Govt policies contributed to decline in production – Ali

Report on forestry

A recent report originating from the Economic Policy Analysis Unit (EPAU) of the Ministry of Finance has painted a bleak picture of the forestry sector, and Opposition Member of Parliament Irfaan Ali strongly believes that Government policy has largely contributed to this development.

One reason cited by the EPAU report for the forestry sector’s decline is “the Government reorganising the sector in pursuit of better forestry management and greater value-added.” Another reason has been identified as “the downsizing of Barama Company Limited”. But putting the situation in perspective, Ali has said the new taxes and overall bureaucracy implemented by the Government have contributed to undermining the productive sector.
He said the effects are thus being seen by the report on the forestry sector, which produced 427,351 cubic metres of logs in 2015, but has dramatically plummeted to producing 327,781 cubic metres in 2016.

“We spoke in the budget (debates) about policies pursued by this Government that are inhibitive to growth, inhibitive to development, and (which) will more or less cripple the productive sector,” Ali declared. “If you look at all the new taxes, fees, licences and the new bureaucracy, it is all (capable of) stymieing growth and development.”
Ali added, “You will not have an improvement in the productive sector if you continue to have high energy and operating costs.”
According to the former Minister of Housing, the policies have drained the incentive for companies and individuals to work in the sector.
Referring to the removal of concessions in regard to Value Added Tax (VAT) on heavy equipment as one example, Ali said these policies would not only cripple the sector, but reduce its competitiveness.
“It is time the Government understands the seriousness of the economic situation,” the People’s Progressive Party (PPP) frontbencher declared.

Forestry production for January 2017 amounted to 17,174 cubic metres, compared with 25,733 cubic metres in January 2016. Lower production is expected from this industry as Government continues its reorganisation.
Exports
The report revealed that domestic exports increased in January 2017 by US$15.5 million to US$95.7 million, constituting a 19.3 percent increase compared to January 2016. Total domestic exports in January 2016 were US$80.3 million.
In January 2017, bauxite and timber had decreases of 27.8 percent and 35.9 percent respectively relative to January 2016. Bauxite exports decreased by US$3 million to US$7.9 million, whereas timber exports decreased by US$0.9 million to US$ 1.6 million.
According to the report, global prices for Guyana’s major traded commodities saw modest increases in January. Compared to January 2016, prices rose for all the commodities except logs, which had a decline of 2.3 percent.
The local Forestry Sector has been in decline in terms of production and exports of forest produce as far back as 2015. A draft annual report on the sector for that year had stated that there were respective declines of 14.5 per cent and 15.8 per cent in production and exports for the sector in 2015, compared to the previous year.
This report, coming from the Ministry of Natural Resources, has stated that the decline is directly related to depressed markets locally and internationally.