2000 POLICY ISSUES & TARGETS

In announcing the policy agenda for 2000, the Minister referred to the 1997 Elections Manifesto of the PPP-Civic policy initiatives identified by the PPP-Civic noting that the “very packed policy agenda” was set specifically to accelerate the pace of development in Guyana.

Tax Administration

The two major issues for tax administration in the last budget are once more the key tax features in the 2000 budget, but in more advanced stages of planning and implementation.

Guyana Revenue Authority

The cornerstone of tax administration - the formation of a Revenue Authority - was established on January 27,2000 as a key mechanism intended to strengthen tax administration, improve revenue collection and deliver more effective service.

Value Added Tax

A feasibility study conducted by the IMF to examine the strengths and weaknesses of the current tax system and to explore the feasibility of substituting new taxes including Value Added Tax has been completed. The Government has undertaken to consult in 2000 with stakeholders on the recommendations.

Improving the Transparency and Efficiency of the Economy

The Government identified that it would introduce far-reaching structural and regulatory reforms, the implementation of a dynamic privatisation programme and improvement to the business environment.

Structural Reforms

Tender and Procurement Reform

Discussions are currently ongoing regarding the tabling of a new Procurement Act which will address issues such as standardisation of bidding documents and a centralised management for tendering.

Privatisation and Management of Government Assets

Privatisation efforts are expected to be continued this year for Linmine, Bermine, Guyana Stores Limited, Guyana National Printers Limited and GNCB Trust. The entities are being privatised with a view to improving efficiency and productivity.

The operations of the holding company, National Industrial and Commercial Investment Limited (NICIL), will be merged with those of the Privatisation Unit (PU) but NICIL will be expected to retain responsibility for all of the government’s equity investments and properties.

Economic Infrastructure for Accelerated Growth

  • Allocation of $1.3Bn for drainage & irrigation and to construct or repair sluices, kokers, regulators and other structures.

  • Substantial works to be carried out on sea defenses in the Essequibo Coast, Bush Lot, Turkeyen and the West Coast of Demerara.

  • The Cheddi Jagan International Airport to benefit from new approach lighting, repaving the runway, and the creation of a new civil aviation authority, to ensure that the airport is in compliance with International Aviation Organisation’s standards.

  • Refurbishment and rehabilitation of ferries and ferry stellings.

  • Major roads/highways to be constructed/repaired including the Essequibo Coast Road, the Corentyne Highway and the Soesdyke/ Linden Highway.

  • Seven Hundred Million Dollars to be expended to rehabilitate section of Mabura/Lethem road and critical sections of Bartica/ Issano/ Mahdia and Black Bush Polder roads.

  • Resources have been provided for the completion of the Eccles Industrial Estate and establishing industrial estates at Lethem, New Amsterdam and Belvedere.

  • US$24M allocated to Guyana/Urban Development Scheme. The six municipalities targeted are Georgetown, New Amsterdam, Rose Hall, Corriverton, Linden, and Anna Regina.

  • $ 235 M is allocated for Poverty Interventions during the year.

Job Creation & Growth

Improving Business Climate

At the historic Business Summit President Jagdeo held with the private sector in late 1999 key issues for implementation identified were money laundering legislation, the establishment of the Revenue Authority, and the housing and funding of the Tourism Authority.

Promoting the Small Business Sector

The Institute of Private Enterprise Development (IPED) will continue to play a major role in the sector, by disbursing G$830M to 6,200 borrowers. This is aimed at helping disadvantaged youths start their own business.

Initiatives to Boost Tourism

Legislation governing the establishment and operation of the Tourism Advisory Board to be completed. The Government has allocated $20M to part finance the Board’s activities.

Social Sector Programme

Health & Education

The Health and Education sectors are to benefit from increased allocations of G$4.7Bn and $1.3Bn respectively.

Water and Sanitation

Three major integrated water systems will be completed and operationalised in Pouderoyen, Rose Hall and New Amsterdam

Housing

Twenty thousand house lots will be prepared for distribution and US $30M loan will be undertaken for a Low Income Settlement Project. One billion dollars will be spent on upgrading and regularising squatting communities, developing new sites and services for expanded house construction. An incentive is to be created for increased mortgage lending. An amendment to the Act will soon allow for NBS to accept security other than transport or certificate of title. The amendment to the Income Tax Act will allow for other financial institutions to operate like the NBS when extending mortgages to borrowers.

Pursuing Additional Debt Relief

Government will seek debt relief of US$ 322M from our bilateral and multilateral creditors.

Maintaining a Viable Macroeconomic Environment

The major concern of the economic management of the country has been the maintenance of a viable macroeconomic stance. This concern includes high and positive growth rates, single digit inflation rates, and sustainable balances of balance of payments and the Government sector. These indicators are expected to deteriorate in 2000 because of elections among others. The Government’s need for financing from commercial banks will be reduced and this will allow the private sector more access to credit.

Investing in the Priority Areas

The beginning of this new decade and century is viewed as being one of expanding the scope and impact of public expenditure in pursuit of development with a human face. 33% of the resources will be invested to stimulate growth in the economy.

Economic Targets

Growth Rate and Production Targets

Real GDP is projected to grow by a further 3% in 2000. The sectoral growths are as follows:

Agriculture

  • Sugar production is budgeted to decline by 3.4% to 310,641 tonnes.

  • Rice output is projected to grow by 0.1% to 365,500 tonnes.

  • Other crops and livestock are targeted to grow by 4.9 % and 6.5%, respectively.

  • Forestry sub sector is expected to increase by 6.1 %.

  • Fishing is expected to grow by 3 %.

Industry

  • Mining Sector, comprising primarily bauxite and gold is expected to increase by 3.2%.

  • Gold output is projected to grow by 3.4%.

  • Engineering and construction is estimated to expand by 8%.
  • Manufacturing Sector is projected at 4.5 %.

Service

  • Financial services will grow by 5.5%.

  • Other services are estimated to increase by 4.5%.

Inflation and Monetary Targets

  • Inflation is projected at 9.5 % in 2000.