approximately $17.4

billion during the construction phase;

Serve as a benchmark for all local hotels encouraging

them to improve their quality and range of services

to meet international standards;

Encourage other reputable international branded hotel

to invest in Guyana

Boost the capacity of the local tourism sector to tap

into high-end business customers;

Promote Guyana as a “Meeting Incentives Conference

and Events or Exhibition (MICE) destination

Support efforts to develop tourism sector.

CJIA Expansion

The expansion will see a runway with the capacity of

accommodating wide-bodied aircraft.

Attract airlines to Guyana

Create the unique opportunity for Guyana to become

the hub to serve flight routes to South, Latin

America and Africa; market currently unexplored and

with significant potential

Mr. Speaker the budgetary allocation for these catalytic

projects will be buttressed with various initiatives in

this year’s Budget. The 2014 Budget, for instance, proposes

an investment of $200 million to complete the industrial

estates in Eccles, Lethem and Belvedere. This investment is

specifically intended to enhance the feasibility of

industrial activities in Guyana.

Proposed spending for Industrial Development $200 million

Output Impacts

BELVEDERE –

$10 M (on

security

Plots Supplied 21 – therefore 21

investors will benefit.

fence) will be

spent in 2014

to complete.

Finished:

roads, drains,

culverts,

water supply,

electricity

Let’s say that each investor will expend

approximately 18M to set up their

factory/plants – this means that 21*18

million = $378M will be injected in

economy of region 6

Demand for local and imported

construction materials – will result in

demand for labour

– 420 direct jobs (assuming minimum 20

persons) will be created to construct

these factories/plant

This estate in operation will create

approximately 525 direct jobs in the

Belevedere Community and by extension

region 6.

Assuming that these new jobs generate an

average income of $50,000 per month, it

will be seen that the income earning

capacity of the region will increase by

$26.2 million per month:

Further, this means that the earning

capacity of the region will increase by

$315255.6

LETHEM - $180M

will be spent

on

infrastructure

works on

Lethem Estate

- Access

roads

Note: the community will benefit from the

Access road and also approx.. 380

students will benefits directly from a

footpath which we will construct.

Plots to be supplied – 140

Let’s say that each investor will expend

approximately 24M to set up their

- Internal

Roads

- Drains

- Culverts

factory/plants – this means that 140*24M

= $3.3B will be injected in Lethem.

Demand for local and imported

construction materials – will result in

demand for labour

– 2,800 direct jobs will be created to

construct these factories/plant

This estate in operation will create

approximately 3,500 direct jobs.

Assuming that these new jobs generate an

average income of $50,000 per month, it

will be seen that the income earning

capacity of the region will increase by

$175M million per month:

Further, this means that the earning

capacity of Lethem and region 9 will

increase by $2.1B

In an effort to develop the tourism sector, the Government

proposes to invest US$4 million (or G$800 million) to

establish a Hospitality Institute. This investment will be

in addition to the Marriott Hotel and CJIA expansion.

Programme Output Impact

TOURISM DEVELOPMENT

Proposed spending

Hospitality

Institute

USD 4M/$800 M

This amount will

see the

establishment of

the Hospitality

Institute

Course includes:

1. Business Core

2. Hospitality

Management

3. Food and

beverage

Preparation

Etc.

Total direct

tourism and

hospitality

sector value

Impact on Economy

This will see a

direct investment

$800 M into the

economy where

numerous jobs will

be created for

construction

The establishment

of this institute

will definitely

expand the Human

Capital base of the

country

With a highly

skilled labour

force, productivity

will be at its

optimal and would

allow for efficient

and effective

utilization of

resource leading to

an increase in

production

- Demand for

teachers will

increase

Total direct

tourism and

hospitality sector

value is between

US$131,471,820 and

US$304,925,083 -

with a likely

estimate being

closer to the mean

estimate of

US$214,874,091 (or

8.3% of GDP). For

the total value to

be US$214,874,091,

the following would

have to be true:

1. There are a

total of

176,642

tourists in the

year.

2. Of this total,

149,616 of

these tourists

come to Guyana

for the

purposes of

visiting

family,

friends,

personal

business, or

one day trips.

3. These

‘visitors’

spend on

average 15 days

in Guyana.

4. These

‘visitors’

Arrivals

Airlift-

essential for

tourism

development

spend on

average US$60

per day.

5. Of the total,

8,832 of these

tourists come

to Guyana for

the purposes of

adventure or

nature tourism,

or scientific

research.

6. These

‘dedicated

tourists’ spend

on average 13

days in Guyana.

7. These

‘dedicated

tourists’ spend

on average

US$206 per day.

8. Of the total,

18,914 of these

tourists come

to Guyana for

the purposes of

business.

9. These ‘business

travellers’

spend an

average of 7

days in Guyana.

10. These

‘business

travellers’

spend an

Occupancy Rate

Tradeshow

average of

US$226 per day.

11. The tax

revenue rate

collected by

the Government

from all of the

above

expenditure is

15%.

Over the last 10

years, visitor

arrivals have been

increasing

significantly in

Guyana.

In 2012, there is a

recorded figure of

over 176,000

visitors compared

to 10 years ago

when it was merely

70,000 to 80,000.

In 2013 Arrivals

was 200235 and this

represent 11.6 %

increase. We are in

the top from the

Caribbean that

recorded double

digit growth

As January 2014

this year, the GTA

recorded a 6.35 per

cent increase in

arrivals compared

to the

corresponding

period last year.

CONVIASA

(Venezuela) and

COPA (Panama). COPA

– fly to 69

destinations and 30

countries.

Therefore our

network reach and

accessibility to

Guyana is about 1B

people. COPA

currently fly to

the following

destination :

1. Brazil

2. Argentina

3. Colombia

4. Ecuador

5. Chile

6. Peru

7. USA

8. Canada

9. Venezuela

10. Panama

Travel Span

commenced

operations in

December 2013. (USA

& Canada)

2013 – 76.2% with

months September

and December in the

high 80s %

New Tradeshows

Adventure

Travel Expo –

Washington DC

New York times

Travel Show –

high end market

reach in the

USA …where we

have the best

airlift

Guyana over the

years has continued

to participate at

European

tradeshows(ITB

Germany, WTM London

& BirdFair - which

attracts the

highest numbers of

nature, adventure

travellers.

in addition to the

existing shows,

Guyana will

participate at

tradeshows in the

USA which has great

airlift and the

Latin America which

will be served by

CONVIASA and COPA

Airlines. These new

tradeshows include:

1. Adventure

Travel Expo,

USA

2. New York Times

Travel show,

USA

3. Virtual space

(COTTM

tradeshow in

China)

4. Guyana Road

shows in:

a. Suriname

b. Barbados

c. Argentina

d. Brazil

e. Panama

Publication Reach

In 2013, Guyana was been

featured in regional and

international publications

such as :

Caribbean Beat

Zing Magazine

16 Birding Publications –

Cox and Kings

The Guardian- UK

The CTO- Caribbean

Destination Magazine.

Caribbean Beat – 500,000

Zing Magazine – 250,000

Birding Publication – 1.5M

The Guardian, UK – 1.027M

CTO Magazine- 850,000

BBC Wild Life magazine-

237,000

Fortune 500 Magazine; this

is a global leader in

business journalism with a

circulation of over 850,000

and a global readership of

nearly 5 million.

This is a global leader in

business journalism with a

circulation of over 850,000

and a global readership of

nearly 5 million.

The Report Company – China They did a Destination

feature on Guyana in

Chinese language for

distribution in China – the

target was Investors,

Businesses and Tourist – a

reach of approximately 100M

people

Films/Documentary

Gold Rush 4.22 M people viewed this

programme. In 2013

Discovery Channel concluded

filming an entire season

(10 episodes) of the

popular show “Gold Rush”.

This was voted the number

one most watched show in

America. In 2012, this show

was filmed in Guyana and

was a major success.

Investment – $2BGD

Blue Paw (Germany)

Documentaries

Source of Essequibo

river

Day of the Caiman

Eyes of the Harpy

eagle

Ananconda

Big 5

Reach approximately 40 M

viewers

Monster Fish Documentary -

by National Geographic

This in production – but it

is expected to have a reach

of approximately 5M

viewers world wide

Kids Series - by BBC This is been shown

currently in UK, and BBC

worldwide service reaching

approximately 20M viewers

The Hunt – By BBC This capture how the Harpy

eagle hunts – this was done

in September 2013 and its

due to be air worldwide in

June of this years and it

is expected to have a reach

of about more than 20M

viewers

CPL 36M people had the

opportunity to watch CPL

WHAT IS SAID BY PUBLICATIONS

National Geographic

Traveller Magazine

In 2014, Guyana has been

referred to as the best

kept secret of South

America, by the prestigious

National Geographic

Traveler Magazine, and is

also among the 20

destinations being touted

to visit in 2014.

The destination has been

featured in National

Geographic Traveler

Magazine - Best of the

World list, featuring 20

destinations to visit in

2014. “The list reflects

what’s authentic,

culturally rich,

sustainable and superlative

in the world of travel

today,”

BBC Guyana was endorsed by BBC

as ‘Five Destinations you

should know more about’ in

2014.

CRUISE TOURISM

Yacht Rally In 2013 over 50 yachts

visited Guyana and they

spend on average 21 days in

the Essequibo river.

Assuming that they spend

137 USD (IFC) per day –

this would translate to

34.1M (173*21*46).

This is an injection 34.1M

in the economy

In 2014 we are expecting

another rally of about 75

yachts to visit – assuming

that 160 person visits and

they spend 137USD per

days….this would translate

to 137*160* 21 days – 92M

G$

Cruise In 2013

In 2014 – March 23& 24,

2014. Mirnerva was here

for 2 days with 356

passengers and a crew of

160 persons.

Passengers went to

1. Kaieteur Falls (16)

2. Arrow Point (79)

3. City Tours (160)

4. Mangrove Heritage

Trails (50)

5. Shopping

Approximately 3.6M GD$ was

expended by passengers on

these tours

Additionally 3 more Cruise

Ships are expected this

year- it is expected that

some 850 passengers will

visit

Note

We have an investor who is

willing to invest in a

Marina in the Essequibo

river – when this comes in

being it would attract more

yachts, serve as a repair

and dry dock and storage

facility and also generate

jobs

INVESTMENT IN TOURISM

SECTOR

In 2013 total value of

investments in the Tourism

Sector was $53,905,900,000

this includes:

- 18 tourims projects

- Total jobs created 626

In 2014 total value of

investments in the Sector

is projected at

- $70 Billion

- 30 projects

- 300 jobs

4 new hotels in addition to

the Marriot Hotel

Park Vue – opened in

January – 32 rooms

Millennium Manor – 50

rooms (under

construction)

Aruwi Enterprise Inc –

60 rooms (under

construction)

Rupununi Eco Hotel –

60 rooms (under

construction)

These hotels will create

approximately

399 rooms *3jobs (IFC) =

1,197 director jobs

NEW INITIATIVES 2014 New Initiatives

1. Destination DVD (10

mins); vignette DVDs

showcasing different

aspects of Guyana’s

heritage and culture

2. Guyana Gold Festival

3. Drive Guyana, an

umbrella concept that

encompasses the North

and South Pakaraima

Safaris, and

expedition to the

Rodeo

4. Tourism Ambassador

Programme

5. Celebrity Hike – seek

participants from

Trinidad

6. Melting Pot, a three

day event to be

hosted at Stadium to

commemorate

Emancipation Day

7. Caribbean Rum and Food

Festival

8. Familiarisation tour

for Chinese to visit

Guyana

9. Direct airlift from UK

to Guyana (multi

destination packaging)

10. Essequibo Camping

and Fishing Getaway –

target is university

students, both UWI and

UG

11. Tourism

stakeholder retreat,

where members from the

private and public

sector will discuss

ways in which they can

collaborate and

partner for growth in

the industry

12. Yacht Rally that

will include yachts

from Trinidad and

Tobago, Antigua and

Suriname

13. Encourage travel

for FIFA – to work

with Fly Jamaica to

partner with Brazilian

Airlines to facilitate

air travel

14. Demerara River

Cruise

15. Fort Island Dinner

16. Increase visits to

Fort Island, target is

school children to

teach them the

importance of Guyana’s

Dutch heritage

17. Independence Day

brunch at the site of

the 1823 Monument

18. Light Show –

collaborate with Dave

Martins

19. MOUs with tourism

organisations

20. Cruise terminal

(feasibility study to

be completed)

Consolidation of the agriculture sector

Mr. Speaker notwithstanding the need to create and expand

non-traditional industries, we have to consolidate our

traditional sectors. In this regard, we will continue to

invest in the agriculture sector. This investment is

necessary as the agriculture sector employs 33 percent of

the labour force and accounts for 25 percent of Gross

Domestic Product (GDP) and 50 percent of total exports. The

agriculture sector plays a critical role in our socio-

economic development. It should be noted that without

growth in the agriculture sector, expansion in other

sectors will be severely curtailed or weakened. This is

clearly established in the study by (Include name of study

- S. Pasha, Tarron Khemraj and Dhanraj Singh mentioned

earlier. This study provides econometric evidence that

growth in the agriculture sector contributes positively to

growth in both the industrial and service sectors.

Mr. Speaker equally important is the undeniable fact that

the agriculture sector is important for ensuring the

country’s food and nutrition security. Given the growing

global demand for food and the fact that the country is

well endowed with fertile land and fresh water, the

agriculture sector is critical for our future economic and

social development.

It should therefore come as no surprise Mr. Speaker, that

the agriculture sector has always featured prominently in

all of the development strategies promulgated by the

government and this government has consistently made

significant investments in the sector. In this year’s

Budget the

RICE SECTOR will benefit from $500 million to improve

the sector’s resilience and competitiveness.

Non-agricultural sector will benefit from … million;

and

SUGAR industry will benefit from $6 billion

I will refrain from speaking at length or in detail on this

sectors as the Honourable Minister of Agriculture will do

so during these debates. However, I feel compelled to speak

on sugar.

Mr. Speaker, while there has been much debate over the

support granted to the sugar industry, I wish to state

categorically that the Government of Guyana has no apology

to make for its support to GUYSUCO. This corporation is too

important to be regarded as “Black hole” or the ‘problem of

a particular political’ party. In and out of Government,

the PPP has always stood resolutely with the INDUSTRY

because of the role it plays in the socio-economic

development.

Mr. Speaker, for this Government GUYSUCO is seen as a

corporation which directly support the livelihood of over

18,000 sugar workers and 120,000 persons indirectly.

Notwithstanding the difficulties confronted by the

industry, over the past four years, this industry

contributed approximately 4.1 percent to our Gross Domestic

Product (GDP). If this industry were to closed, the

economy could plunge by over 4 percentage points or lose

over $21 billion in income annually.

This industry also generates over US$100 million annually

in foreign currency (which is equivalent to G$20.6 billion

annually based on the prevailing exchange rate or 10.16

percent of the total export revenue). The export revenue

generated by GUYSUCO is not a trivial issue. In fact, Mr.

Speaker, GUYSUCO is one of the largest earners of foreign

currency in Guyana. If we allow the industry to COLLAPSE,

this will result in the loss of foreign currency thereby

making it difficult for us to purchase critical consumer

and industrial goods. It will also impact on our capacity

to honour our international debt obligations, deleterious

effects to our exchange rate.

Mr. Speaker the Government is not prepared to risk going

back to those days when the Honourable Carl Greenidge was

Finance Minister and we had limited access to foreign

currency. During those days, the shortage of foreign

currency had devastating effects on our capacity to acquire

even the most basic goods and created hardship for our

people.

With lower import earnings it is also important to note

that the Current Account Balance and Overall Balance along

with our Gross International Reserves will also

deteriorate.

Mr. Speaker the subsidy which most commentators are upset

about is a reflection of the sociopathic thinking of these

commentators as well as the misconception about the

beneficiaries of the subsidy. The $6 billion that is given

to GUYSUCO as subsidy is directed not at supporting

inefficiencies but preserving the jobs of the 18,000

persons that are directly employed in the sector. If we are

to look at this intervention from this perspective, it

would work out to a subsidy of $27,000 per month per

worker. This is almost equivalent to the electricity

subsidy given Lindeners which work to 23,000 per month for

each customer in Linden.

Any government with a modicum of empathy for the poor

working class people would therefore support the

intervention.

Mr. Speaker, we must be recall that the sugar industry was

not always in the financial position that it finds itself.

Under both PNC and PPP Government, the sugar industry has

provided over $34 billion in the form of sugar levy which

was used to subsidize other industries; such as bauxite.

Under the PNC $12 billion was collected and between 1992

and 1999 over $22 billion was collected by this government.

If this money taken out of the industry was retained and

used to modernize its operation the industry instead of

supporting other sectors, this industry would have been in

a far superior position today. In fact Mr. Speaker if one

were to compute the Future Value of the sugar levy, using a

rate of return of 4.00 per annum (which is equivalent to

the average inflation rate) over a the period: 2000 to

2013, these funds would have accrued to $61 billion.

As mentioned earlier, the industry is too important for the

economy. It is noteworthy, that industries which contribute

less to GDP in advanced economies have benefitted from

Government assistance. Only recently, the Auto industry in

the United States, for example, which merely accounts for

less than 4 percent of GDP has benefitted from significant

bailout during the global financial slowdown.

Building the domestic private sector

Most of the macroeconomic reforms pursued by the Government

since it was democratically through free and fair elections

in 1992, were aimed at making the private sector the

catalyst for economic growth. Since 1992 the government

successfully implemented an extensive range of reforms with

support from international financial institutions such as

the International Monetary Fund, World Bank and Inter-

American Development Bank. These reforms produced many

benefits including:

(i) reforms to the country’s tax system,

(ii) massive investment in the country’s human capital

through the social spending, e.g. health and

education

(iii) massive investment in the country’s physical

infrastructure,

(iv) greater social, economic and political stability

(v) stronger public institutions, and

(vi) reforms to the financial system which is responsible

for greater access to financial resources as

reflected by lower interest rates and increased

domestic credit to the private sector

(vii) Mr. Speaker, Budget 2014 makes numerous provisions

that are intended to create gainful employment for

all our people. This will be made possible with the

investments proposed in the Budget. Earlier, I

illustrated how investments in the social sector the

water and housing sectors alone, some … jobs will be

created.

Apart from maintaining sound macro-economic fundamentals,

stable prices and robust private sector credit, this year’s

budget will not introduce any new taxes on the corporate

sector. Budget 2014 also set aside funds to develop

critical infrastructure to support our local private sector

and provide additional allocations to stimulate Small and

Medium Scale Enterprise (SMEs).

The Government’s decision is driven by the empirical

evidence which suggest that Small and Micro Enterprises

(SMEs) contribute significantly to economic growth as well

as agents of change, innovation and pioneers for creating

new technologies.

In Guyana available estimates suggest that SMEs account for

40 percent of total employment and contributed

approximately 28 percent to Gross Domestic Product (GDP) in

1998. In spite of their importance to the country’s social

and economic development, SMEs have been confronted with

several binding constraints. The most important binding

constraints faced by SME are: (i) limited access to

finance, (ii) high cost of borrowing, and inadequate

advisory services as well as business training and

management skills.

In recognition of the important role of the small business

sector and the constraints faced by these businesses, the

Government of Guyana enacted the Small Business Act of 2004

thereby creating the legal and policy framework for

promoting the small businesses in Guyana. Specifically, the

Act provides for the establishment of support programs and

incentive regime for small businesses, and the creation of

a Small Business Bureau (SBB), Small Business Council (SBC)

and Small Business Development Fund (SBDF). In addition,

the Act guarantees a minimum of 20 percent of government

procurement to small businesses.

In 2013, the Government also launched the Micro and Small

Enterprises Development (MSED) project which will be

executed over the next four years. This project is designed

to assist small businesses in the low-carbon sector with

collateral guarantees to support loans not exceeding $30

million, interest subsidy, small grants of $300,000 and

business advisory services and training. Under the MSED

project, it is envisaged that 4,400 jobs will be created

through the support of SMEs in the low-carbon sector.

The Amerindian Development Fund and CARILED Programme were

also launched last year to support small businesses. Budget

2014 proposes a new initiative in the form of the Rural

Development Fund. Under this initiative $1 billion will be

set aside under a revolving fund arrangement to support

SMEs across Guyana.

RURAL

Development

Fund

Mr. Speaker, based on collected on IPED

every loan of $282,000 creates one job

in the Small Business Sector. If one

were to use this investment-to-job

ratio, the provision of $1 billion in

this year’s budget has the potential to

create approximately 3,546 jobs.

To illustrate what this project means

to the average man, let us use the

island of Leguan, with a population of

3,300 persons, as an example. Assuming

an average household size of 4 persons

per household, this means that if the

funds were directed at Leguan

approximately approximately 825

households on the island:

3,300 ÷ 4 = 825 households

Now if $100 million is invested in

Leguan it would mean that:

100,000,000 ÷ 825 = $121,212 will

be invested per household

OR $30,303 will be invested per

person

This means that for every 2.3

household, 1 job would be created:

282,000 ÷ 121,212 = 2.3 households

or 1 JOB

Further, this means that 355 jobs will

be created with the investment of $100

million:

825 ÷ 2.3 = 355

Assuming that these new jobs generate

an average income of $60,000 per month,

it will be seen that the income earning

capacity of the island will increase by

$21.3 million per month:

$60,000 x 355 = $21,300,000 per

month

Further, this means that the earning

capacity of the island will increase by

$255.6 million per annum:

$21,300,000 x 12 = $255,600,000 per

annum

Promote inclusive or balanced development through social

sector spending and initiatives that targets vulnerable

groups (women, youths, hinterland communities, senior

citizens etc)

Mr. Speaker, the 2014 Budget provide, like every budget

presented by the PPP Government is people focused. This is

evident from the significant allocations to the social

sector and initiative targeting vulnerable groups.

WATER SECTOR Proposed spending for water sector

In excess of $2.5 billion of which:

- G$1,135 million is allocated for Coastal

Programme reflecting a per capita

investment 9,000.

- G$627 million is allocated for the

Linden Programme reflecting a per capita

investment of $30,000.

- G$190 million is allocated for the

Hinterland Programme reflecting a per

capita of $31,000.

- G$600 million is allocated for the

Georgetown Sanitation Improvement

Programme reflecting a per capita

investment of $11,000

Output

The spending will see the

construction of 5 new wells;

construction of two (2) new water

Treatment Plants;

12,000 new service connections; and

upgrade of 6,000 existing connections.

IMPACT

Impact on economy:

The proposed spending will result in

Direct investment of $2.9 billion with

value added impact of $1.3 billion. The

total impact is estimated at $4.2 billion.

20,000 persons will benefit from new

service connections on the Coast, Linden

and Hinterland communities.

In excess of 180,000 persons will benefit

from improved water service and quality,

improvement of sewerage disposal

efficiency.

The investment will create over 1,100 jobs

Demand for local and imported construction

materials will also increase:

- Importation market for over 5,500 sacks

cement - resulting in the creation of

jobs in the packaging of the materials.

- Demand for 1,600 loads of sand –jobs

created and demand for local materials

- Demand for 3,470 m3 stones - jobs

created and demand for local materials

- Over 3,000 m timber required – Demand

for local construction materials

- Demand for over 22,000 lengths of pipes

- Increased importation of raw materials

for the manufacture of pipes.

- Manufacture or importation of nearly

2,200 pipe fittings- Increased

importation of raw materials for the

manufacture of pipes.

- Increase of treated water coverage from

49% presently to over 65%.

- Increase access to potable water in

Hinterland from 71% to 80 % and at least

25% cost recovery.

HOUSING SECTOR OUTPUT

- 5,900 house lots to be distributed

- Upgrade of 45 km of existing road in 36

villages such as Sophia, Prosperity (aka

Barnwell), Diamond, Enmore, Eccles

North, Eccles South, Grove, Tuschen,

Zeelught, Parfait Harmonie, Vryheids

Lust, Foulis etc.

- Construction of 176 Core houses @1.8

million each

- Construction of 100 single flat houses

@$3.7 million each

- 50 house lots for nurses, police and

teachers

- Distribution of 134 low-income families

on the Coast will benefit from a subsidy

of $200,000per family.

- Distribution of 54 subsidies for

Hinterland families ($54 million or $1

million each). This will create over 200

jobs in Regions 1 and 9.

- 71 low-income families will benefit from

improved sanitation in Sophia and La

Parfaite Harmonie

IMPACT

Impact on economy:

- The proposed spending will result in

direct investment in economy of $4.4

billion with value-added impact of $1.98

billion. The total impact of the

spending approximates $6.38 billion.

- It will also create direct employment

for more than 1,700 persons with various

skills, including: Engineers,

Architects, Suveyors, Foremen,

Operators, Drivers, Masons, Carpenters,

Plumbers, Electricians, Welders,

Fabricators, Mechanics and Servicemen,

Clerks of works, Accountants, Data

Processing Clerks, GIS Specialist and

AutoCAD Technician, Security, Checkers,

Skilled and Semi-skilled labourers.

- Over 30,000 existing households will

benefit from improved roads in 36

communities across Guyana.

- Over 134 Coastal low-income household

(or 536 persons) will benefit from

subsidy.

- Over 54 low-income households will

benefit from the Hinterland Home

Improvement Subsidy. This investment

will also create 200 jobs in Regions 1

and 9.

- Demand for 40,000 truckloads of

construction of material: White sand,

loam, chrusher run, laterite, asphalt,

aggregates, cement, timber, steel, zinc,

hollow block etc.

Old Age Pension In this year’s Budget Old Age Pensioners

are promised yet another increase. The new

pension promised is 13,125; almost four

times more than what it was in 2006.

Unlike in the past, when persons were

required to pass a MEANS TEST to determine

eligibility, this is no longer the case.

Every single Guyanese at age 65 and above

is entitled to this pension.

It must be noted Mr. Speaker that old wage

pension is NOT intended to be a salary. It

is a non-contributory pension and serves

as top-up on other pensions and benefits

our senior citizens enjoy locally. It is

therefore mischievous for the opposition

members to present the ‘Old Age pension’

as the only source of income given to our

senior citizens.

EXAMPLE:

Old Age pension - $13,125

NIS Pension – $17,500 (minimum)

Total - $30,625

Electricity subsidy - $2,500.

Water subsidy - $1,666.67

The total benefit for someone who benefit

from both NIS and Old Age pension would

amount to $34,791 which is $208 shy of the

minimum wage.

Mr. Speaker I dare say that a mere …

percent of eligible pensioners receive the

minimum pension. It therefore means that

more than … percent earns in excess of the

minimum wage.

Youths/Children Mr. Speaker, Budget 2014 introduces a new

measure, the CASH GRANT to improve

enrollment and attendance at school,

inclusive of nursery, primary and

secondary.

The Cash Grant of $10,000 will benefit

approximately 188,406 families. This

translates into an increase of more than

G$1.9 billion in disposable income.

This intervention will supplement other

interventions such as the School Feeding

Programme and School Uniform Programme.

To date a total of 94 out of the 138

primary schools in the hinterland are

involved in this programme. This

represents approximately 16,000 of 19,000

(84%) of the children being targeted. This

works out to approximately $2.8 million

per day to provide a meal per each child

enrolled and present at school. This

includes children in the primary grades,

those in the nursery class and those in

the secondary classes of primary top

schools.

Region 1 – 32 schools

Region 7 – 24 schools

Region 8 – 17 schools

Region 9 – 21 schools

Total – 94 schools

School Uniform Programme - $1,500 per

annum and will benefit approximately …

families. This would translate into … in

additional disposable income.

Given the high propensity of poor families

to spend, this would translate into higher

economic growth. The programme also

generates other benefits. A recent world

bank reports show that the school feeding

programme impact positively on attendance.

Hinterland

projects

The 2014 Budget propose numerous

initiatives for hinterland communities.

Among these include:

Amerindian Development Fund – US$6 million

(G$1.2 billion)

Land Demarcation -

Rural Development – US$5 million (G$1

billion)

Hinterland Road – G$1 billion

Maintaining airstrip - $231 million

Hinterland Water Project – G$160 million

Core Homes -

54 Hinterland subsidy @ G$1 million each -

$54 million to benefit 1248

Hinterland scholarship scheme – G$74.6

million

Concluding Remarks

Mr Speaker, the PPPC administration has sought over the

years to restore the dignity of Guyanese. Dignity which was

lost during the period of PNC/APNU leadership, a period

when our economy and the spirit of our people was broken.

The 2014 budget represents another prudent fiscal

presentation aimed at sustaining and expanding the economic

opportunities of our people.

The 2014 budget represents another effort by the PPPC

administration to improve the social performance of our

society, to continue the process of building a productive

and prosperous nation for all Guyanese.

The 2014 budget is fiscal plan with measures catering to

all Guyanese, measures to restore our dream that Guyana can

and will be a place of prosperity and success.

Mr speaker it the hope of the PPPC that our colleagues will

see the rationale, purpose and objective of budget 2014 and

lend their support.

Our purpose, is the purpose of all, to improve our nations

well being and restore prosperity to Guyana.

Thank you