Struggling economy leaves Guyanese stuck in survival mode

Struggling economy leaves Guyanese stuck in survival mode – Opposition MP

Aug 29, 2017 News

The dismal performance of the economy at the end of the half year has left Guyanese who were promised “the good life”, stuck in survival mode.
This is the opinion of Opposition Member, Juan Edghill.
Speaking with Kaieteur News recently, Edghill commented that there is no real excitement that is driving investment in Guyana. “We are just in survival mode,” he stressed.
The former Junior Finance Minister said that the lack of an economic plan has basically left the government dutifully collecting taxes. Edghill said that once the Government has essentially turned into a tax collector and not a stimulator of business, then there will continue to be gloomy economic performance.
Edghill said that given the rate at which the economy is going, it is no wonder why Guyanese are losing hope in the Government on a daily basis.
“The real issue here is a lack of a proper policy. When I commented on the foreign reserves before, which show a decline, I said that it is not a big case of worry right now. However, if it continues to slip, we will have to start implementing currency control mechanisms as it relates to imports, and that is returning to the past…This would mean that we won’t have enough to cover what we are importing and that could just create a situation of panic.”
“There is a great need for a viable economic plan to be put to the people of Guyana. A yearly budget is supposed to be a financial plan that gives you a sense of understanding as to where you are taking the country. But what we had in the budgets for 2015, 2016 and 2017 was massive numbers, all void of a policy framework.”
The Opposition Member said that what is being reported now is under performance, under implementation, and low levels of spending under the APNU+AFC Government. He said that Guyanese were promised the good life, but daily, they are realizing that they are stuck in survival mode.

SUGAR
In reviewing the performance of the economy at the end of mid-year, the Finance Ministry identified a number of risks which can undermine the business climate and the overall economy for 2017 if left unchecked. Among those risks identified were the state of the sugar industry and the underwhelming performance of the public sector investment programme.
The Finance Ministry said that one untenable risk is that of management of the production of sugar which continues to be plagued by inefficient cost structures, weather and labour relations.
The Ministry said that the cost structure of the industry continues to be misaligned and the discussions on restructuring and diversification are yet to yield benefits to the corporation’s bottom line.
Once again, the $9 billion allocation to the Guyana Sugar Corporation (GuySuCo) has continued to crowd out needed expenditure in other sectors. The Finance Ministry said that the related shortfall in production will continue to hamper growth, constrain export earnings and impact the fiscal deficit.
GuySuCo has signaled that during the second half of the year, funds will be secured from sales of molasses and sugar and sale of land. In recognition of the need to arrest the unsustainable position of the company, a decision to privatize the Skeldon plant and estate was taken.
Since then, Government has proposed with Parliament approving, $130 million for the creation of a Special Purposes Unit to deal with the valuation and sale of related assets. In addition, the diversification of less productive estates is intended to provide alternative employment opportunities for workers in the industry.

INVESTMENT PROGRAMME
Another hurdle on the domestic front, as identified by the Finance Ministry, has been the underwhelming pace of implementation of the Public Sector Investment Programme (PSIP).
According to officials within the Ministry, this was underpinned by poor management of the public sector investment programme across almost all sectors, a limited pool of qualified contractors, dearth of procurement planning, and a lack of accountability of supervising consultants, among other factors.
The slow pace of implementation was reviewed at the level of Cabinet at the half year and it is anticipated that this level of engagement with Heads of Budget Agencies will occur at least quarterly in light of the chronic institutional weaknesses that prevail.
According to the Ministry, many Heads of Budget Agencies continue to be weak in demonstrated capacities and the reviews at Cabinet level will determine how to fill existing capacity gaps.
Additionally, developing public sector capacity to spend effectively has been placed at the forefront of reform agenda for public financial management and by the end of 2017, the department of public service is expected to establish planning units in all key sector ministries.
Further, in September, Government will undertake a Public Investment Management Assessment that will evaluate the design and effectiveness of institutions that shape investment planning, allocating investment to the most productive sectors and implementing investment.
The results of this assessment will help to drive additional reforms going forward.