Guyana economy records 5% growth – PPP

December 18, 2013 | By | Filed Under News 

- worry continues over GuySuco

The ruling party yesterday announced close to five percent growth in the economy, despite a “hostile Parliamentary Oppostion”.
The People’s Progressive Party (PPP), in lauding the current administration’s “enormous strides”, said that the growth would have come despite a harsh global environment and a less than supportive domestic environment.
It was also noted as significant that other economies in the region are reeling under the impact of a downturn which resulted from a global economic and financial crisis.

Guyana’s economy is set to record some five percent growth, with rice and gold performance being the high points.

Guyana’s economy is set to record some five percent growth, with rice and gold performance being the high points.

“What is even more laudable is the fact that the economy performed creditably despite a hostile parliamentary opposition which had been doing and continues to do everything possible to frustrate and destabilize the government’s development agenda by virtue of its one seat majority.”
According to the ruling party, one indicator of a country’s economic health is the buoyancy of the banking and business sectors, both of which have shown impressive growth and expansion. “Foreign direct investments in the economy as well as local investment have increased significantly over the past years which are indicative of growing confidence in the economy.”
Another strong indicator of growth would be the fact that a growing number of Guyanese people are now new homeowners, have cars and other consumer items.
And despite the inflation, public servants have benefited from salary increases on an annual basis “which are larger than the rate of inflation resulting in a bigger and bigger basket of goods and services.”
The party pointed out that while Guyana is looking good; sister Caricom nation Barbados has announced plans to lay off 3,000 public servants.
“Our economy is growing, old age pension has increased, subsidies for water and electricity are given to pensioners, free school uniforms for children and increase in public assistance, while at the same time the Opposition is using their one seat majority to cut funding for these programmes.”
It was emphasised that another significant achievement for the country has been a marked increase in the productive capacity of the economy with rice reaching record levels, passing the 500,000 tonnes mark for the year. The mining sector has also performed well overtaking sugar as the largest foreign exchange earner.

 

 

excerpts from knews

 

 

 

Original Post

“Our economy is growing, old age pension has increased, subsidies for water and electricity are given to pensioners, free school uniforms for children and increase in public assistance, while at the same time the Opposition is using their one seat majority to cut funding for these programmes.”
It was emphasised that another significant achievement for the country has been a marked increase in the productive capacity of the economy with rice reaching record levels, passing the 500,000 tonnes mark for the year. The mining sector has also performed well overtaking sugar as the largest foreign exchange earner.

The Private Sector and National Unity

 

Posted By Tarron Khemraj On December 18, 2013 @ 5:02 am In Daily,Features | 

 

Introduction

Many tend to believe, including yours truly, that if we can just chart a new constitution to promote some form of power sharing, establish the Public Procurement Commission, re-establish the Ombudsman, and similar good institutions the country could be on the path of economic certainty and national unity. However, we often tend to ignore the private sector’s performance as one of the key links in the chain of national unity. It is much more difficult to share and craft good laws if the economy is not growing; indeed, it is hard to share a stagnant pie or a shrinking roti among growing family members increasing in numbers. Bad economic outcomes and skewed income distribution strain social relations and increase the likelihood of conflict.

Moreover, public sector workers will be able to experience better salary growth if the private sector is productive and growing. The success of the entire country depends on the success of private businesses. In turn, private businesses have a social responsibility and not just one of maximizing profits as the American-British corporate governance framework dictates. The private sector can play a role in democratic consolidation, instead of being an instrument of the elected oligarchs.

 

A common feature of the Jagdeo Administration was the creation of a subservient private sector.  The PPP under Jagdeo set out to engineer the “newly emerging private sector” (NEPS), some of whose members today appear to have coalesced under the umbrella of the Private Sector Commission (PSC) making this body very partisan . We should note, however, that the PSC is not the private sector. Those in the NEPS are favoured by the state and receive special concessions and privileges. The political elites, in turn, receive side payments or off-the-book payments (or rents to use the economist’s term).  This does not augur well for national unity or long-term economic growth. Stifling non-conformist businesses implies productivity is not as high as it could be or some innovations are being thrown out the door.

 

Constraints facing private businesses

Private businesses already face numerous constraints. The political constraints merely increase the cost of doing business in Guyana, thus causing the private investments to stagnate (see chart below). In spite of the favours the NEPS receive, the World Bank ranks Guyana at 115 in cost of doing business out of a total of 189 economies for 2013. Some of the factors the World Bank measures when calculating the cost of doing business index are: (i) ease of obtaining construction permits; (ii) reliability of electricity; (iii) ease of getting credit; (iv) investor protection; (v) tax rates; (vi) ability to trade across borders; (vii) contract enforcement; and other factors.

 

Some might be tempted to conclude that the proposed Amaila project would have solved the problem of unreliable and high price electricity. This was far from certain, however. For starters the hydro volatility – fluctuations in the amount of electricity generated by the plant owing to changes in water flows – implies that GPL would still have to run diesel engines during the dry season. Therefore, Amaila would not have taken Guyana completely off of fossil fuel as some have argued. Second, serving as the intermediary between Sithe and the consumers, GPL would have had to spend millions of US$ to get its act together to pass on the fairly low wholesale electricity price to consumers. The feasibility study done by the Argentine consultancy also did not factor into the final price of electricity the need to continue running engines using bunker fuel.

 

Numerous other constraints are faced by private businesses; for example limited pool of human capital, lack of physical security, high cost of finance, credit rationing to new and non-traditional businesses, poor infrastructure like the lack of a deep water harbour, poor sequencing of key infrastructure (why a new airport terminal before a deep water harbour?), and others. Perhaps the greatest constraint private businesses face is the strategy of the political elites that involves controlling the business space. Private businesses seen as unsympathetic to the government are penalized; even the people’s tax monies would be used against the business to create unnecessary competition in an already small marketplace. For example, the people’s tax monies are used to set up the Marriott to compete with the Pegasus.

 

Stagnation of private investment

In a previous column – “Slow fiah, mo fiah and the Guyanese growth stagnation” (Aug 12, 2009) – I observed the private investment rate in Guyana. In that column we saw that the ratio of private investments to GDP declined almost monotonically from 1992 to 2008; thus the argument that the Hoyte protests scared away private investments is not supported by the evidence. Indeed, the data suggest that the rate of private investment relative to GDP started to decline since 1993 after reaching a peak in 1992. My thesis has always been that the decline of the private investment rate has to do with the barriers to entry the oligarchy erects as they seek to dominate the business space.

 

I will redo the chart in this column using data from 2006 to 2012. The reason for this is because the statistical authorities in Guyana rebased the GDP statistics from 2006 to capture new industries and changing structure of the economy. The new data set ought to be able to capture a more diverse structure of private investments.   Before we continue, a digression relating to the rebasing of GDP is in order. Guyana’s per capita GDP is said to be around US$3000. This is mainly due to the rebasing that brought in previously ignored production activities into the official statistics. The compound and arithmetic rate of growth from 1992 to 2012 do not justify a per capita GDP of around US$3000.

 

Figure 1 updates my earlier chart from the “Slow fiah, mo fiah…” column using data from the 2012 Bank of Guyana Annual Report. The private investment rate is shown by the bar chart, while government investment rate is given by the line chart. It is clear that since 2006, after GDP was rebased, there is no clear trend in private investment, which tends to fluctuate around an average of 15%. In a sense, one can argue that private investments have stagnated around 15% of GDP.

 

20131218taron table

A percentage of about 25% to GDP is necessary if growth is to speed up to about 7% annually. Not all private investments are made equally, however. The government might be tempted to use the easy way out by bringing in foreign investors to operate mainly in resource extraction industries, which often result in volatile growth mainly because commodity prices are determined in flexible price auction markets. Production activities based on natural resource extraction also tends to be susceptible to resource curse such as smuggling and side payments. It is not that Guyana should not exploit its natural resources. Indeed, such exploitation should be concomitant with a wider system of diversification focusing on tradable and non-tradable value added industries.

 

Government investments have fluctuated around an average of 14%. Government investments can be done much more smartly focusing on creating a tertiary education hub in Guyana (targeting Latin America and Asian students) and medical tourism as they are trying to accomplish with the specialty hospital. Investing in a Marriott is a complete waste of investment funds that could be better deployed by the private sector.

 

Comments: tkhemraj@ncf.edu

         

again someone is fooling the PPP/C heads and die hard have problems with there mathematics calculations. Corruption is sky rocketing, steadily decrease in sugar, timber, bauxite and rice cannot meet its target, selling out the country for next to nothing and don't care a dam about national security and pride more so being blacklisted. I believe in whoever did that calculation should be down right ashamed of them self to turn a -5% to a +5%. If with these above mentioned consideration and you still get a +5% then its either you base your calculation on the money you people circulate among yourself and all the secret deals with massive kick backs or you just laundering money for the drugs barons - reason why you so foolish to not put your house right but you want to pain your house to make it look bright from the outside (being blacklisted). I mean from the pass 1st decade of the 21 century you still cannot provide a reliable source of electricity from since independence, its a land of many waters but still you have people fetching it, proverty sky rocketing, your city flooded with garbage, broken NIS, list too long to mention and you still have the audacity to record growth. Go fool your family not the general public

Originally Posted by Mitwah:
         

again someone is fooling the PPP/C heads and die hard have problems with there mathematics calculations. Corruption is sky rocketing, steadily decrease in sugar, timber, bauxite and rice cannot meet its target, selling out the country for next to nothing and don't care a dam about national security and pride more so being blacklisted. I believe in whoever did that calculation should be down right ashamed of them self to turn a -5% to a +5%. If with these above mentioned consideration and you still get a +5% then its either you base your calculation on the money you people circulate among yourself and all the secret deals with massive kick backs or you just laundering money for the drugs barons - reason why you so foolish to not put your house right but you want to pain your house to make it look bright from the outside (being blacklisted). I mean from the pass 1st decade of the 21 century you still cannot provide a reliable source of electricity from since independence, its a land of many waters but still you have people fetching it, proverty sky rocketing, your city flooded with garbage, broken NIS, list too long to mention and you still have the audacity to record growth. Go fool your family not the general public

Everything broken yet they talking about growth. They giving the people fake numbers. Ask Rev and Yuji of Pradoville.

Assuming the 5% growth is accurate, it would have been appropriate for Finance Minister Ashni Singh or President Ramotar to make the announcement.

This is a national achievement; all Guyanese of all political parties contributed to the growth.

When the PPP/C makes the announcement, it is in effect saying only PPP people grew the economy.

Note what the PPP/C says about opposition parties while making the announcement.

Congratulations to the people of Guyana.

What will interest me is what the GDP growth would be without gold.  The PPP didn't put gold in Guyana and they clearly aren't responsible for the high prices.   Sugar production is now back to the levels of the Hoyte era.

 

The PPP can take credit for rice.   But what else. Not gold certainly, and most FDI into Guyana is natural resource based and even DRCongo is getting this.

Originally Posted by Gilbakka:

Assuming the 5% growth is accurate, it would have been appropriate for Finance Minister Ashni Singh or President Ramotar to make the announcement.

This is a national achievement; all Guyanese of all political parties contributed to the growth.

When the PPP/C makes the announcement, it is in effect saying only PPP people grew the economy.

Note what the PPP/C says about opposition parties while making the announcement.

Congratulations to the people of Guyana.

The growth has been mainly in the drug export sector, which is heavily connected to the PPP. So it is appropriate that the PPP takes credit for the increase in drugs export.

Originally Posted by Mr.T:
Originally Posted by Gilbakka:

Assuming the 5% growth is accurate, it would have been appropriate for Finance Minister Ashni Singh or President Ramotar to make the announcement.

This is a national achievement; all Guyanese of all political parties contributed to the growth.

When the PPP/C makes the announcement, it is in effect saying only PPP people grew the economy.

Note what the PPP/C says about opposition parties while making the announcement.

Congratulations to the people of Guyana.

The growth has been mainly in the drug export sector, which is heavily connected to the PPP. So it is appropriate that the PPP takes credit for the increase in drugs export.

Well people like you DEMAND the product so we have to supply.

Another year of impressive economic growth

Our economy has once again recorded another year of impressive growth of 5% amidst a harsh external economic and financial environment. This is certainly due to the creation of conditions that are favourable for investments and sound macroeconomic stewardship, because economic growth has been sustained for several years now in difficult and challenging conditions. And, perhaps, our economic growth would have been appreciably higher had it not been for the decline in sugar production in recent years.

However, all other sectors have been showing robust growth in rice, forestry, mining and tourism, among others, and Foreign Direct Investments have also been increasing, despite strenuous efforts by some to block and discourage such investments. With regards to the latter, the latest attempt has been frenetic efforts to stop the Muri/Brasil Permission for Geological and Geographic Survey (PGGS), and of course, earlier, the Amaila Falls hydroproject, the Specialty Hospital and the CJIA expansion and modernisation project.
But despite the best efforts by those who are opposed to development, the reality is that rice production has been record breaking in recent years, with this year’s being over 532,000 tonnes-the highest ever in our history; gold production has seen the highest declaration-over 458,000 ounces and we are seeing increasing numbers of visitors in recent years.
Nevertheless, the “prophets of doom” among us do not see anything positive happening in this country and continue to spread their maddening propaganda.
The International Monetary Fund (IMF) says, despite a deteriorating external environment, including the deepening Euro-zone crisis, Guyana’s economy continues to be resilient. It said last year, the economy recorded another year of impressive growth of more than five per cent driven in part by high commodity prices, foreign direct investment, and domestic credit expansion to the private sector.
“Real Gross Domestic Product (GDP) is projected to grow by about four per cent this year supported by increased activity in bauxite, gold, rice and the services sectors, which should offset any expected fall off in sugar production,” the IMF said. It said that while inflation remained low, an IMF team which has just concluded the yearly review of the Guyana economy, noted a marginal drop in gross foreign reserves to about four months of imports at end-June 2012, as capital imports rose.
The IMF also said that the Donald Ramotar administration has been commended for its continued prudent macroeconomic management. “Going forward, infrastructure projects led by construction of the hydro power plant at Amaila Falls (AFHP) along with private mining investments should sustain growth levels at around five per cent,” the Washington-based financial institution said.
So it is not the PPP or those who are supportive /sympathetic of it presenting a positive picture of our national economy, on the contrary, independent sources are doing this.
Home Affairs Minister and General Secretary of the PPP Clement Rohee puts it succinctly when he said:
“The rising tide of economic growth has, as it were, lifted all boats as reflected in growing prosperity among all strata of the Guyanese society. A growing number of Guyanese people are today the proud owners of their own homes, motor vehicles and other consumer items.
“Public servants have benefited from salary increases on an annual basis which are larger than the rate of inflation, resulting in a bigger and bigger basket of goods and services.”
Rohee pointed out that Guyana recorded successes, which have been used to consistently improve the lives of all Guyanese people, at a time when other Caribbean countries are facing challenges.
“Our neighbouring Barbados Government will lay off 3,000 public servants,” he said. “But our economy is growing, old age pension has increased, subsidies for water and electricity are given to pensioners, free school uniforms for children and increase in public assistance, while at the same time the Opposition is using their one seat majority to cut funding for these programmes.”

 

extracted from the Guyanachronicle

Originally Posted by Conscience:

 

extracted from the Guyanachronicle


Thats all I need to see to know that it is nonsense.  Increased tourist arrivals are Guyanese returning home. In order to disguise the fact that fewer people came in from the USA through CJIA they have suddenly decied to include border crossing from Suriname and Brazil.  The issue is that the data for 2012 dont include those numbers, and in any case most of these arent tourists, even overseas Guyanese.  They are the normal flow of people who live near a border.

 

The PPP can claim credit for rice.  They cant for anything else and the less said about their mega projects the better.  Riddled with corruption and likely to land Guyana in major debt and possibly offering limited future benefits.

 

One can only wonder why a "specialty" hospital will be located in the Corentyne and not in regions 3 or 4, where most of the population lives.  And as usual New Amsterdam is ignored even though it is well located to assist BOTH regions 5 and 6, including those living up the Berbice River.

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