With the right investment opportunities and economic environment, Guyana’s traditional sectors can thrive to provide more employment and other benefits, rather than a sole dependence on taxation to garner capital.
PPP/C Presidential Candidate, Irfaan Ali shared this opinion during a recent interview on the creation of jobs, where he assured that under his Government, economic sectors will not be neglected. It was explained that the prospects of oil is not the “only saviour” since traditional sectors are opportunistic with assistance from Government.
“We need a Government that has ideas and vision and not a Government that seems to be barren on ideas and think that taxes is the only solution in terms of raising capital. Also, this thing that oil and gas as the only saviour out there or opportunity that is ahead for Guyana. Oil and gas would bring tremendous opportunity for Guyana but there are great opportunities in all the traditional sectors and also in newer sectors with a little tweaking,” he stated.
Ali expressed that draconian measures on Government’s end have seen downward spiralling of most of these sectors. This is due to the lack of incentive regime for investments among other unfavourable moves that was noticed especially in the mining sector. In five years, he informed that the industry has declined by approximately 40 per cent, with an average 15,000 persons directly affected.
“These are sectors that have performed well for Guyana. In 2014, we had approximately 3000 dredges in the mining sector. Each dredge would have employed about five persons directly [apart from the] suppliers, manufacturers, those who supply food…You’re talking about 15,000 jobs in 2014. Today, only approximately 60 per cent of those dredges are in operation,” the Presidential Candidate related.
He added that the significant decrease was as a result of the draconian measures that the APNU/AFC Government “brought down on the mining sector that caused persons to hold back on investments. There was no capital investment, no reformation in the sector and the small and medium-sized miners were disseminated”.
For the mining sector to flourish again, he added, tax concessions and the two per cent royalty rate are some factors which must be considered. He lamented on the numerous documentations that stymie small miners from conducting their operations.
“We have to look at tax concessions that would benefit the small and medium scale miners, help them in mining equipment, retooling themselves in the industry. We have to revert to the two per cent royalty rate…The level of documentation that small miners have to get before they actually go into operation has created tremendous hardship for their own growth and development.”
Ali posited that Guyana’s hinterland road infrastructure has also been at its worst for the past two years. This has been coupled with the skyrocketed cost for fuel, which has seen little assistance from Government.
“Then we have to look at the land management and allocation system and address the issue of high fuel costs. The costs for fuel in some of the areas that our miners are mining now is totally non-competitive. In the past, there was a particular method that was used to assist miners in this regard. We have seen that the Government has shied away from this and then look at the state of the hinterland roads,” he asserted.
Two months ago, persons commuting the Linden-Lethem road called on Government to urgently intervene and repair certain sections which were impassable.
Sections of the road — at Fairview in Region Nine and Kurupukari in Region Eight — were completely impassible, with some sections being inundated when there is heavy rainfall.
Manufacturing
For the manufacturing and business sectors, he said that grants and special funds will be injected to stimulate activities by linking entrepreneurs with the necessary resources. Zero-rated exports will also encourage stakeholders to invest.
“We’ll look at the zero rating for all exports, industrial parts, and special incentives to invest in particular areas. We have to look at a special fund to stimulate innovation and new businesses. We’ll have to increase grants through small and medium-sized enterprises and a lot of this has to come through entrepreneurial training.”
Ali stated that the present situation has caused many small businesses to close their operations because of the incapacity to handle shocks from a decreasing disposable income.
“Small businesses are closing down. Medium businesses are closing down. If you look at the stats, you will see that in the last three years, we’ve had G$29 billion in non-performing loans. Non-performing loans has grown by G$12 billion in three years and 60 per cent of that is in the business enterprises and most of these are the small and medium business that does not have the capital formation to withstand these shocks. You’re seeing that the disposable income of our people is being sucked up,” the Presidential Candidate explained.
