Jagdeo knocks gov’t for lack of development plan

-urges removal of tariffs on manufacturing inputs

Opposition Leader Bharrat Jagdeo yesterday laced into government for not showing evidence of a development plan for the country and simply sitting and waiting for oil revenues.

Speaking at a Guyana Manufacturing and Services Association (GMSA) business luncheon at the Pegasus Hotel, the former two-term President also urged the APNU+AFC administration to take decisive steps to have the Caricom Common External Tariff (CET) removed on a list of raw materials vital for local producers.

In July, out of the blue, the government announced that the CET was being enforced on the list of goods. The CET on these particular items had not been enforced for years but the administration said it was bound by treaty obligations to implement the import taxes.

Jagdeo believes that government’s implementation of the taxes on a range of hardware and other inputs has set a bad a precedent and increased manufacturers’ dependency on turning to Caricom for waivers, which can be pulled at any time.

Former President Bharrat Jagdeo addressing the GMSA business luncheon at the Pegasus Hotel yesterday
Former President Bharrat Jagdeo addressing the GMSA business luncheon at the Pegasus Hotel yesterday

“We cannot take away concessions from businesses … we have to defend national interests. This whole thing about removing the taxes on raw materials, under the CET …we did that and we will defend it always,” Jagdeo, in the keynote address, said.

“I have heard that some of our people have applied to Caricom for waivers and they have gotten those waivers and that is good, but the moment you go down that route, the next time a  Caricom country complains to the Secretariat, they will say ‘We are not giving the waiver.’ So, we have now put what was in our hands to execute, national policy, in the hands of the bureaucracy of the Caricom Secretariat, and I must say it is not a very healthy bureaucracy … a lot of that can kill our manufacturing sector. We should be defending that. We should be trying to get cheaper resources,” he added.

Last month, the GMSA had been notified that the Guyana Revenue Authority (GRA) would be enforcing import taxes on items ineligible for exemption, as outlined in the revised Treaty of Chaguaramas.

The local manufacturing sector has said that it wants a continuation of the tax waivers granted under the former PPP/C administration until a mechanism is worked out to have a revision of the current agreement.

But Minister of Business Dominic Gaskin had explained that it was not a decision government could undertake by itself as it has legal implications for the country because of obligations within the Caribbean Community (Caricom).

Therefore, he said Guyana needs to work with Caricom to have a revised list of ineligible items that would see the raw materials needed by this country’s manufacturing sector, which cannot be accessed in the region, struck off the current list.


More lobbying

Some of the attendees at the luncheon
Some of the attendees at the luncheon

President of the GMSA Eon Caesar told the luncheon that his organisation was going to press harder to see the removal of the CET on the items in question.

“The GMSA is going to seriously ramp up its advocacy for more realistic taxation. We are going to ask for the revision of the decision to implement [the] CET … The survival of our manufacturing industry is at stake,” he asserted.

“Guyana’s manufacturing products are already uncompetitive in the international marketplace which is mainly due to the high electricity cost for production. The 40% import duty on raw materials can remove…golden cream margarine and other (products) from the market entirely,” Caesar added.

He explained that with the CET increase, some basic, locally-produced items will see consumers paying more at the market cash registers. “The cost of margarine by 25%, where a 450g will now cost $354 to produce instead of $342 and it will increase the cost of a 390ml ketchup from $220 to $268 and hot sauce from $354 to $403. This is the harsh reality,” the GMSA President ex-plained.

He noted that at a similar forum, where the Minister of Business was the main speaker, he (Caesar) had said that the GMSA believes that manufacturers were functioning in “a shaky economy” but was assured by Gaskin this was not so. “Minister Gaskin asked us to avoid becoming distracted by the notion of an economic crisis,” Caesar said and read an excerpt of Gaskin’s speech, quoting him as saying “Guyana is not in a crisis,”

As A result, the GMSA invited the Opposition Leader to speak on Guyana’s economic condition.

The one-time Finance Minister also made reference to Gaskin’s presentation and disagreed with the position that the country was not in crisis. He said that that in addition to not frontally addressing the economic crisis, government was not demonstrating that it had either a long or short-term plan.

“I believe the country is in problems and is in a crisis. We need to generate wealth, our revenue is falling not because PPP gave too much concessions but because of a shrinking of economic activities and the government don’t have no clarity on where we are going,” Jagdeo argued.


‘Waiting for oil’

Jagdeo said that it was not that the country does not have the potential to maximize fiscal opportunities and implement strategic and sound economic plans, but it seems to him that government was waiting for proceeds from the huge offshore oil deposit which was discovered last year.

“Here we are at an inflationary risk and we are tightening monetary policy, thus creating more hardships. We have fiscal space to do more and we have the monetary tools…,” he said.

“The government is like, Samuel Beckett’s ‘Waiting for Godot’…standing waiting for this Godot who never came. The oil is Godot for them. They are waiting for it to come and solve all the problems of the world. Every minister, everybody (says) ‘we are waiting for oil.’ They are in that mode and in the meantime, no evidence of a long term plan,” he said.

Oil revenues are believed to be at least six years away, if not longer.

He also declared that the People’s Progressive Party (PPP) stands ready to work with government to find strategies and implement policies aimed at Guyana having solid macro-economic stability and will “support the government fully” on initiatives geared towards that objective.

“We will contribute to that long-term plan. We are clear about where we should take our country… We have key fiscal policies which can be used in the short-term and to offset economic instabilities. This is not rocket science. Many countries have done this,” Jagdeo said.

Only businessman Gerry Gouveia used the question and answer forum to pose a question to the Opposition Leader, enquiring if he was open to working with the current government on matters of business development.

“I have said this before, we can fight the politics and do well in the future without destroying our country in the process, without causing misery, without our private sector losing business…we could collaborate around those things …we are willing, we’re still willing, at any time but it has to be matched by reality, seriousness not rhetoric,” Jagdeo said.



Around the Web