High energy costs responsible for slow growth in sector, says Finance Minister

Nov 07, 2013 News

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“The high cost of energy is responsible for Guyana’s ailing manufacturing sector which continues to be plagued by slow growth”, says Minister of Finance, Dr. Ashni Singh.

However, the National Competitiveness Strategy (NCS) will continue in its attempt to help the sector, he added.
The NCS outlines the responsibilities of the government and the private sector in delivering enhanced and action-oriented approaches that promote national competitiveness and greater economic growth.
However, a point to note is that despite reports of the manufacturing sector being plagued by slow growth, which was not denied by the Finance Minister, in the 2012 Budget, he reported that the manufacturing division grew by 6.8 percent. It grew by 2.4 percent, in 2013.
However, in light of these figures, members of the Opposition have maintained that the division seems to be lost in an “abyss of stagnation.”
Elaborating on this position was Treasurer of The Alliance For Change (AFC), Dominic Gaskin, in his party’s published column.
Gaskin said, “Guy Expo is disturbingly uninspiring as the familiar lament about the difficulty of finding locally-produced goods at this event rings louder every year, and at some point it must be acknowledged that we simply do not have much to offer in terms of locally-manufactured products.”
He added that after 21 years in charge, the government must shoulder the blame for the current state of the sector.
However, Dr. Singh said that the division is experiencing such a difficulty at this point because its biggest challenge is the cost of energy and this continues to twist the arm of the sector. This factor, he said, also brings to mind the relevance of the Amaila Falls Hydro Project and the need for a cheaper source of energy.

Gaskin, in his article, however, stressed how imperative it is for the sake of Guyana’s long-term economic well-being, that Guyana increases its exports relative to its imports. Attempting to achieve this by simply exporting more gold, bauxite and rice is a demonstration of the government’s lack of resolve when it comes to the, much chanted about, diversification of our economy.
The AFC treasurer then highlighted the seven-year-old National Competitiveness Strategy (NCS) which could have been the solution.
“Despite its $1.8 billion price tag,” Gaskin said that the NCS has so far failed to make a positive impact on the sector. He said that the IDB-funded programme which is scheduled to end next year, “will no doubt suffer the same fate as our much revered, but unused, National Development Strategy.”
However the Minister of Finance finds it highly repulsive that Gaskin would utter such a statement.
The Minister contended that the NCS is in the course of being implemented and that it should be given a chance to fulfill its purpose.
He said that despite the beliefs held by some members of the Joint Opposition, he wished to remind them that the NCS will always remain a product of the excellent partnership between government and other stakeholders including the private sector.
Dr. Singh also added that the NCS policy remains highly relevant to the long term preservation and upkeep of our economy.
However, Carl Greenidge, the financial point man of the A Partnership for National Unity (APNU), questioned the so- called “relevance” of the NCS which seeks to improve the country’s ability to be competitive on the world market.
Firstly, Greenidge made reference to two aspects of the NCS: The Sugar Action Plan (SAP) which was launched in 2006 and The GuySuCo’s Strategic Plan (GSP) launched in 1998 which aimed to make Guyana a leading competitor with its sugar exports on the world market and no longer  heavily dependent on preferential markets.
“First we sought through the NCS to improve our ability to compete on the world market, but now, we have an even bigger problem—-production.”

Greenidge said that measures have to be put in place to improve GuySuCo as it continues to fail miserably.
He noted too that the government has been working with the World Bank and other agencies on programmes focused on increasing competitiveness but our sectors still remain uncompetitive in certain areas.
He said that the NCS is not helping sugar because “Politics and discrimination cloak the industry, thereby holding back the progress of the state-owned company.”
He added that the US$200 million invested in the Skeldon Factory, which was also a suggestion of the NCS, turned out to be a waste of time as the complex to date is unable to serve its purpose (boosting the sugar industry).
Greenidge then asked, “How can the NCS still be referred to as relevant to our country’s economic growth when one simply considers the “Skeldon-disaster?”
While the former finance minister does not negate the fact that the cost of energy has affected the sector, he stated that it has been a problem since 1998 when at that time there was also a crisis.
Greenidge said that the growth of the manufacturing sector growth is impeded by the high cost of importing and exporting.
He noted that the cost to import materials compounded by the multiple custom forms that have to be filled out, and the bribes that have to be paid among other things, leave manufacturing companies less productive by the end of that long process and that, he said, is something the government should look at.

 

 

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