Budget Debate 2013
3383 09 Apr, 2013
Mr. Hinds: I join my colleagues in commending and congratulating the Hon. Minister of Finance and his team of public servants in the Ministry of Finance, and indeed all public servants all across the Government, in taking part in and crafting this year’s budget and the series of budgets which will follow.
In paragraph 1.7 of his budget speech the Minister of Finance related… I will quote the whole paragraph as I find it germane and on embodiment of our PPP and PPP/C approach:
“Mr. Speaker, bolstered by our unswerving commitment to task, our Government ensured the preservation of a policy environment that remained conducive to economic growth and social development throughout 2012. The result was a seventh consecutive year of real growth in our economy and associated strong macroeconomic performance, continued diversification of the productive sector, substantial progress on catalytic infrastructural projects, further strengthening of our social services, and visible improvements in our regulatory and institutional environment.”
I think that paragraph is a very sound one and it states a lot. Our commitment to the task preserving a policy environment that remains conducive to economic growth and social development does not just happen, it needs the right circumstances to bring it about. The result was a seventh consecutive year of real growth in our economy, associated with strong macroeconomic performance. I know that many people get upset with that term and our focus on macroeconomic performance, but with the loss of macroeconomic performance, inflation, which we had throughout, from about soon after independence right through to the 1990s, was what made beggars and poor people of a lot of public servants, people who worked for money wages. That was what caused many of them in their old age to be receiving pensions of $300 per month.
There was the focus on “…the continued diversification of the productive sector, substantial progress on catalytic infrastructural projects, further strengthening of our social services, and visible improvements…”, not perfection, but improvements, visible, real improvements “…in our regulatory and institutional environment.” I think that more or less puts it all, for me, in a nutshell.
All of us, Guyanese, can and should feel some satisfaction and sense of reward in that our work has brought us a seven successive year of real growth. It is not that we have not had years of growth before. We have had, but we have been fluctuating. Seven consecutive years of growth emanates what is happening globally in our region, and even locally, should grab our attention. As it was said that we have been doing something right and something good, and that we might be well getting on track to realise the dreams of our present and past generations.
Growth and development, a steadily more prosperous living and comfortable life becoming a modern state is what we, Guyanese, have been longing for and dreaming for, but how do we achieve that? What can we learn from the history of the already developed countries? It has been said many times, and it is true, that the growth and development, for which we worked to afford ourselves a more prosperous and comfortable living, is a process, not an event. It is not a process of a year or two, but a process of many decades.
The two Hon. Members sitting across the aisle from me, the Hon. Leader of the Opposition, (Ret’d) Brigadier David Granger and the Hon. Member Dr. Rupert Roopnarine, like me, attended secondary school before independence and sat the English examinations. We took the history course of the then O’level, General Certificate of Education (GCE) exams, modern Britain. It made a profound impression on me, as it was related to how Britain was transformed into modern Britain from about the year 1700 onto about the 1950. It covered that period. I was impressed not only because of the great teacher we had, Mr. Robert ‘Bobby’ Moore, but because of some corresponding situations which I could have sensed between Britain in 1700 and my rural life in the countryside in Mahaicony in the 1950s.
Animal power, oxen, daheen and bow were still common amongst us as they were in Britain in 1700. At first, individual properties in the villages of eastern Mahaicony were not fenced and there were families without any land of their own who reared animals, let loose to graze on the common pasture. I was around then in the 1950s when some persons began fencing their lands. Maybe, they got some money then and they had begun to fence their lands. It broke up the common pasture. Much of the same thing was happening in England in 1700 and much the same effects that was happening at that time, during the period of enclosure.
Today, in many places all across Guyana, as we hear arguments between livestock rearers and farmers, we should recognise that the resolving of some of the issues of enclosures is still with us, but here I saw a parallel in some of the things that were happening in Guyana in 1950 which were occurring in Britain in 1700.
I might have been left with the impression that the process of modernisation was one of 250 years or more, but then in time we recognised the Asian tigers, Japan, Taiwan, South Korea, Singapore, Malaysia and very noticeably, more recently, China and India, transforming themselves in a major way in about 50 or 60 years.
My honourable colleagues, Mr. Granger and Dr. Roopnarine, could hardly differ with me that as youths leaving high schools, in the first half of the 1960s, we would have considered, and would have considered ourselves, Guyana alongside, if not ahead, of Malaysia, Singapore, India, as taken as a whole, and China. We who were 20 years old youth then looked forward to the coming independence and the rapid modernisation. Things did not turn out the way my generation hoped. It is not the case that we did not worked; we did not dream; we did not applied ourselves. I would not argue that any of us was not well intended. Those things do not make the difference. Well intention, good intention, is okay.
There is the history of our country’s growth and development over the years, from the late 1950s to today and I would argue, with the greatest of respect for the efforts of everyone, that the records would show that steady growth and development have been more likely when the PPP and the PPP/C were and is in office. In the periods of 1957 and 1964 and in the period since 1992 the PPP and the PPP/C have been the better servants, the better stewards, of the economy brining material benefit to all the people of Guyana. That is historical facts.
It is with such a background that I support our Budget 2013 hoping that Guyana will this time around stay on the course of steady increase in growth and development so that the young people, the 20 years olds of today, the youths of today, in their lifetime, in 50 or 60 years from now, will find the work of all of us blessed with Guyana catching up with and drawing abreast of the already developed countries. My hope is that the 20 years old youths of today will see Guyana becoming a modern developed State. It would not happen just so, it will be the product of the work of our hearts and hands and heads.
Growth and development do not come smoothly, but being full of change and transformation they are also full of potential for conflict; the greater the rate of growth and development the greater the potential for conflict. More so, in a country in which people are thrown together, whose forefathers were thrown together, as ours were. I am ready to argue, again, with the greatest of respect for other opinion that the historical records of the formation of the Public Accounts Committee, the PPP critical support to Mr. Burnham and the PNC, the formation of the PPP/C in 1990 would have shown that our party has always been conscious of how our fore parents were thrown together and the lengths to which we need to go to work for harmony and to avoid violent conflict breaking out at every term. That harmony has been prevailing for more of our history is testament to the efforts made on all sides by all our people to achieve and maintain harmony.
We have been aware too that the growth and development often involve moving from one stage to another stage, from one type of organisation to another. The challenge is not to move too early nor too late. We are aware that all are involved and that there is much for us to learn. Our annual budget is crafted with a sense of being and annual review of our journey to better days, better times not only plotting the path forward, but also creating that path. This has been how our budgets have been crafted; continually aware of needs, dangers and opportunities all around and most of all I think the thing that the PPP and the PPP/C has been faithful to was the need for financial discipline and it an issue that we questioned when we hear the proposals for reduction in taxes and at the same time increases in benefits – financial disciplines.
I recall the last speaker before me talking about people who were made to be bad Johns. I think our history would show that because of our concern and commitment to financial discipline, we have been made out to be the bad Johns. It is The Government Members who have been made out to be the bad Johns - the people who do not want to give the pensioners $15,000; the people who do not want to give public servants 10% and more than 15% increase; the people who do not want to do this; the people who do not want to cut the Value Added Tax (VAT). We are made out to be the bad Johns. It calls for a great sense of purpose and commitment to a country to persevere in the discipline that has brought this seven-year period of successive growth.
Our sense of responsibility as the country’s stewards in office in service to the people of Guyana, coupled with our economic history engender a strong sense of earnest responsibility and I would even dare say maybe it makes it difficult for us to rush into, maybe, accepting many of the proposals that are put before us.
There has been much talk about the need for not just shared governance, but even shared government. The President, it has been suggested, should have looked around and made a Cabinet of persons from all parties. This is certainly appealing. It is certainly an ideal. Who could speak out against it? Who may dare to speak out against it? No doubt these calls were well intended, but there are major dangers and unanswered questions in this sort of shared government. Indeed, Sir, the late President Hoyte, I think, argued quite profoundly against shared government before he eventually gave in to the opposite arguments in the People’s National Congress (PNC). It is not for me now to go into them, but we can go back and check them in the media of the day and the discussions of the day.
Shared governance, shared responsibility, is not beyond us who offered critical support to Mr. Burnham and the PNC, even as opposed to critical exposure at a time when we of the People’s Progressive Party (PPP) were being cheated and abused...but also a time when we put Guyana first. We put Guyana before that.
We do not think shared governance in the sense of shared Ministries is the critical thing for Guyana. It is not the thing for Guyana and not the critical thing. There are real differences in views, in approaches, and in results among our different parties. I spoke just now to one, the difficulties with financial discipline. That is a big difference among our parties. There are others. We, as I said, from time to time, are more of the rural type. There have been many stories, Aesop’s fables and so on, about the difference between the country mouse and the city mouse. I think that we of the PPP/C, if I may be bold to say so, have much more correlation with us and the behaviour of the behaviour of the country mouse than with the city mouse. We are more practical and down to earth, maybe even, I would say, Sir, people with their feet in the mud. So there are real differences among our parties.
Democracy is promised on the working out of different views or working in the presence of different views even as these views ever arise, particularly as we grow and develop. We see as more important, indeed as a first step, the development of trust, an atmosphere in which we all can live under the Guyana umbrella, aware of our differences, yet extending and accepting hands of assistance from each other and ready to learn from and teach each other. We of the PPP/C are afraid that shared government may just mean a shifting of the contentions and abuse in this House to the Cabinet room. Just imagine a Cabinet that is performing in the same way or with the same relations as we have been having here in this House.
I also think that a forcing of shared government would easily return us to the 1950s when, with our differences, some explicit and some implicit, some obvious and some unrecognised, there would likely occur again, situations and events which let loose feelings of betrayal, ungratefulness and such like.
For the sake of 20-year olds of today, we do not want a repeat of that history. The risk is still too great. I join a colleague on this side who spoke before me in tabling again and putting before us again our proposals for building trust for political co-operation, which we tabled in 2003. We think that that is the way forward.
Much has been said about our PPP/C reluctance, even aversion to engage and trust. We of the PPP and the PPP/C have been burnt. Even during the last Budget, in the engagement to begin a reform of the provision of electricity in Linden, we have been burnt. That was a pretty painful, but limited experience.
A more pervading, painful experience was referred to recently by one of our country’s socio-political commentators, Dr. Henry Jeffrey, in his article “Future notes” of Wednesday, 3rd April, in the Seabrook News. He referred to the agreement to use national Identification (ID) cards for identification in our 1997 Elections and the subsequent ruling of that Election as null and void without protests from the other parties in that agreement. Allow me to quote from a paragraph and a half of Dr. Jeffrey’s article, as it is relevant to a point made by Hon. Member Mr. Greenidge in his presentation on last Tuesday, 2nd April. Maybe let me first go to Mr. Greenidge’s statement from this unofficial transcript which I have received. Mr. Greenidge, we may recall, said words to the effect, pretty early in his presentation:
“…those studies included one prepared by the World Bank and published in 2003 argued (amongst other things) that the declines in Guyana’s economic growth between 1998 and 2004 were partly due to the less favourable political and institutional environment after 1997.”
You see, we had that agreement during the 1997 Elections. Mr. Speaker and Hon. Members, you would recall the events running up to the Elections at the end of 1997 and the events thereafter.
Let us now go to “Future notes” of political scientist and commentator, Dr. Henry Jeffrey, which also speaks to the Elections of 1997 and the following years. I quote:
“Before the 1997 Elections, the two parties agreed that voters could use their normal ID cards to cast their ballots. Yet after the Elections the PNC moved to the Courts claiming that the Elections were rigged and thus null and void. The Court concluded that the Elections were not rigged, but vitiated Ms. Jagan’s presidency on the ground that it was illegal for the parties to have colluded in requiring voters to have to show their normal ID cards before casting their ballots.
If anything, this decision gave greater fillip to the PNC protest and after the 2001 Elections, which it clearly lost, the party took to the streets again and boycotted Parliament.”
What is wrong with that? This is someone who is calling for shared ministers from all parties in a Cabinet when this sort of behaviour has not been cleared. We have not heard a word about it. The sheet has to be cleared before we could move forward.
I would argue too that just like how the Court said that that year the PPP and the PNC colluded, I would say that there is danger also in coming together in a Cabinet of Ministers. We could find ourselves being guilty of collusion just the same as then.
These were the circumstances of our country’s fluctuating GDP performance from 1997 to about 2004. I would say, let us recall what was happening. Let us recall all the marches, making Guyana ungovernable and fire and more fire. That was the situation. That was the situation in which we had some years of growth and some years of no growth.
It was in those circumstances, in the face of contrived mayhem, that we of the PPP/C agreed to hold elections early, two years early in 2001, a sacrifice. So, when people talk about who has sacrificed and who loves Guyana and has made sacrifices, it is the PPP/C who historically has been making the sacrifices. We have been making the sacrifices. This seven-year period of steady growth from 2006 is a reward and gift, not only to us of the PPP/C, but to all of us Guyanese. It is a reward for us, keeping Guyana together and accepting a two year cut. We have made sacrifices in all areas.
I would say that we are not going to not share this sacrifice and take it all for ourselves. We know that that the other people have their feelings too. This is what I pointed out, that we cannot just run and get into a government of all the parties. It is that we have to take it step by step and get back to our proposal of creating trust for political cooperation. That is what we have to get. We have to have some instances where the other side delivers on its commitments too. We have to have enough instances. We have to persuade our supporters that we can get into agreements with the people on the other side.
We have all paid greatly to get this seven-year run of continuous growth. We must cherish it and build on it.
If, Mr. Speaker, there are to be any fares or claims by any Guyanese group that others have sought to dominate them, no one has better grounds to put such a case than we of the PPP and the PPP/C. We are not complaining. We have not been daunted. We have not been losing time in complaining. We have been continuing to work as best as we could to steer our country through and away from those troubled and troubling waters. We have not sought to evade awareness of our social, ethnic and political challenges, but we have put our position paper, ‘Creating Trust for Political Corporation’. Some may say that we are being cautious and we are not daring enough. Perhaps, that is how we, the PPP and the PPP/C, are - cautious, careful and concerned people.
Mr. Speaker and Hon. Members, our Budget is crafted pertained to studies of sustainable progress, a step-by-step approach to our dreams. Our annual Budgets enable our next steps on the decades-long journey to a developed state. So, we have here the next steps in a continuing journey year to year.
I assure the Hon. Member, Mr. Carl Greenidge, that there has been nothing like a lack of attention to poverty alleviation, nor has the so-called National Competitiveness Strategy, as Mr. Greenidge puts it, taken emphasis away from issues of poverty alleviation. This comment shows that a lot of our people are still ambiguous. They have not taken the time to resolve contradictions or they have not accepted contradictions. He is putting opposite each other the attention to poverty and poverty alleviation and this so-called National Competitiveness Strategy. The aim in life is that one has to learn to live with his or her contradictions, the different pressures all around. In fact, maybe from our schooling back in those days, we learned that things are held fairly stable with many competing forces on it, not just one or two. That is something that I think we of the PPP and the PPP/C have always been able to handle better, to live with the various contradictions that we find in life.
The Hon. Member should, however, be familiar with the story of giving a poor man a fish and feed him for today, but teach him to fish and you feed him for a lifetime. In this Budget, we are seeking to do both. We are doing both within our present means, providing assistance today and teaching and facilitating successful competitive, self-sustaining livelihood in the future. We are doing both, giving a fish and teaching how to fish. How are poor people to overcome poverty and step onto the ladder of rising prosperity? Poverty is to be overcome by creating opportunities, opening doors and equipping the poor to be working and working ever more productively. That is what we are doing. That is what we are doing in the various measures in our Budgets. This is the consistent overarching principle running through our Budgets and all that we do. That is the way people are set free and empowered. You leaders of APNU and the AFC must encourage the people who look to you for leadership to participate, not to stand on the sideline, but to put their hands, hearts and heads to any work that comes their way today until they find the work they want. That is what we all do when we go to North America. We put our hands, our hearts and our heads to whatever work we could find until the day we could find the work we want.
We of the PPP/C are proud and, I think, all of us Guyanese are proud of and celebrate our per capita GDP that is today US$3,148 in nominal terms, compared with less than US$300 in 1992. That is good news, but, at the same time, we are aware that a number of our neighbours around us are up to US$10,000 and developed countries are up to US$30,000 and $50,000. We have graduated out of the least developed countries and Heavily Indebted Poor Countries (HIPC) and we should all note that less grants and soft money now come our way.
We have not abandoned the poor programmes as Mr. Greenidge accuses us of, which the funding agency started. We have been aware that growth and development do not come smoothly. The saying is that there are always winners and losers, some who happen to be in the right positions are swept up by the rising tide before others. A widening spread in standard of living is a real danger of growth and development. We have continued the poverty amelioration programmes, some virtually unchanged and others with adaptation. I hope I am correct about the School Feeding Programme, the Uniforms Assistance Programme and such like.
Hon Member Mr. Greenidge referred to a number of things which were tabled during the discussions we had which surrounded the Budget last year. Allow me to address some of them. Hon. Member Greenidge’s assertion that the Value-Added Tax (VAT) is a regressive tax that hits the poor most heavily might have been applicable if we had implemented VAT in its pure form as we were being pressed to do. I was there also when the pressure was coming on from the consultants and all the institutions to have a pure form of VAT. We refused. Mr. Greenidge might be right were there not the basic items zero-rated and exempted freed from VAT. The meeting spoke about, and we have opened to, extending the list of basic items. We note some people who argued, too, about from time to time even the poor may want to splurge once or twice or year and that we should take VAT off of those things so that the poor’s once or twice a year splurge...but which better off citizens consume dozens of times a year. Here is where discipline and maybe looking like a Bad John comes in, because we are holding to the position that if the poor splurges once or twice per year, they will have to step up and pay the VAT on those items. Other people are using those items consistently, maybe dozens of times per year. That is the kind of differences that comes up in our approaches and our programmes and what we do.
We maintain that lowering the VAT rate the way we have implemented VAT would be to the benefit of our better off fellow citizens. We would have nothing against our better off fellow citizens. We just think that we are all together and those who have a bit more have a right to put a bit more in the pot and take out a bit less than others. It is not something to condemn them or harm them or chastise them for. It is just calling on them to step up to the plate and be a Guyanese, contributing to others.
The Hon. Member, Mr. Greenidge, spent a lot of time on the constitutional bodies, the way the budgets are to be set and the procedures of financing. Hon. Member Greenidge has demanded that these Estimates come to us differently and be differently presented. I would repeat, as we have been maintaining, and I could not improve on the Minister of Finance here, that the Estimates are being presented as they have been presented traditionally. When discretions were tabled in the Budget discussions last year, the Government side pointed to the constitutional amendments which would be required, but more so I think this matter may need some full consideration.
Over the year, there have been presentations which show a range of interpretations and expectations about how the quantities of money for the constitutional bodies will be set. There is the argument, and it may be an extreme one, that the head of the constitutional body should be free to set a figure in his deliberate judgement and the Minister of Finance would receive it, having no standing to question that figure.
I think, and I would admit, that Hon. Member Ramjattan has argued at times that the heads of those constitutional bodies will be reasonable persons and would not set outlandish or unreasonable figures for the Minister of Finance to provide. I should let Hon. Member Mr. Ramjattan know that even amongst us Ministers and agency heads are under pressures to be seen to be performing and with a desire to meet evident needs of our people have started with figures two to five times what they eventually could be allocated. So here we have that situation even amongst us, the Cabinet, where people start off with figures that call for funding that could be five times what they could eventually be granted. I would not take it as just reasonableness. In fact, reasonableness is what often causes our problem. We agree that it would be reasonable to maybe double all incomes across Guyana. It would be reasonable and it would be desirable, but it would set us back on the same path as we were after Independence.
The budget process is one of managing scarce resources, making hard and difficult choices with what we have available. I do believe that one cannot separate the setting of budget figures and setting quantities of money to be spent or to be had from the responsibility of raising revenue. That is almost a recipe for what might be or what certainly would appear to be irresponsibility, not having both things. If I only had to call for money and it comes, I do not develop the sense of responsibility of getting the money and working for it or taking the responsibility for raising the revenue.
We may be facing a conundrum in what is written in the Constitution but our minds are not closed. For example, an arrangement where the Minister of Finance has no say in the figures that may be demanded of him, does that not infringe on his constitutional role of responsibility for the nation’s financing? Does it not also infringe on that side? We may be facing a conundrum but our minds are not closed. Our handling of the similar issue with respect to the Office of the Auditor General was pointed to in those discussions as indicative of an approach in considering the questions of these constitutional bodies and how we may evolve a different approach if required, if desired and if we think it would really be an improvement to us.
However, I want to acknowledge that the Hon. Member, Mr. Greenidge, acknowledged that we have arranged and presented this year the funding of the Customs Anti-Narcotics Unit (CANU) and State Planning Secretariat differently and presumably more to his approval. It is evidenced that his criticism and other criticisms have not been falling on deaf ears; we out into effect those we can concur with in a timely way.
Mr. Speaker and Hon. Members, I feel I need to speak to another large area of Hon. Member Greenidge’s presentation and also Hon. Member Ramjattan’s presentation; he just spoke before me. That of Privatisation Unit (PU) of the National Industrial & Commercial Investments Ltd. (NICIL) and other activities which are termed off budget financing…
Speaking to PU/NICIL, Sir, we must position PU/NICIL against the background that we, Guyanese, and Guyana have come from, the position where the Government took the not so commanding heights of our economies and 85% of all economic activities were in the hands of the Government. That is where we have come from. We of the PPP/C still see a role for Government in the economy, particularly in a country like Guyana at this stage of its development. It is nothing like the holding and owning of enterprises responsible for 85% of our economic activity, but a role to influence and take a lead in key areas. Some people say that the Civics are not PPP but some people say that the Civics, maybe, are more PPP than the PPP. I might want to hold to the second view if I had to choose one of them. I want to identify that I encouraged and supported the combination of the Privatisation Unit (PU) and National Industrial & Commercial Investments Ltd. (NICIL) and that combination becoming the lead agency for the Government in any desired investment or lead investment taking a lead in our economy. We maintain that no laws are being broken, neither in the operation of NICIL nor in any of the so-called off budget transactions. There is auditing by the Auditor General’s Office and, most of all, we, Guyanese, are better off having PU/NICIL to act in our economy.
On the Berbice River Bridge and on the Demerara Harbour Bridge (DHB), In my drafting I had put together – and I want to acknowledge that I am only following in the footsteps of Hon. Member Moses Nagamootoo in making the connection between the two... Many persons have called for this reduction in tolls. I would like to say that the Government has retained a ferry service from Rosignol to New Amsterdam to facilitate those pedestrians whose destination is New Amsterdam and, maybe, to provide the same sort of costing to them as before. I am sure that everyone who uses the Berbice River Bridge is better off for having it and paying the tolls when one thinks of the long delays and uncertainties of the old ferry crossing. Lots of us called for, “Oh, Lord, when are we going to get the bridge? When are we going to get to leave this ferry?” I would be bold enough to say – maybe a bit of what Hon. Member Moses Nagamootoo has already, at least, implied – that it is not the high tolls of the Berbice River Bridge that is the problem, but it is the low, highly subsidised, unsustainable tolls of the Demerara Harbour Bridge.
We should recognise that history and circumstances at times determine how various things end up. The Demerara Harbour Bridge has ended up with a low toll and the Berbice River Bridge has ended up with a toll that is better than before. When taken overall, it is better to have the Berbice River Bridge but it is a higher toll than the Demerara Harbour Bridge. That is how things have turned out, but that is not the end. We have been told, during this debate, that the DHB may be worn out in six years’ time and we need to urgently start construction of a supporting overhead bridge. Bearing in mind our emergence from the Least Developed Countries (LDC) to More Developed Country (MDC), the reduction in grants and soft money, we most probably will be looking to do something as in the case of the Berbice River Bridge – a public/private partnership in the pattern of the Berbice River Bridge.
More than that, my mother used to say, “Do not get carried away too much with other people’s good luck. You do not know how things will turn out.” Right now, I presume that many people who use the Demerara Harbour Bridge, if they can have a magic wand to wave and tomorrow they can get the Bridge and all the traffic arrangement can be made so that they would not get tied up for an hour or two and have to leave early to cross over... I presume that if we could wave a magic wand and offer it to them tomorrow, they probably would say, “Yes, let us have it.” So, things keep evolving and, particularly, with steady growth and development, it will keep evolving.
The Marriott Hotel: we have talked about the Marriott Hotel. I find something good, actually, in the protests that we have had about the Marriott Hotel being built at the site and not a Guyanese is working there. I find something good in that, in that persons want to be a part of something happening in our society. Persons used to protest before that it should not happen and it should be stopped and so on, but they have moved on and that is a good thing. I am happy about that.
Again, we, of the PPP/C, maybe, have to take the whole thing into consideration. We would like to be there, standing up and directing the building of the Marriott Hotel. But let us look at what is happening, too, in our job market. There are jobs that go a begging and all of us have had experiences of poor workmanship, reports of widely variable quality of work and delivery of work. These are things. If we are going to be putting up a Marriott Hotel where the issue is the hotel where Guyanese would find work and there would be Guyanisation programmes after, that is what we want, a hotel built in good time and within budget and, indeed, within the lowest possible budget.
I look for the day. I want to nurture that feeling of Guyanese who want to be good workers to the world. Indeed, it reminds me of the slogan that was in Singapore back in the 1980s. Singapore had a slogan that said, “Let us Singapore people provide the world with a German quality workforce at two-thirds the price.” That is the principle that I would like us Guyanese to take up and, hopefully, with this seven years behind us, we can get going on a road like Singapore.
I want to speak to the Guyana Power and Light Inc. (GPL) because it has been said that it is a “black hole”. I have put together some papers here – and this is one of the difficulties in running companies from enterprises in Parliament – and I would like to go through quickly a set of sheets. The big facts about GPL are: one, the Government has been keeping the electricity tariffs below the economic price, and this has been something that has been happening since in the 1970s. Indeed, this is one of the things that the institutions – the Inter-American Development Bank (IDB) – were probably beating the PNC on its head about in the 1970s/1980s and they also beat us on the head about it, giving us all of the reasons why subsidising electricity is a no-no. The rich people use more electricity, so why subsidise it? They are being subsidised more than the poor people. That is one argument that cannot be easily contested. But the “black hole” comes about because if you look on the first page, you would see that there are foregone revenues of billions of dollars most years and over the period 2003 - 2013, it totals $34.3 billion but, as is allowed in the arrangements, we took back some of it in 2010/2011 when oil prices fell. We took back some of what had been foregone and kept prices the same - stabilisation of prices.
The net effect is that over the period 2003 – 2013, there has been a foregone revenue of $27.9 billion and this not savings. This is money that the company needs to do its operation. This is money that largely has to be met some other way other than through the tariffs. This “black hole” is really the subsidising of electricity prices to the consumers of GPL – to all of us in Guyana. This is what the “black hole” is. We are the “black hole”.
The second big problem with GPL is this culture which, hitherto, has accepted endeavours of our people to obtain electricity and pay for less than they take, stealing electricity to put it barefacedly and boldly. When one looks at the numbers, they seem to work out to maybe one in every six of us customers of GPL in all geographical areas, religions, races, thinking that GPL electricity is a good target and candidate for stealing form. This is the big problem.
In June 2011, the Caribbean Electric Utility Services Corporation (CARILEC) published tariffs across the region. When you look at these figures, you will realise that most governments do some subsidising or have some special situation. In the residential case, Guyana is fourth up from the lowest. We would admit that we have had, traditionally, a significant cross subsidy to the lower quantity customer end and so, correspondingly, our prices are higher at the large consumer end. If one looked at a chart for industry and large commercial, one will probably find that we are more to the middle than towards the lower end.
The important thing to note is that at the upper end, we doubt that anybody takes taxes and money with withdrawals from the electricity. Up at the upper end, there are prices for electricity in the order of $90 - $100 per kilowatt hour (kWh) and those probably are the costs being recovered.
We should review our position that GPL is a “black hole”. It is we who are the “black hole”. We should review our position that GPL is a big, inefficient place and our prices are higher than other prices in the Caribbean. We should review those positions because we do not progress unless we face up to things squarely, honestly and earnestly. We cannot correct if we hide from the facts. Those are the facts. There are some other charts but time presses and so we would not look at them.
I would like to say, too, in the case of the last page which deals with something that I picked up, because it came out recently, on fuel prices, Guyana Oil Company (GUYOIL) is in this. We have maintained GUYOIL as a Government owned company so that it gives us a mechanism of interacting in the market. We have a price that is on the lower side but not very low. If it were too low, the other private sector companies may well be in a position to argue that we are subsidising against them, making it impossible for them. It is level with the first six, or so, other countries.
I hope that Hon. Members would take these presentations made here to heart.
We all know much about the Amaila Falls Hydropower Project. We are working to get the Amaila Falls Hydropower Project going. How do we resolve our desire for lower cost electricity and the fact, I hope we would accept, is that what we are doing now with GPL is pretty close to the best that could be done? How do we resolve that contradiction? We persevere in trying to get the Project going, which has a promise of lowering generation cost by about half, from about 26 cents a kilowatt hour to about 12 cents a kilowatt hour.
I have said this before but in GPL there is this project which is going to upgrade the transmission system. By the end of the year, the Berbice and Demerara systems should be interconnected. There should be about seven new substations in North Ruimveldt, Golden Grove on the East Bank Demerara, and Good Hope and Columbia on the East Coast Demerara. These would greatly improve the provision of electricity to our customers and should cost so that...When there is a problem now in one location, it tends to affect a huge, maybe a quarter or more, part of the whole network. In this new system, maybe, it could be limited to one-twentieth. If there is a problem in one, a similar problem at a particular location, because of the many new feeders coming out of the new substations, it should really reduce the frequency of interruptions and the duration of interruptions.
The new system will involve supervisory control and data acquisition called the Supervisory Control and Data Acquisition (SCADA) system. We hope to be able to find some money - it may depend on how oil prices go - to provide the capitalisation cost for about 2,000 households with lower incomes so that they can get onto the grid. There is a new 26 megawatt power plant coming up at Vreed-en-Hoop.
Hinterland electrification: Mr. Speaker, if you go through the Hinterland, you would see many of the homes now, maybe altogether, about 13,000 homes that have solar lamps, 11,000 from our recent system and 2,000 from previous programmes.
I paid attention to Hon. Member Dr. Rupert Roopnarine yesterday and I would like to assure him that all of the things that he spoke about are in our considerations. I think he spoke about – and others may have spoken about – the large amount of moneys in the Guyana Gold Board (GGB). They should know that the GGB buys gold at London-fixed prices in Guyana and it sells it back some three months later, generally. The GGB has little or no margins there. There are big flows and there are big risks involved in those flows. Most private people who have gone into the business have eventually come back and said to me, “For me to be getting into this business in Guyana, you have to allow me to take up the royalty.” I said, “No way. I am not giving you the royalty. If you want to do business in Guyana to compete with the GGB, do it, but I am not giving you the royalty to compete.” Do not be deceived by those big moneys in GGB. They just flow through all the time.
Here we are at the end of a seven-year period of steady growth and it has brought us to a relatively good position. On the one hand, it is said that success leads to more success and greater success will be ours, but there are dangers too. There is the danger that our expectations as a nation and as individuals could rise faster than our growing capability. Growth can also be thwarted if growth and development ends up creating inflationary pressure. If we do not work more, growth and development would push prices up. I have seen evidence of that. At times, when people go into the market and they find prices going up, they wonder whether the success of our sales of non-traditional agricultural produce to the Caribbean is not a cost. And it could be, if we do not increase production. We have to increase production. We have to keep working and working more productively if we have to maintain our growth and development.
In this regard, I would like to end on a good note. Even as I was preparing for this debate, something caught my attention. A boat builder, Mr. Satrohan Sookdeo, of Pump Road, Mon Repos said plainly:
“I like build boat.”
There is Mr. Leighton Bynoe of Charity, Essequibo Coast. He said:
“Boat building has been the joy of my life and it has brought me much happiness and satisfaction. Yes, of course, it is very hard work and inclement weather can be a disadvantage at times, but my love for my job and dedication keeps me going. It is such a thrill to stand back and watch my handiwork when the job is completed.”
Mr. Speaker and Hon. Members, I would like to call on all our Guyanese to... I know, from my experience working in bauxite, that all our people have in them ingenuity, a spirit of innovation. Do you know when you used to know that? When you went into the machine shop and there were 500 guys and a few of them were moving purposely, you know that they were building something that they really liked and they wanted. We used to say cow running. Every one of us has a spirit of entrepreneurship. Each of us has a spirit of innovation and ingenuity. What I want is that we follow these two Guyanese, Mr. Leighton Bynoe of Charity and Mr. Satrohan of Pump Road, Mon Repos; take them as examples. If we can be like them, Guyana will surely be on the road to becoming like Singapore and becoming a developed state.
I thank you. [Applause]
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