Slowdown in economy started under PPP in 2014 – Finance Minister, Jordan

After facing accusations by the People’s Progressive Party (PPP) that the actions of the Granger administration were slowing down business and basically destroying a “good economy” they inherited, Finance Minister, Winston Jordan revealed that the slothfulness in commercial turnovers actually started in 2014.

Finance Minister, Winston Jordan

Jordan said that with supporting evidence, this can be traced back to the time when former President Donald Ramotar prorogued the Parliament on November 10 and later dissolved it to pave the way for the 2015 General and Regional Elections. He said that he had cause to tell the PPP’s General Secretary, Clement Rohee that he can show him that business continued to slowdown even after the elections, “given the antics of the PPP when they lost.” The Finance Minister said, “During our exchange on the budget on Friday last, they asked me about the slowdown in the economy and Rohee said that it is because of the rash behaviour of our Government in witch-hunting and what’s not. I had to let him know that the slowdown of the economy actually started in 2014 and not two months into the new government. And this will be reflected in the budget.” He continued, “I explained to him that the reasons businesses experienced the slow turnover is because of three reasons, the first being the uncertainty created by the prorogation of the Parliament. Secondly, this continued to be fuelled by the dissolution and the long time taken to call a date for the elections. Lastly, the period which was supposed to see the nation moving forward, after the announcement of the results, saw instead the antics of the PPP when they lost elections.” The combination of these events only served to heighten the fears of the local and foreign investors. And besides, an election is something which usually affects businesses across the board. But as I said, this can be traced back to 2014.” Given the complaints of there being a lag in the commercial turnover for businesses, the Granger Administration has a number of plans under review to boost the economy. They will however be incorporated in the 2015 budget, a draft of which has already been presented to Cabinet. Jordan has already met with the Private Sector Commission (PSC) to note its concerns as well as its proposals for the upcoming budget. Through a missive, the Commission had said that it urged Jordan to consider a stimulus to boost the economy since there has been a slowdown in business. The Minister gave his commitment to consider this proposal.  He also committed to ensuring stability of the currency through appropriate monetary policies. The discussions between the two focused on a number of areas, such as the urgent need for liberalization of the Telecommunications Sector. The PSC had also expressed its views on the need for renewable energy, especially hydro-electric and solar power projects, but Jordan had made it clear that Government does not intend to proceed with the Amaila Falls project in its current form. The PSC nevertheless urged for the consideration of other renewable energy sources. With regard to the solid waste dilemma, including problems with the Haags Bosch landfill project, the Commission had recommended the consideration of waste to energy systems since Guyana now generates enough solid waste to make these feasible. It had also recommended the establishment of a solid waste management authority.  The Finance Minister then suggested that private capital be mobilized for recycling facilities. Also coming into focus was reform of the taxation system. The Minister had informed the PSC that the Government is about to commission a tax study which would be utilized, along with a study conducted by Duke University, to develop a comprehensive taxation system for the country. The Commission then urged the Minister to consider a reduction in the rate of corporate taxation since this could increase government revenues. As for preparations on the 2015 budget, the Finance Minister had revealed that inflation “remains in check.” The 2014 Mid-Year report produced by the Ministry of Finance indicated that over the first six months of 2014, growth continued to be positive and inflation remained low. The same was reflected in the 2013 mid-year report which said that inflation was contained by the end of June and the index had moved by only 0.2 percent relative to December, 2012. Jordan had said that internal revenue collections are on target but preferred not to divulge too many details in this regard. Given the worrying performance of the country’s traditional revenue earners, such as sugar and gold, the Finance Minister said that the budget cannot be expected to be anything close to the $220B one which was presented to the House in 2014 by Former Finance Minister, Dr. Ashni Singh. Jordan had said that such an extravagant budget is also not possible given that the nation is already in the seventh month of the fiscal year. He had emphasized that a “modest” budget is in the making. (Kiana Wilburg)