Rice and Sugar currently biggest threat to APNU+AFC 100 day plan

Jul 19, 2015 News

– Minister of Finance, Presidential Advisor

By Kiana Wilburg

It is just over 60 days since the Granger administration has been in office. Already, it appears as though there are two significant threats to its 100 day plan—sugar and rice.
This is according to Presidential Advisor on Sustainable Development, Dr. Clive Thomas. Finance Minister, Winston Jordan agrees with him.
In a recent interview, Dr. Thomas said that the worrying state of the rice and the sugar industry will affect some of the promises the Granger administration made to the Guyanese populace during the 2015 election campaign period.
“But it wouldn’t be their fault and the citizens need to be patient with them,” Dr. Thomas said.
The economist reminded that the new administration already had to divert $3.8B bailout to the Guyana Sugar Corporation (GuySuCo), which is already $90B in debt. He noted that this was not an expenditure the government catered for. This was part of a request for $16.8B made through the Minister of Agriculture, Noel Holder, for the rest of the fiscal year.
Minister of State, Joseph Harmon, had said, however, that government, “is not pouring money down a dark hole.”
Harmon had said that the Agriculture Minister briefed Cabinet that the $3.8B will be used for the payment of wages and salaries, current payments to the National Insurance Scheme, payments owed to the Guyana Revenue Authority and the urgent need to purchase fertilizers, fuel, lubricants and spares for equipment.

Presidential Advisor, Dr. Clive Thomas

Finance Minister, Winston Jordan

He had said that the purchase of fertilizers is to secure the first crop of 2016 cane as it is already late for the application. Harmon had said, too, that the $3.8B approved also takes into consideration, payments overdue to suppliers. The Minister had said that this is necessary to reduce the backlog of debt created by the Corporation.
As for the remaining $13B which is the balance of the $16.8B request, Harmon asserted that Holder will return to Cabinet to indicate when more funds would be needed and he will of course have to justify his requests. Harmon said that Government has already mentally prepared for the likelihood of additional requests coming before year end.
He had said, however, that the money was granted on condition that it would be returned to the government’s coffers. The politician said that the cash flow from June 18, last, to the last week in August 2015, for GuySuCo is expected to be about US$1.267M while expenditure is estimated within the vicinity of US$5.079M.
He said, too, that for the period August to December 2015, GuySuCo is expected to rake in US$13.056M. It is expected that once this money is acquired from its usual sales, 60 per cent of the money advanced would be repaid as agreed.
As for the booming rice industry, Dr. Thomas said that it is important to note that this sector is also facing a dispiriting future. He said one needs to consider Guyana’s dilemma in this regard as the Petro Caribe coffers are empty and new rice markets are still to be found.
Compounding the problem is that the Finance Minister had said that during his recent visit to Venezuela, he was told in no uncertain terms that the South American neighbour would no longer be interested in renewing the oil for rice barter under the Petro Caribe deal which will come to an end on November 16, next.
He said that Guyana was told to find new markets for its rice.
Venezuela’s decision regarding the rice deal comes at a time where it is claiming sovereignty over Guyana’s waters since the significant oil find by the American oil giant, Exxon Mobil just 100 miles off of the Stabroek Block. But Government has made it clear that it will do all that is necessary to ensure that those who depend on the industry are not made to suffer from any impending economic shocks.
Dr. Thomas said that with the state of the two traditional revenue earners in mind, there is no doubt that government would be tempted to ensure that they prevent both sectors from any collapse. He emphasized however that in doing so, the “economic” plans of the APNU+AFC government will be affected.
The Presidential Advisor opined that the state of the economy is perhaps beyond what the government imagined was taking place.
The Finance Minister said that he agreed with Dr. Thomas’ points. In an interview with Kaieteur News yesterday afternoon, he said, “The new administration is indeed facing two significant threats to the 100-day plan which includes the reduction in the Berbice Bridge toll and significant salary increases for government workers and for old age pensioners.”
Jordan added, “The transfer of the monies to the sugar industry was indeed large and unanticipated expenditure. But the state of the rice and sugar industry will not affect the implementation of our plan. It will only affect the magnitude of it.”
“For example, the increases promised to the public servants will be implemented but it would not be of the magnitude as we had planned for. In many instances, we covered ourselves before assuming office as we had always said that our plan will be dependent on what we found in the Treasury.”
Since the coalition government assumed office, it has been on a hunt for hidden accounts holding millions of taxpayers’ dollars and having them placed into the Consolidated Fund. This will aid them in ascertaining the fiscal position of the country as the Finance Minister prepares the country’s budget which he hopes to lay in the National Assembly by August month end.