Private Sector wants stimulus package to kick-start economic growth
… says some sectors facing trouble
The coalition A Partnership for National Unity/Alliance For Change (APNU/AFC) Government cannot continue with its ‘hodge-podge’ approach to managing the economy; it must present a stimulus for growth in the declining sectors of the economy, without abandoning traditional pillars of economic growth, since the oil industry is still a developing one.
The frank views were articulated by President of the Georgetown Chambers of Commerce and Industry (GCCI), Deodat Indar, this past week during an interview with members of the local media corps, where he called for a stimulus programme to be introduced by the sitting Government in order to kick-start growth in Guyana’s tradition industries.
Indar was at the time giving the Private Sector umbrella body’s views on the troubling figures released by Finance Minister Winston Jordan when he recently released the mid-year report on the national spending expenditure, savings and earnings.
“We can’t have a ‘hodge-podge’ thing… We need something proper, something broad to look at all segments facing some level of downturn and to make sure we put stimulus in place to kick-start some of those things,” according to Indar.
The GCCI President told journalists gathered at the Georgetown Marriott for an Audit Office Capacity Building forum that “based on last numbers coming out of Central Bank, there are some sectors facing trouble… Our members are complaining.”
He pointed to the mid-year report for 2017 and observed that while there was some good news for smaller sectors such as construction, other crops, and transportation, the traditional pillars of the economy in addition to other major contributors have been on a steady decline.
He noted that in addition to the negative performances returned by sugar, timber and other sectors’ growth in some areas are being somewhat misconstrued.
According to the GCCI President, while growth is reflected in the manufacturing sector, this is only due to the performance of one commodity under that economic rubric, namely rice.
Indar told journalists that were the rice figures to be removed from the equation, then a non-rice manufacturing sector would reveal that the industry is in fact facing troubling times, since it would then reflect a negative growth.
According to Indar, the current state of affairs will inevitably lead to greater job losses which would in turn lead to reduced consumption.
The GCCI President pointed out that reduced consumption by a populace stricken by reduced or lost income will lead to reduced revenue companies and this would mean reduced taxes.
He warned that in such a situation where the tax base is reduced, it will ultimately lead to a budget deficit which means Government will either have to increase taxes or “have to borrow money to run the country.”
The GCCI President opined this to be an undesirable situation adding “we want to see the real sector kick-start.”
He noted that oil and gas sector is still in its developmental stage and the country already has well established sectors of the economy already.
Indar was firm in his conviction that these tradition sectors require urgent assistance on the part of the Administration in order to maintain economic gains until that time comes when there can be an influx of additional revenues from the oil and gas sector.
“We have some traditional sectors and we should not abandon them,” he cautioned. Meanwhile, as it relates to the imminent presentation of the budget for the coming year, Indar told journalists the grouping has not yet met with the Minister but do look forward to an invitation to be consulted.
The mid-year report – which was released by the Minister before the National Assembly – went into recess had also highlighted Government’s continued failure at using its annual budget for the provision of services to the nation, this, even as the country’s export earnings continue to decline and gold joining the list of commodities on the decline.
In that report the Minister has also had to revise his overall projection for national growth downwards again.
Of note in the report is that while many of the traditional sectors, such as sugar and forestry, continue to perform poorly, the gold sector which has been credited with keeping the economy buoyant in recent years, has now also begun to decline in terms of production and earnings from sales on the international markets.