Gov’t taking steps to ensure oil revenue not squandered

-Granger tells Parliament

President David Granger addressing Parliament yesterday

Oil production, expected to begin in 2020, “will be the most transformative economic development” in Guyana’s history and the current administration is taking steps to ensure that revenues accrued from the sector will not be squandered but will be invested strategically to build human and institutional capacity, address the infrastructural deficit and provide economic security for future generations says President David Granger.

“Your government is committed to transparency in the management of this sector. We have already made public the petroleum contracts signed between investors and the Government of Guyana,” he said.

Granger’s remarks drew stifled laughter from the Opposition as he addressed yesterday’s opening of the 97th Sitting of the National Assembly, at Public Building, Georgetown. The stifled laughter was mild compared to being drowned out last year by desk thumping and booing by the Opposition in the Parliament Chambers as he delivered his address then. 

While Granger pledged transparency, a controversial Production Sharing Agreement was stealthily drawn up in 2016 by his government with ExxonMobil subsidiary, EEPGL and it contained a secret signing bonus and provisions that have been deeply criticised.

Range

In a 50-minute address that covered a range of governance issues, Granger said the newly-established Department of Energy (DoE) is currently reviewing the re-drafted Petroleum Commission Bill. Other legislation with the DoE, he said, include amendments to the Petroleum (Exploration and Production) Act and Regulations.

Contending that Government will ensure that oil revenues “are prudently managed” for the present and future generations in keeping with the objective of securing “the good life for all”, he said, this will be done through a Natural Resource Fund (NRF) to be established “before first oil in 2020.”

The NRF will give priority to investments in human capital, particularly the public education system, and in key catalytic infrastructural projects that improve productivity and bridge the divide between the coastland and hinterland, he said.

The Green Paper on the NRF, which was laid before the National Assembly in August, he said, was consistent with Government’s conviction that people should fully understand its implications and are involved in the discussions on its establishment and management.

Government has already begun to build the capacity of key agencies concerned with management of the NRF and has developed an implementation plan to ensure it is fully operational next year. The mechanics of the NRF have also drawn sharp criticism.

On natural resources, Granger said a ten-year strategic plan for the sustainable development of mineral resources is being drafted and is expected to lead to a National Minerals Sector Policy Framework and a National Minerals Sector Action Plan.

On forestry management, the new Code of Practice and Forest Regulations which was introduced in the National Assembly in May 2018, he said, has enhanced the governance architecture of the forestry sector and has allowed Guyana to move closer towards a Voluntary Partnership Agreement with the European Union under the Forest Law Enforcement Governance and Trade programme.

Log export policy

A National Log Export Policy has been drafted and approved by Cabinet, he said, and implementation is envisaged for 2019, after review and sector sensitisation.

The legislative agenda in 2019, he said, will be packed. It includes, he said, the Public Debt Management Bill to address reforms of the procurement system, improved expenditure planning, management and execution of the public sector investment programme; the Natural Resource Fund Bill which will be placed under the Bank of Guyana and will require parliamentary approval for withdrawals; the Mining Act and Regulations to ensure that mining is better regulated to ensure safety, efficiency and environmental sustainability early in 2019; and amendments to the Guyana Gold Board Act and Regulations to reduce the use of mercury in the mining sector and to ensure better environmental practices on land and water resources.

Also on the legislative agenda are the Judicial Review Bill, to provide the courts with gatekeeping functions to distinguish between frivolous or vexatious applications, the Intellectual Property Rights Bill to upgrade Guyana’s intellectual property rights legislation, and the Integrity Commission (Amendment) Bill to amend the schedule of declarants to accurately reflect today’s range of senior public officers.

Noting that this fiscal year’s budget will be presented in an international economic environment in which global economic growth has been revised downwards due, largely, to the negative impact of trade tensions and higher oil prices and from which Guyana’s economy has not been immune, Granger said, the budget, “is expected to be based on the theme of transformation for sustainable development and green growth towards achieving the good life.”

The threat of US sanctions against RUSAL, a major mining multinational, he said, has created uncertainty in the bauxite sector. “The spike in oil prices has impacted adversely on the production costs and on output in key sectors of our economy.”

Nevertheless, he said, with government’s prudent management the local economy “is expected to enjoy moderate growth this year.”

Visitor arrivals

Visitor arrivals, up to August this year, he said, showed a 15.23 per cent increase over the same period last year, adding an estimated US$94 million to the economy for that period.

Agriculture, which accounts for 16.6 per cent of the GDP in 2017 and employs 17.8 per cent of the labour force, he said, will see improved drainage and irrigation, the introduction of high-yield crop varieties and encouraging integrated pest management to build resiliency in the sector.

“We intend to reduce crop losses and damage due to flooding by increasing the coastland’s drainage coefficient from 1.5 inches to 3.5 inches per 24-hour period, within the next three years.”

He noted that the Guyana Rice Development Board, this year, released 15 new high-yielding rice varieties with the potential of yielding an average of between seven to 8.5 metric tonnes of rice per hectare or 45 to 55 bags an acre. “New high-yielding, salt-tolerant and aromatic rice lines will be released in 2019.”

In terms of agro-processing, he said, the Regional Agricultural and Commercial Exhibitions (RACEs) have been showcasing the industry comprising hundreds of small agro-processors engaged in producing and packaging a wide range of products using local products.

The sugar industry, when he took office, he said, was in “dangerous decline” with “unsustainable and prohibitive production costs, declining production and unsound investments” and which had placed the industry in a perilous state.

Because of its importance, he said, the industry was being restructured and measures including estate consolidation and workforce downsizing, were necessary to save it.

The Guyana Sugar Corporation and the National Industrial and Commercial Investments Limited (NICIL), he said, are developing a plan to boost production in the remaining East Berbice, West Berbice and West Demerara estates.

“Sugar workers have not been abandoned to an uncertain future.  The divestment of some of the sugar estates, which is expected to occur as early as the first half of 2019, will see some displaced workers being afforded the opportunity to regain employment.”

Displaced workers are being provided with opportunities, he said, “to participate actively in other sectors of the economy, such as the production and processing of rice and other crops, livestock, fisheries, construction, manufacturing, services and mining.”

On youth employment, Granger said, a May 2015 Caribbean Development Bank study, ‘Youth are the Future: The Implications of Youth Employment for Sustainable Employment in the Caribbean’, estimated Guyana’s youth unemployment rate at 40 per cent.

A recent labour force survey, he said, “found that 35.2 per cent of our young people, aged between 15-24 years, were not in education, employment or training.”

To deal with youth employment, he said, Government launched a number of initiatives including the Hinterland Employment Youth Service (HEYS) and the Youth Entrepreneurial Skills Training Programme (YEST) to stimulate youth employment through the promotion of entrepreneurship, self-employment and skills training.

A total of 3,941 youth, between 18 and 35 years, he said, have benefitted from the HEYS programme which has created 2,051 businesses over the past two years in 215 indigenous communities. The HEYS programme will continue in 2019, he said.

Since September 2017, the YEST has trained an additional 721 youths attached to the Sophia Training Centre, Kuru Kuru Training Centre and Vryman’s Erven Training Centre. These programmes complement the other technical and vocational training opportunities being provided by government and which also benefit young people, he said.

In relation to small businesses, he said, Government will continue to remove constraints to small and micro enterprises development and, in particular, access to government procurement, access to finance and access to business registration.

“We will activate the 20 percent minimum quota for small businesses within public procurement”, he said.

“Cabinet has approved the Small Business Procurement Programme which will see mandatory set-asides for approved small businesses and set-asides for sub-contracting. All government agencies are expected to participate in the programme,” he said.

Public health system

On the public health system, he said, Government was correcting the inadequate infrastructure, high maternal mortality rates, weak disease prevention measures, poor emergency health response and constraints to access to health services, particularly for hinterland residents, that it found on entering office.

Apart from a number of initiatives taken, he said, the Maternity Unit of the New Amsterdam Hospital will be upgraded next year. The Ministry of Public Health, he said, is currently mapping the proximity of health facilities to communities to ensure that, as far as possible, a health facility is located within five kilometres of a community.  “Plans are on stream to upgrade health centres to poly clinics, especially in large catchment areas.”

A programme for the screening and treatment of eye diseases in children and providing them with low-cost spectacles, he said, “is one of the many interventions that will be undertaken.”

In terms of security, Granger said, “We do not underestimate the gravity of the public security challenges which we face but, equally, no one should underrate our resolve to make our country safer.”

The prison system will be transformed from being primarily penal institutions to correctional facilities, he said, and the Mazaruni Prison will be expanded and the Georgetown Prison reconstructed in 2019 to reduce overcrowding and improve prison safety.

Government will launch, he said, a Commission of Inquiry into the tragic incidents which occurred in Surinamese waters during the period 27-28 April 2018 and again on 3rd May 2018, when fishermen were attacked and some of them murdered.

On the influx of migrants from Venezuela, he said, “The crisis in that country has created challenges for our small state and has led to an estimated 2,500 Venezuelan migrants seeking refuge, mainly in our frontier communities.”

Government will provide, within its means, he reiterated, “humanitarian assistance, including food and medical treatment and temporary settlement to these migrants.”

Venezuelan migrants, including undocumented migrants entering Guyana, he said, would be registered and issued with a three-month permit of stay which could be further extended.

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