Budget 2018 has failed to address crumbling economy – Ali

As the dust clears from Budget 2018, the parliamentary Opposition has expressed criticism of the budget’s paucity of measures for social welfare and the economy. In particular, the absences of these measures are being described as a detour from the good life.

Opposition Member of Parliament Irfaan Ali, in an analysis of the budget, observed that it offers no opportunity for any form of socio-economic development. In addition, he said the fiscal plan does not address the fundamental issues of wealth generation and improved standard of living.
He said that as a result of the budget, Guyana runs the risk of socioeconomic hardship proliferating in the coming year. This, he noted, includes another year of high food prices and, increased educational cost, placing the vulnerable such as single parents in harm’s way.
Also at risk, he said, are shop owners and manufacturers as they will have to deal with high fixed cost and low resources; while farmers who have had to contend with low yields and reduced market share are offered no respite.

Sector performance
According to Ali, the key traditional sectors continue to show great signs of distress. He pointed out that in the sugar industry; production is expected to decline by $3.3 billion to $8.9 billion by the end of 2017. This, he noted, is down from $10.8 billion in 2016 and $13.6 billion in 2015.
“In the rice sector, even though positive growth was recorded in 2016, the end of year projection for 2017 is less when compared to 2015 by $2 billion. Another crumbling sector is forestry. By the end of 2017, the sector is expected to contract by $3.1 billion to $6.4 billion when compared to 2015.”
“And similarly, in the bauxite industry, output in 2017 is expected to decrease by $1.1 billion to $4.9 billion when compared to 2015. To have an idea of the bauxite has downsized, when compared to 2014 and 2013, the industry has contracted by more than $800 million and, $1.3 billion, respectively.”
He noted that overall, the agriculture, fishing and forestry industry is expected to contract by $7.5 billion to $67.2 billion by the end of 2017 when compared to 2015. “How does this Government expect to take the people to the good life when key sectors that directly employ over 75 per cent of our labour force are expected to contract by 11.1 per cent this year? The journey to the good life has taken a detour towards dystopia,” Ali said.
The Finance Ministry’s half year report had showed contractions in certain sectors, when compared to the corresponding period in 2016. The declining sectors had included sugar, livestock, forestry, mining and quarrying and even the bauxite industry. It showed that sugar production was recorded at 49,606 tonnes at the half year and when compared to 56,645 tonnes during the first half of 2016, represented a decline of 12.4 per cent. The livestock industry also contracted by 10.9 per cent in the first half of 2017, due to heavy rainfall severely affecting production, especially in the second quarter.
The forestry industry also showed an 18.2 per cent contraction in the first six months of 2017, compared to the same period in 2016. Declining production within the forestry industry was due to structural changes in the industry. The mining and quarrying sectors contracted by 4.0 per cent during the first half of 2017. Gold production fell by 1.7 per cent to 317,096 ounces, in the first half of 2017, compared to the same period in 2016. Also, it showed the bauxite industry declined by 11.5 per cent, as a result of reduced production of higher valued grades. This was due to poor weather combined with mechanical issues at one of the mines. However, production of metal grade bauxite (MAZ) increased by 97,016 tonnes or 21.3 per cent, the report had stated.