A. Real Output Growth
3.0 Mr Speaker, in spite of encouraging performances in a number
of sub sectors, real Gross Domestic Product (GDP) contracted by 0.8 percent
in 2000. This rate compares unfavourably with the target of 3 percent and
the 3 percent realised in 1999.
B. Sector Performance
3.1 Mr Speaker, sugar production of 273,317
tonnes, which was achieved
in 2000, was 15 percent less than the 321,438 tonnes produced in 1999.
All estates fell short of their projected yields, especially during the
second crop. Severe weather conditions at the beginning and middle of the
year precipitated water-logging in the fields and this affected cane cultivation.
Also, the industry suffered from impaired drainage and irrigation facilities
and an attack of smut in the East Berbice area.
3.2 Rice production fell by 20.1 percent. The output of rice was
291,841 tonnes compared to 365,469 tonnes in 1999. Once again, heavy rains
led to flooding at sowing time for the first crop. This had an effect on
the second crop, when only 112,000 acres were cultivated compared to 190,000
acres in 1999. Rain also affected harvesting of the second crop.
3.3 Performance by the other sub-sectors in agriculture was mixed.
Egg production improved by 17.1 percent to 30.1 million units. This was
also the case of fresh milk, which increased by 7.8 percent to 31.4 million
litres. However, there was a decrease in poultry meat production by 5.3
percent to 11,769 tonnes. The fish sub-sector grew by 14.1 percent, on
account of significant growth in catches of prawns, 9 percent; shrimp,
10.9 percent; and fish, 16.9 percent. In forestry, output declined by 16
percent to 418,948 cubic metres.
3.4 Mr Speaker, increased production of gold, diamonds and bauxite
contributed to the overall growth rate of 5.9 percent in the mining and
quarrying sector. Gold output increased by 4.8 percent to 476,150 ounces.
This represented a recovery over 1999, when the mining of a poorer quality
of ore and the fall in international prices contributed to the decline
in output. Gold prices increased slightly in 2000. Total diamonds declared
was 83,912 carats compared to 46,668 carats in 1999. In bauxite, production
increased by 14 percent to 2,689,451 tonnes. There were noticeable increases
in all grades, in spite of the problems encountered with flooding of the
mines, obsolete machinery and equipment, and an unstable power supply.
3.5 The manufacturing sector declined by 13.9 percent. Of the four
sub-sectors within the sector, beverages and other manufacturing fell by
12 percent and 16 percent, respectively. Shortfalls in output were experienced
in ointments, 19.5 percent; footwear, 12 percent; soap, 54.5 percent; garments,
24.3 percent; and rum, 33 percent. However, increased production
was recorded for pharmaceuticals, 45.1 percent and food, 3 percent. The
commodities that experienced growth included electricity, 7.6 percent; stockfeed, 7.5 percent; margarine, 5.5 percent; corrugated cartons, 32
percent; and stout, 68 percent.
3.6 All of the sub sectors of the services sector showed positive
growth rates. Engineering and construction grew by 6.5 percent, due largely
to the expanded public sector investment programme that encompassed the
construction of schools, roads and other facilities. Distribution increased
by 5.2 percent, reflecting a recovery in the imports of consumption goods
during the year. Transport and communication grew by 5.5 percent, on account
of substantial growth in inbound and outbound telephone traffic, and increased
movement of passengers, parcels and mail. Financial services increased
by 5.5 percent, while government grew by 10 percent, principally as a result
of the large increase in wages and salaries paid in 2000.
C. Balance of Payments
3.7 Mr Speaker, in spite of the adverse international developments
that affected Guyana’s trade deficit, the overall balance of payments experienced
a turnaround from a deficit of US$4.4 million in 1999 to a surplus of US$17.1
million in 2000. This achievement was attributed to the improvement in
the capital account, which registered substantial inflows of official development
assistance and private capital. This was more than sufficient to cover
the deterioration in the current account deficit.
3.8 Merchandise exports amounted to US$505.2 million, or 3.8 percent
less than in 1999. This decrease was due to lower receipts from sugar,
rice and bauxite, even though earnings from gold, timber and other non-traditional
exports increased. In spite of an increase in the volume exported, sugar
earnings of US$118.8 million were 12.8 percent less than the previous year.
This performance was mainly a reflection of a 15 percent depreciation of
the euro against the US dollar. This caused the average export price of
sugar to fall by 14 percent, or from US$495 per tonne in 1999 to US$426
per tonne in 2000.
3.9 The volume of rice exported fell sharply by 17.5 percent. In
addition, the average export price fell from US$283 per tonne in 1999 to
US$250 per tonne in 2000. As a consequence of these two factors, earnings
from rice declined by 27.2 percent to US$51.8 million. There was a small
improvement in the volume of bauxite exported. However, lower export prices
resulted in a small decline in earnings to US$76.5 million. On the positive
side, as a result of increased prices and higher volumes exported, gold
earned 10.9 percent more than in 1999, or US$120.5 million, while timber
earnings receipts rose by 10.5 percent to US$40.9 million. Other exports
increased marginally from US$94.8 million to US$96.7 million.
3.10 Merchandise imports increased by 6.3 percent to US$585.4 million.
Intermediate goods rose by 20.7 percent, reflecting the substantial increase
in the acquisition cost of fuel and lubricants, spare parts and accessories.
Both consumption and capital goods fell by 6.1 percent and 3.0 percent,
respectively. Net services declined from US$89 million to US$78.2 million,
largely as a result of a decline in interest payments on the external debt,
while transfers improved by US$6 million to US$45 million. However, the
gains made in net services and transfers (US$17 million) could not offset
the large deterioration in the merchandise trade deficit (US$55 million).
As a result, the current account deficit of the balance of payments increased
to US$113.4 million. The capital account recorded an 81.9 percent increase,
to US$126.6 million, and this facilitated the favourable movement in the
overall balance of payments.
D. Monetary Development and Prices
1. Monetary Development
3.11 Mr Speaker, the Government’s monetary policy stance was informed
by the need for price and exchange rate stability. This led to moderate
growth in broad money of 10.9 percent in 2000. Narrow money grew by 15
percent to $24.4 billion while currency in circulation and demand deposits
expanded by 8.0 percent and 26.7 percent, respectively.
3.12 Commercial bank deposits grew by 16.4 percent, compared to 3.9
percent in 1999. This was due mainly to the higher levels of deposits by
the private sector, which grew by 12.5 percent to $69.9 billion. Deposits
of the public sector were 25.8 percent higher than the $7.3 billion recorded
in 1999, and facilitated the expansion in commercial banks’ investment.
Net domestic credit rose by 6.4 percent to $25.4 billion, with the public
sector maintaining its net depositor position.
3.13 In spite of the very cautious approach that has been adopted
by the commercial banking system, credit to the private sector expanded
by 5.2 percent. Real estate mortgages recorded a phenomenal growth of 35.6
percent, on account of the upsurge in housing construction and repairs.
Credit to the agricultural sector rose by 7.3 percent, reversing the decline
of 9.9 percent in 1999. Similarly, credit to the services sector increased
by 7.1 percent, reflecting higher lending for transportation and communication
as well as entertainment and catering. Credit to the manufacturing sector
increased by 3.7 percent while credit to the distribution sector grew by
3.14 The overall expansion in the monetary base was a reflection
of growth in the foreign reserves. Gross international reserves rose by
US$29 million to US$295.8 million. This was equivalent to 4.8 months of
coverage of imports, up from 4.2 months in 1999.
3.15 Mr Speaker, inflation slowed to 5.9 percent in 2000. This result
compares favourably to the target of 9.5 percent and the 8.6 percent recorded
in 1999. This achievement is a tribute to the Government’s determination
to keep the cost of living down, especially in light of the huge increases
in the international prices of fuel and lubricants. Given the importance
of fuel to the economy and the likely impact the increases would have had
on economic activity, the Government intervened on three occasions in 2000
to reduce, temporarily, the applicable rate of consumption tax. Currently,
the tax on gasolene stands at 35 percent, down from 50 percent, while that
for dieselene is 20 percent, also down from 50 percent. The Government
had previously removed the consumption tax on kerosene for domestic use,
and had lowered the tax on Av gas and Av jet that are used in aircraft
plying the coastal and hinterland areas.
3.16 Mr Speaker, the price of fuel is expected to remain high for
the foreseeable future. In recognition of this, the Government has been
exploring short-term solutions that involve the acquisition of fuel at
a cheaper price. In this regard, it is exploring importation under the
Caracas Energy Accord. Other initiatives being pursued include an examination
of options for use of alternative fuels and an energy conservation programme
by the Guyana Energy Agency (GEA).
b. Interest Rates
3.17 Mr Speaker, after peaking in March 2000 the 91-day Treasury
Bill rate declined continuously to its lowest point in November, before
settling at 9.2 percent at the end of the year. This trend precipitated
the downward movement in the savings and lending rates. The ‘small savings’
rate declined by 69 basis points to 7.28 percent, the annual average savings
rate declined by 10 basis points to 7.65 percent, and the weighted average
time deposit rate declined by 194 basis points to 7.51 percent. The weighted
average lending rate decreased by a mere 19 basis points to 17.68 percent,
thus widening the spreads between the savings and lending rates. Mr Speaker,
we have commented, ad nauseam, on the relatively high interest rate spreads
and we will continue to maintain an activist role in our quest to have
c. Foreign Exchange Rate and Volume
3.18 The Guyana dollar depreciated by a negligible 2 percent against
the United States dollar in 2000, compared to 7.7 percent in the previous
year. Recorded transactions in the foreign currency market amounted to
US$1.7 billion, 5.8 percent higher than in 1999. Transactions in the cambio
market declined by 4 percent to US$822.4 million. At the close of the year,
the US$/Guyana dollar mid exchange rate was G$185.54.
d. Wage Rate
3.19 The wages and salaries of all categories of workers in the
public service, as well as pension and social security assistance, were
increased by 26.66 percent. As a result, the minimum wage in the public
service increased from $15,000 to $19,000 per month.
E. Review of the Non-Financial Public Sector
1. Central Government
3.20 Mr Speaker, in spite of the contraction in the economy, the
operations of the Central Government improved significantly during 2000.
Through a combination of higher oil prices, the introduction of a flexible
customs valuation rate, and improved tax collection by the Guyana Revenue
Authority, current revenue rose sharply by 12.2 percent to $41.3 billion.
The Internal Revenue Department garnered $18.9 billion, compared to $16
billion in 1999. The main contributors to this effort were collections
of personal income tax of $7.8 billion ($6.2 billion in 1999); and company
taxes of $7.1 billion ($6.3 billion in 1999). Similarly, collections by
the Customs and Trade Administration Department reached $19.1 billion or
21 percent more than the previous year. Consumption tax on goods and services
accounted for 78 percent of the amount collected. In terms of the ‘other
current revenue’, profits from Bank of Guyana amounted to $386 million,
while the telephone company paid a dividend of $288 million, the first
time that such transfers were made to the Government.
3.21 On the expenditure side, non-interest current expenditure amounted
to $30.6 billion in 2000, about 25 percent more than in the previous year.
Personal emoluments grew by 19.1 percent to $14.3 billion, and consumed
34.6 percent of the revenue collected. This significant growth in workers’
income was a reflection of the large wage increase and the severance payment
to security guards towards the end of the year. Expenditure on ‘other goods
and services’ increased by 17.1 percent to $8.2 billion, while that for
‘transfer payments’ grew by 48.2 percent to $8 billion.
3.22 Mr Speaker, when compared to the budget, these results made
possible a 30.2 percent improvement in the primary current balance to $10.8
billion. Interest payments were $12.4 billion, an increase of about $2.4
billion. External interest (on an accrual basis) amounted to $7.3 billion,
13.1 percent higher than the previous year, while domestic interest of
$5.1 billion was 45.7 percent more than in 1999.
3.23 Capital expenditure and net lending increased to $17 billion,
$2.4 billion more than the target and $4.7 billion more than in 1999. This
performance was attributed to an improvement in the disbursement of external
loans and the removal of some of the bottlenecks that affect the rate of
project implementation. Included in net lending is an amount of $1.2 billion
that was transferred to Linmine. This is a reflection of the Government’s
commitment to support the company until its privatisation.
3.24 Mr Speaker, total expenditure (net of principal repayment and
rice levy) was $59.9 billion compared to $46.7 billion in 1999. The overall
deficit before grants was $18.6 billion, which, though slightly less than
the $19.1 billion that was budgeted, was almost twice the $9.9 billion
recorded in the previous year. Grants, comprising HIPC relief ($5.6 billion);
project grants ($1.3 billion); and non-project grants ($3.1 billion), increased
by 36.5 percent. The overall deficit after grants amounted to $8.5 billion.
This deficit was financed largely through net external borrowing of $7.8
billion. The large disbursement of project and balance of payments loans
and the HIPC debt relief enabled the Government to lower its liabilities
with and make repayments to the banking system.
2. Public Enterprises
3.25 Mr Speaker, owing to a combination of adverse circumstances,
the operations of the public enterprises deteriorated in 2000. Total receipts
of $45.5 billion fell short of the budget by 7.8 percent. This performance
was attributed to problems encountered in the key enterprises. Production
in the bauxite industry was hampered by irregular power supply and a lack
of suitable barges; sugar suffered from the effects of bad weather and
an adverse euro/US exchange rate; and contributions to the National Insurance
Scheme were less than targeted. However, both the state oil and shipping
companies returned commendable performances, but these were insufficient
to cover the shortfall.
3.26 Non-interest expenditure amounted to $42.3 billion, about the
same as was budgeted. This was due mainly to the increased acquisition
cost of fuels and materials and supplies. The net result of the lower receipts
and higher expenditure was a decline in the current surplus to $3.1 billion,
from about $4 billion in 1999. Capital expenditure amounted to $2.1 billion
while taxes and dividends paid were $767.7 million. The overall cash balance
of the corporations improved by 245 percent to $975.2 million.
3. Non-Financial Public Sector
3.27 Arising from the developments in the operations of the Central
Government and the Public Enterprises, the current surplus of the non-financial
public sector fell to $1.5 billion, from $6.6 billion in 1999. At the same
time, the overall deficit after grants increased to $6.3 billion, from
$957.3 million in the previous year.
F. Public Sector Investment Programme
3.28 Mr Speaker, we were able to achieve a 91 percent implementation
rate for the Public Sector Investment Programme (PSIP). This helped
to transform the social and physical landscape of our country. I shall
now review some of the achievements in the priority areas as identified
in last year’s budget.
3.29 In the health sector, approximately $139 million was spent on
rehabilitation works at the Ministry of Health. In addition, a new elevator
was procured for the Maternity Ward of the Georgetown Hospital. The Agricola
Health Centre, the Tuberculosis Ward, the Nursing School and the Pharmacy
Bond buildings were renovated, while more than sixty percent of the work
on the Liliendaal Training Centre building was completed. Health facilities
in New Amsterdam and West Demerara were renovated and a sanitary block
was constructed at the facility in Suddie. Health posts at locations such
as Hotoquai, Aruka, Hosororo, Capoey, Aurora, Richmond in Leguan, Kamana, Itabac,
Kopinang, Yakarinta, Katoka, Tupunau, Great Falls and Malali were
either constructed or refurbished. Medex and nurses’ quarters were constructed
at Baramita, Mora Point, Enachu and Sand Creek, and an X-ray room was built
at Port Mourant.
3.30 In the education sector, the expansion of technical and tertiary
education was further enhanced with the construction of a new Technical
Institute in Essequibo and the completion and opening of the Berbice Campus
of the University of Guyana. The third phase of the National Library
was completed and the new wing was formally inaugurated. Several nursery,
primary and secondary schools were refurbished and some new ones, for example,
at Beterverwagting and Plaisance, were constructed. The St. Margaret’s
Primary School and the Queenstown Primary School in Regions 4 and 2, respectively,
were also completed. Another seven schools were completed in Regions 3
and 4 while the construction of twelve schools was started in Regions 4,
5, 6, and 10. The rehabilitation of an additional thirteen schools under
the Primary Education Improvement Project commenced.
3.31 In addition, twelve schools were refurbished under Phase 2 of
the Secondary School Reform Project. These were Cotton Field Secondary,
L’Adventure Secondary, Fort Wellington Secondary, Vryman’s Erven Secondary,
Belladrum Secondary, Uitvlugt Secondary, New Campbellville Secondary, Dolphin
Secondary, Tucville Secondary, Manchester Secondary, Mc Kenzie High and
Annandale Secondary. Also, it was during this period that the Stewartville
Secondary School was completed.
3.32 Mr. Speaker, we did not invest only in the physical infrastructure
in education. In fact, much of the investment in this sector was
focused on improving the quality of education. To this end, teacher training
and learning strategies, testing and assessment, textbook development,
library and laboratory facilities, and curriculum reform facilitated an
improved learning experience. Most important, for the first time
in Guyana, the teaching of Information Technology was introduced into the
primary and secondary school system.
3.33 In the third priority area, water and sanitation, the Georgetown
Sewerage and Water Commissioners supplied and installed water metres in
Lamaha Gardens, Prashad Nagar, Alberttown, Queenstown, Kingston, Bourda,
Bel Air Park, and the eastern sections of North and South Ruimveldt.
One well was drilled in Tucville, bringing relief to the residents of Tucville,
La Penitence, Lamaha Park, and Meadow Brook Gardens. Some residents
of North and South Ruimveldt also benefitted from a water distribution
system that was installed during this period. The drive to provide potable
water to every home and to every Guyanese, whether on the coastland, riverain
communities or the hinterland region, continued with the installation of
integrated water systems at Pouderoyen, New Amsterdam and Rose Hall. Numerous
stand-alone hand-pumps, windmills and other generation facilities throughout
the riverain and hinterland areas were provided.
3.34 Mr. Speaker, nearly 22,500 house lots were distributed and 22
new housing schemes were established last year. Further, 5,472 land titles
were granted and 62 squatter settlements were regularised in the more densely
populated areas of Regions 3, 4 and 6. In Region 3, fourteen squatter
settlements in Tuschen, Zeelugt Scheme, Meten-Meer-Zorg and Crane, were
reorganised and upgraded. In Region 4, twenty-eight areas, including
Sophia, Block 2 Enterprise, and Enmore/Hope. In Region 6, twenty settlement
schemes were completed. In addition, about 76 miles of road were either
built or upgraded and 75 miles of pipelines were laid in these areas.
Housing schemes were also developed in a number of areas.
3.35 In agriculture, investment focused on upgrading farm to market
roads in several areas, including Nos. 70 and 71 Villages, Mahaicony River,
De Hoop Branch Road, Charity/Supenaam, Coglan Dam, Windsor Forest and Parika
Back Dam. In addition to massive improvements in the drainage and irrigation
infrastructure, especially along the coastal belt, works were also undertaken
in Regions 3, 4, 5, and 6. Specifically, 200 miles of canals were maintained
in Cane Grove, Ann’s Grove, Clonbrook, Two Friends, Beehive, Nabacalis,
Plaisance, Belfield, Mon Repos, Buxton/Friendship, Beterverwagting, Triumph,
Garden of Eden, Craig, Canals Nos. 1 and 2, Windsor Forest, Den Amstel,
Parika, Liverpool, Nos. 52 – 74 Villages, and Black Bush Polder. Thirty-four
miles of conservancy embankment from Nancy to Madewini were constructed.
Three sluices were constructed – one at Georgia and two at Canals No. 1
and 2 Polder. Additionally, 12 sluices were rehabilitated in areas
such as La Retraite, Hope, Essex, Nos. 65, 67, and 73, and Unity.
3.36 At the same time, numerous feeder and community access roads
either were upgraded, constructed and/or re-constructed. Our roads
rehabilitation programme has positively affected residents in communities
such as Nurney, Mara and Whim in Region 6; Champagne, Bath and Bush Lot
in Region 5; Buxton, Enmore and Peter’s Hall in Region 4; and Harlem, Windsor
Forest and Pouderoyen in Region 3. More than $2 billion was spent on road
rehabilitation and construction works in Regions 2, 4, and 10. The
stretch of road from Anna Regina to Hampton Court was completed. The Main
Road Rehabilitation Programme, Lot 2 - from Georgetown to Mahaica - was
completed in 2000. Work on the Linden/Soesdyke Highway was completed. The
project was extended to include Burnham Drive, the road to Christianburg
cemetery, and the One Mile/Wisroc Road in Linden. Maintenance work
was carried out on the West Berbice, East Bank Demerara and West Coast
Demerara main Roads. In the City, work was completed on streets in Kingston,
Cummingsburg, Campbellville, West Ruimveldt and Tucville.
G. Review of the 2000 Policy Agenda
3.37 Mr Speaker, in spite of the difficulties encountered on the
domestic and international fronts, the Government continued the task of
moving the economy forward in 2000, and, in this regard, was able to realise
success in the implementation of policies and programmes.
1. Commitments from the Government/Private Sector Engagement
3.38 Progress was made in the implementation of the commitments made
at the conclusion of the historic business summit between the Government
and the private sector, in October 1999:
In the case of the establishment of a development bank,
a concept paper was developed by the Guyana Manufacturers’ Association (GMA) and submitted to the Government. Subsequently, in September, a memorandum
of understanding was signed between the GMA and Development Finance Limited
of Trinidad and Tobago to establish a development bank in Guyana. Once
operational, this bank would be an important source of financing for small
and medium-sized enterprises in manufacturing, commercial and industrial
services, agro-industry, private health care facilities, and tourism. The
Government has already signaled its intention to provide the necessary
incentives to the bank.
With respect to housing and funding the Tourism Authority,
a building was identified and approaches made to obtain financing for its
rehabilitation. A subvention of $20 million was provided in the Budget,
in anticipation of the start-up of the Authority. However, the legislation
establishing the Authority was delayed because of the heavy legislative
agenda, in particular those related to Constitutional Reform.
On the subject of the decentralisation of land administration,
the Act establishing the Guyana Surveys and Lands Commission, as an autonomous
body, was passed and technical assistance was provided by the United Kingdom
to help operationalise the agency. The new entity, which will be responsible
for land management, land use planning and information systems, came into
effect on June 1, 2001.
With respect to tax administration and reform, the Guyana
Revenue Authority started operations in January 2000, while the study on
value added tax (VAT) was circulated to the private sector. A seminar to
expose the public to the VAT and its application was held two days ago.
A Small Business Development Act has been drafted and after
consultations, it will be tabled in the National Assembly.
2. Debt Reduction and Management
3.39 Mr Speaker, after intense negotiations, the Boards of the International
Monetary Fund (IMF) and the World Bank approved the Interim Poverty Reduction
Strategy Paper (IPRSP) and the second year annual arrangement under the
Poverty Reduction and Growth Facility (PRGF), in November 2000.
3.40 The approval of the second year programme resulted in the immediate
release of US$9 million in balance of payments assistance. Also, it served
as an important benchmark for the consideration of Guyana for the Enhanced
Highly Indebted Poor Countries’ (E-HIPC) initiative. In this regard, Guyana
reached the decision point of the E-HIPC initiative, becoming only the
second country in Latin America and the Caribbean to be so considered.
This means that Guyana stands to benefit from debt relief of US$590 million
over the next 20 years. This is in addition to the US$440 million that
was secured under the Original HIPC initiative. The Government is working
with the international donor community and a wide cross section of Guyanese,
through broad-based consultations, to fulfill all the conditions necessary
to reach the completion point.
3.41 Mr Speaker, mindful of the increased access to, and utilisation
of, foreign sources of financing by the private sector, the Government
hosted the first Sensitisation and Private Sector External Debt Workshop,
in February 2000. This workshop formed part of a capacity-building programme
for the efficient management of the country’s debt. It sought to build
on previous initiatives, such as the National Debt Strategy Consultations,
in September 1999, to strengthen cooperation between the public and private
sectors in monitoring private capital flows and private sector external
3. Privatisation and Public Sector Reform
3.42 The Government completed the sale of 70 percent of Guyana Stores
Limited. In October, a contract was executed with a Chinese company for
the leasing of the dyeing and printing sections of Sanata Textiles Limited.
The company will be investing about US$10 million in the new entity. Also,
the point of sale for 90 percent of the shares of GNCB Trust was achieved.
Further, the valuation of GNCB prior to its eventual sale was completed.
In addition, several properties were advertised and sold during the year,
in the process netting over $370 million. Work has started on the creation
of a national assets register.
3.43 In the area of public sector reform, the Government completed
a major exercise in its on-going efforts to outsource those services that
can be competitively provided by the private sector. In this context, the
services of nearly 1500 security guards were severed. They received severance
payment that was in excess of the legal requirement and all superannuation
benefits due to them. The unions representing the guards formed a new security
and domestic services company that was contracted by the Government.
3.44 Also, Mr Speaker, the second phase of the computerisation of
the Government Payroll and Pension Systems was completed. So far, 75 percent
or 35,000 monthly-paid employees have been captured on the new Payroll
System. The Government intends to expand this project to include all weekly
and fortnightly-paid workers.
3.45 Mr Speaker, the modernised Pension System now facilitates the
speedy processing of over 7000 Government pensioners. Other reforms in
financial management that were pursued included the initiation of the second
phase of the CIDA-financed Guyana Economic Management Project (GEMP); and
the implementation of a data warehouse to facilitate macroeconomic forecasting
and human resource analysis for public service management.
4. Institutional Developments in the Financial Sector
3.46 The Government continued with its plans to build institutional
capacity in the financial sector. Among the actions taken in 2000 were
the enactment of the Money Laundering Prevention Bill No. 10 of 1998, whose
intention is the prevention of money laundering and related activities;
and the passage of the New Building Society Amendment Bill, which is intended
to provide easier access to mortgage financing. Together with the Income
Tax (Amendment) Act 2000, which provides for lower tax rates to financial
institutions that grant mortgages, these measures would have a positive
effect on the housing drive. An agreement to establish the first Merchant
Bank was signed in June.