Finance Minister under fire over timber stats

In the wake of contradictory figures from the forestry commission, Minister of Finance Dr Ashni Singh’s statement that the increase in timber export earnings this year was due to “an expansion in plywood exports” has come under fire from the opposition.

“He is now disseminating falsehoods and misrepresenting the truth to the Guyanese public,” AFC leader Khemraj Ramjattan told Stabroek News yesterday while saying that Singh must be held to account. “Coming at a time when log exports are a major public issue, the statement by the Minister which understates the scale of log exports does little to reassure an increasingly skeptical public,” chartered accountant and activist Christopher Ram said while APNU’s finance spokesperson Carl Greenidge told Stabroek News that Singh has to explain his statement.

Singh, in the recent mid-year report on the economy, said that for the first six months of the year the forestry sector recorded growth of 38.1%, “supported by the introduction of new incentives to harvesters and sustained demand from the construction sector and furniture manufacturing subsector.” This was not explained.

Forest Products Marketing CouncilAs a consequence, the growth target for the sector has been revised upwards significantly from the budgeted 3.3% to 15% growth for 2014. The report said that timber export earnings rose to US$21.3 million, a 31.3% increase due to an increase in export volume, “reflecting an expansion in plywood exports.”

However, Guyana Forestry Commission (GFC) data does not support Singh’s statement that the increase in exports was largely due to an expansion of plywood exports. Infor-mation supplied to the International Tropical Timber Organization (ITTO) and to the Forest Products Development & Marketing Council (FPDMC) of Guyana Inc by the GFC show that plywood exports for the first half of this year amounted to 1931 cubic metres from 1851 cubic metres for the same period last year, an increase of just 4.3%. These plywood exports were valued at US$973,925.

Forest products export figures provided by the GFC to various agencies showing the increase in log exports

Forest Products Marketing Council

In contrast, log exports for the first half of this year amounted to 54 376 cubic metres compared to 30 356 cubic metres for the same period last year, an increase of 80%. These log exports were valued at US$8,726,893.

The figures do not bear out Singh’s statement that “an expansion in plywood exports” is responsible for the increase in timber export earnings. Stabroek News had been trying to obtain log export figures for some time now but the authorities had refused to provide these numbers.

Yesterday, the GFC finally provided production and export figures but did not break these down. Neither did the GFC dispute the figures it supplied to the ITTO and the FPDMC. According to the GFC statement, the timber and plywood sub-category of forest products recorded an increase in export volume of approximately 53% and a corresponding increase in export value of 30% when compared to the first half of 2013. “The Ministry of Finance Report is therefore corroborated by the GFC’s statistics and as reported by ITTO, which shows that the sub-category of timber and plywood showed strong performance in 2014,” the statement asserted even though it did not help the minister’s case.

The GFC did not address the export figures for logs and plywood individually and from the figures it supplied to the ITTO and the FPDMC, it was logs rather than plywood that largely contributed to the increase in export earnings.

The GFC also said that as noted in the Ministry of Finance half yearly report, “plywood production indeed is one of the main drivers for the growth in the sector with a 65% increase in production recorded in the first half of 2014.”

The minister had not spoken of production but of plywood exports and according to the figures supplied to the ITTO and FPDMC, this only increas-ed by 79 cubic metres, a 4.3% increase.



Meantime, yesterday, Ramjattan accused the Finance Minister of disseminating false information to the public and said that Singh’s credibility is “now in deficit.” Citing several recent instances of the minister’s actions including the non-implementation of two modules of government’s computerized accounting system – the Integrated Financial Management Accounting System (IFMAS) – as well as the spending of money without the approval of the National Assembly, Ramjattan said that this ought not to be how a minister, especially a Finance Minister must function.

The AFC leader said that Singh has been presenting “clearly false evidence” and expressed disappointment as he said that he did not expect the minister to “descend so low” as he thought that Singh was a “brilliant” person.

“What he has done here, another contempt proceeding (in the National Assembly) can be brought against him because he lied,” Ramjattan asserted while noting that the matter is very serious because elected representatives must truthfully answers questions in Parliament.

“Parliamentarians in other jurisdictions…for that kind of lie, would have been compelled by the Prime Minister or Presi-dent to resign,” Ramjattan said. He added that this is not the first instance that government officials have been “besmirching themselves and their characters with all these lies.”

Meantime, Ram, stating that his response is based on the understanding that the GFC reports both quantities and dollar values, told Stabroek News that he cannot understand how the minister’s numbers could differ from those cited by the GFC. “It is possible that the immediate source of the information in the mid-year report is the Bank of Guyana Balance of Payments statistics or the data from the Bureau of Statistics. But they all should have had a common source – the GFC which would have been supplied with the information from the exporters,” he said.

Ram said that it is clear that a 4.3% increase in plywood exports could not account for the increase in timber export earnings. “The increase – and we must be ever conscious of the practice of improper transfer pricing and under-declarations – can only be explained by reference to log exports,” he said while adding that coming at a time when log exports are a major public issue, the statement by the minister which understates the scale of log exports does little to reassure an increasingly skeptical public.

“Credibility of public information is critical to public confidence but each time public information raises questions and doubts the public’s confidence in the integrity of public accounting and accountability declines,” Ram asserted while adding that this is compounded by the “sometimes nonsensical, self-serving and misleading information” by the GFC.

The GFC has not provided export figures when requested and last week, in an ad which “responded” to a claim that “log exports have risen by 60 percent for the first half of 2014,” the agency dodged the claim entirely. Instead, the GFC said: “the first half of 2014 reflects a 53% increase in the exports of wood products, not only logs.” Given that the “claim” addressed log exports, it is not clear why the GFC did not address this directly as the information on the 80% increase in log exports was readily available.


Has to prove

Greenidge, meantime, told Stabroek News yesterday that the minister now has to explain his statement. “He now has to prove that he is right,” he said while noting that he would not expect that the figures published by the ITTO are inaccurate. ‘It is nobody’s problem except the government,” the APNU MP stated while adding that the figures now have to be sorted out. He said that the figures by the different agencies should be consistent and if there are differences, it should be within reasonable limits. “The Minister of Finance shouldn’t have figures that nobody else has,” Greenidge asserted.

Over the past week, media reports on the operations of Chinese logging company Bai Shan Lin and Indian logging firm Vaitarna Holdings Private Inc (VHPI) have seen the companies as well as the GFC and Ministry of Natural Resources defending the operations of the firms in a flurry of statements when silence had previously been the standard. No figures for log exports were provided by the companies or government agencies until yesterday following the reports in the Stabroek News.

Minister of Natural Resources and the Environment Robert Persaud when contacted recently said that he was travelling and did not respond to an emailed reminder sent last week. GFC Commissioner James Singh, citing a “bad experience” with a reporter, recently told Stabroek News that any information would have to be “formally” requested from the GFC in writing with the request copied to the Ministry of Natural Resources. However, the information was issued yesterday without a formal request.

Over the past few years, exports of logs rather than processing the timber locally has long been a concern since numerous promises have been made by the government and foreign investors about value-added operations. The promise of value-added has been seen as sugar coating to enable the export of large quantities of logs, particularly to China and India, even though there is little job creation here or value enhancement.

Ramjattan yesterday noted that nothing has been done to incentivize value-added manufacturing here. He said that that he has also been in contact with Norwegian officials who have expressed disappointment in what government is doing and have also spoken of more intense monitoring of the forest. Guyana and Norway signed a landmark forest protection deal in 2009.






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