Consideration must be given by the government to addressing the need for a stimulus package for vulnerable sectors and in the current economic environment, there is a need to budget for further diversification, the Private Sector Commission (PSC) says.
In a press release yesterday, the PSC said that it has conducted a preliminary review of the 2009 Budget and in its view; the Budget is “clearly intended to consolidate and secure the country’s economy at a time of an unprecedented global financial crisis from which Guyana is not immune” and the Commission believes that the Budget has set some desirable benchmarks for the economy to achieve
The PSC however urged the government to recognize that, in the current world economic crisis, Guyana’s main product exports, such as sugar, bauxite, timber, gold, agricultural and other natural resources are likely to be under threat and there is a need to budget for further diversification and investment in agriculture, energy, manufacturing and tourism.
“The Commission strongly believes, therefore, that, even as the Budget debate is taking place in Parliament, consideration must be given to addressing the need for a stimulus package directed at those sectors of the economy which can readily create employment and which are the most vulnerable,”, the statement said.
It asserted that the PSC accepts that Minister of Finance, Dr Ashni Singh has opted for a conservative Budget intended to address the significant financial deficit and recognizes that in order to cope with the threat of runaway inflation, the government has committed to extensive expenditure on the construction of schools and medical facilities and on other essential social services as well as subsidizing the cost of fuel, water, electricity and flour and other critical goods and services, all of which may have contributed to the deficit.
The Commission said that it believes that a framework has already been put in place which provides the opportunity for ongoing consultation and cooperation through the National Competitiveness Council and other development strategy agencies in which civil society is able to actively play a constructive and meaningful role. It added that for the country to confront the oncoming economic threat, it is essential that the Government, the Opposition and Civil Society work together within this framework to meet the challenge.
Meantime, the private sector body said that it is looking forward to consultations with government on the report on tax reform, currently before the government, which was submitted through the Millennium Challenge Cor-poration, and which should ensure Guyana’s competitiveness regionally and internationally.
The statement once again raised the issue of the continuing need for public sector reform to increase the efficiency and reduce the red tape and operational cost of public administration and governance.
It asserted that the PSC will be making the strongest possible representation to the Minister of Finance for the need to protect and support the competitive development of the tourism sector while it also commended the government for having recognized the need for similar support to the wood value-added sector by removing the 2% export commission.
“Finally, the Commission wishes to note that, while the government’s positive budget projections for growth are commendable, the vital importance which the sugar industry plays in the achievement of these projections and the economic growth of the country cannot be overemphasized. The Commission will, therefore, be seeking an early meeting with the Minister to discuss the situation in the sugar industry”, the statement said.
In a recent interview with GINA, Prime Minister Sam Hinds referred to the global debate about stimulus packages.
According to GINA, the PM “explained that some parts of the world were in confusion with respect to their financial situation and huge stimulus packages were being given but this was not the case with Guyana.
“Instead of such packages, government has embarked on several infrastructural projects which were catered for in the budget. For example, he said some $7B was given to the Ministry of Public Works to carry out these works as well as in the case of drainage and irrigation. He said that the stimulus exists in these infrastructural works.”
