Finance Minister Dr Ashni Singh yesterday unveiled a budget to the tune of $128.9 billion and identified a revival in the sugar industry and steadiness in other traditional sectors as key to the country’s economic stability for the year.
This year’s budget, which is themed “Working Together-Reinforcing Resilience”, is 8.1% higher than last year’s, which was $119.3 billion. Significantly, there has been no increase in taxes and the income tax threshold remains the same at $35,000. The revelation of the latter was clearly a matter of concern for the Opposition MPs, who for the most part displayed uncharacteristic restraint during the Finance Minister’s sedate presentation.
Singh, who did not stop once to sip water during his almost three-hour presentation, said the country was facing challenging times, since its commodity producers and exporters were faced with “depressed prices and reduced external demand”. He added that the communities in the Diaspora are experiencing conditions that could threaten migrant remittances inflows as well as the visitor arrivals in Guyana.
The minister said that in the context of the current global economic woes efforts were being made to strengthen the country’s traditional sectors as well as to diversify the countries economy.
Meanwhile, approached by reporters for comment following the minister’s presentation, Opposition Leader Robert Corbin said he would save his comments for later when he had studied the figures properly. However, when pressed, he opined that the budget was a bit unrealistic and said he doubted all the plans highlighted could be implemented.
Singh has projected a sugar production level of 290,000 tonnes for the year, which is the same as was predicted for 2008. However, last year the country fell short of its target badly, only producing 226,267 tonnes, which represented a 15 .1% decline from the 2007 output.
According to the minister this proposed level is conditional on the successful implementation of a turnaround plan by the new management team of GuySuCo. However, he suggested that things in this sector should improve with the Skeldon factory expected to be fully operational by the middle of this year. The factory is targeted to reach production levels of 110,000 tonnes of sugar within three years.
The minister announced that $1.2 billion has been budgeted to commence construction of the Enmore packaging plant to supplement the packaging facility at Blairmount, and a prospectus to solicit private sector investment in a sugar refinery will be prepared and launched. Singh also announced that the government has deferred the payment of US$24 million ($4.8 billion) of principal and interest payments, which was to be undertaken by GuySuCo during the next three years under the Skeldon onlending agreements.
$1.1 billion has been set aside to boost the expansion and development of the country’s non- traditional sectors, an allocation which will complement the recently launched US$6.9 million ($1.4 billion) Rural Enterprise and Agricultural Development (READ) programme. According to Singh, special emphasis will be placed on “institutional strengthening, training, research and development, and increasing levels of production.” Singh explained that the Agriculture Export Diversifi-cation Programme will provide institutional support to the National Dairy Development Programme (NDDP) and the National Agricultural Re-search Institute (NARI) through the construction of new laboratories at the NDDP and the rehabilitation of the seed facility at NARI. Singh added that under this programme, the working groups for the three agribusiness clusters — fruits and vegetables, livestock and aquaculture — will advance the development of these sectors.
Further the government has allocated $500 million towards the upgrading of the Belvedere industrial estate, the expansion of Eccles industrial estate and the development of the Lethem estate.
This is part of the government’s plan to provide infrastructural support to encourage industrial development locally and it has identified these estates as having tremendous potential to boost the country in industries such as food processing, furniture making and garment manufacturing among others. Singh said that special emphasis will be placed on the Lethem estate especially with the imminent opening of the Takutu Bridge that will link Guyana and Brazil.
Meanwhile, $291 million has been allocated towards the promotion of small businesses, which would include the construction and expansion of market places in several coastal villages.
Singh told the House that “much work” has been done since last year to strengthen the financial sector and this will be reflected in the implementation of various pieces of legislation. According to him, during the year the new anti-money laundering legislation and the money transfer agencies legislation will be passed after they would have returned from the special select committee. Further, Singh said that the legislation to facilitate credit bureau establishment will be brought before the house.
Additionally, recommendations to strengthen the Financial Institutions Act will be considered, along with a proposal to bring the New Building Society (NBS) more formally under the supervision of the Bank of Guyana. Singh added that additional supervision guidelines and insurance regulations will also be issued to strengthen oversight of the sector.
Singh also announced that $7.9 billion will be spent on the construction, rehabilitation and maintenance of drainage and irrigation structures throughout the flood prone areas in the country. He explained that $1.2 billion will be spent on purchasing equipment such as excavators, generators, portable pumps, pontoons and hydrologic monitoring equipment.
The minister said that $2 billion has been allocated towards the construction of the Hope Relief Channel which will serve to help drain the East Demerara Water Conservancy (EDWC).