Good evening
Ladies and gentlemen this is my speech to parliament delivered on the 2nd
November I have made some small modifications not to the content but for
example where I said Mr. Speaker in the parliament I have changed to Ladies and
gentlemen. It is long around, 30 minutes.
President Jagdeo's
speech launching this 9th Parliament laid out, in glowing terms,
a place where there was prosperity, a place where there was peace and
cooperation among the different groups of a plural society, a place where
development was going on, where people cherished the rule of law, a
place where the government had vision and was spending billions solving
national problems as a matter of urgency, a place where every man and woman had
equal opportunities, and the President outlined numerous other accomplishments
which made me wish that I was living in the Guyana President Jagdeo was
speaking about.
Sadly I see another
Guyana, one where the rule of law does not exist, where the judges
are under effective executive control [the US state department says so
in their 2005 report on Guyana] I see a Guyana where victimisation is
rampant, I myself can bear witness to this fact, where there is no equity in the
sharing of the national pie, where corruption is the order of the
day [Transparency International now agrees] I see a place where incompetence
has reached monumental proportions and I see a country which is in the middle
of the biggest crime spree in our history due to the poverty of its citizens, I
see a country where civil strife is just a spark away from ignition.
I see a Guyana where
we are borrowing at an unprecedented rate, and are hoping for debt
forgiveness, since what we are building with the money we are borrowing is not
bringing wealth to the nation, and whilst one group gets richer the
other groups are plunged into an ever deepening chasm of despair and poverty
making Mr. Jagdeo's claims of equality unsubstantiated and I see disaster
written all over it. And I feel despair for the consequences we will have to
endure if things do not change.
So what is the
truth? Is what Mr. Jagdeo saying about our situation true or is my
perceptions of our condition true? Well the truth is contained in the Bank of
Guyana Statistics for 2005 and also in the national Budget for 2006.
For the purpose of
my presentation I will deal specifically with tables 9.1 and 10.1 of the annual
report of the BOG.
The situation as outlined
in table 9.1 of the BOG statistics for 2005 tells us that our sugar output grew
by only 3.93% in the 11 year period between 1995 and 2005, that rice declined
by 19%, even in 2004 before the floods rice was showing a substantial
decline, we see that livestock grew by 170 percent, part of the answer
of course, is this fiasco of creating a monopoly in livestock rearing to enrich
a few at the expense of the many local consumers, who have to pay double
for chicken today, and in addition we have lost 3 billion dollars in import duties
in the 3 years during which this has been going on.
Calls to the BOG
could not inform me what this 170% increase really represented, whether it was
chicken or cattle or both, which is why I recommend that the honourable
minister of finance look into this table 9.1.
Ladies and
Gentlemen other agriculture grew by 83.51%, seeing that this other
agriculture grew by such a big amount from $3,5 billion to $6,5 billion,
I again asked the BOG what it represented, since this $6,5 billion was
very close to the $8 Billion value of the rice we produce, making it almost
as important as rice in our GDP, but I was again unable to get a satisfactory
explanation as to what this other agriculture which was such a big part
of our GDP represented, but given the loss of production capacity in the
agricultural sector which I will come to soon, its just not possible for it to
double.
The Fishing industry
grew by 100%, forestry declined by - 4.5 %, mining and quarrying
increased by 108% and manufacturing increased by 58.21 % so in the 11
year period between 95 and 2005, expressed as a percentage of our GDP sugar,
rice, livestock, other agricultural operations, fishing, forestry, mining and quarrying
and manufacturing grew from 51.8 billion in 1995 to 62.9 billion 1n 2005 an
increase of 21.37%.
During this same period our GDP in the areas of transport
and communications, engineering and communications, rent of
dwellings, financial services and Government expenditure, expressed
as a function of GDP increased from 22.4 billion in 1995 to 66.6 billion in
2005 an incredible 200 percent increase!
Now ladies and
gentlemen because the productive sectors only grew by 21.37% it was surprising
to find that the non revenue earning sectors expanded by so much, something had
to give, and it did, since in 1995 our GDP at market prices was $88,3
Billion and our domestic expenditure at Market Prices was $95 Billion a
difference of minus $6,8 billion, it was high but it was manageable,
but in 2005, the GDP at Market prices was $157 billion and the
domestic expenditure at market prices was $211 billion a deficit of
minus $54 billion in that one year alone! We're living above our
means, way above, but have any of you seen the improvements? Do you see the
affluence Mr. Jagdeo is speaking about? This huge deficit situation is also reflected
in the 2005 Budget, I know that my colleague Mr. Winston Murray spoke in the
area of economics and I am poaching a bit, but I think that it is important
enough to be repetitious, it is the largest deficit budget in our
history, it calls for the expenditure of $103 billion, the budget
visualises a loss of $10,9 billion, it estimates selling or disposing of
miscellaneous capital assets of 4.4 billion, it estimates borrowing from
the IFI's of 18.3 billion and it visualises HIPC and other grants of 10,7
billion, so in reality all we will generate as revenue by the relevant
authorities is 58,6 billion, as for the balance of 44 billion contained
in the budget we are begging, borrowing and selling our patrimony to
spend.
Sugar industry
It is incredible and
unforgivable that even after having nearly a decade of notice of the
withdrawal of the EU subsidy on our sugar, we are now totally unprepared to
face the future with any sort of viable alternative plan in place for the sugar
industry. Today we passed a bill in this house required by the cricket
authorities for world cup cricket which was a day late of the absolute deadline,
I am too new to this august chamber to question the competence of that; unfortunately
we have not been so fortunate in sugar, we have missed the boat completely in
sugar.
There have been no legitimate
attempts to diversify the sugar industry whatsoever; especially to ethanol
or aquacultural production, there is only the one dicey expansion
at Skeldon which appears to be our panacea for all the ills that faces
the sugar industry.
This opium induced dream,
which embraces the concept that making the Skeldon factory produce sugar at
some incredibly and probably unattainably low price, could compensate for the
inefficiencies and expensive nature of the other parts of our sugar industry,
is ludicrous.
It does not help
that this year despite what our Honourable Minister of Agriculture has said Albion
for example asked for 529 million Guyana dollars to do its capital works
and was only given $183 million dollars, or that Rose Hall asked for $414
million and was only given 193 million Guyana dollars, it does not
help that all estates are now producing sugar at a higher cost in 2005 than the
estimated amount that was first calculated when the Skeldon project concept was
first pronounced, all the projections and plans intended to push the price down
have to date failed and denying the sugar estates the capital money they
require to become more efficient is not conducive to keeping the industry
competitive; for example at this time Albion/Port Morant and Rose Hall are
currently fetching the sugar industry in Guyana, they are showing far more efficiencies
than Skeldon which is showing the poorest performance both in the field and in
the Factory than any other estate in the industry.
Incredibly we do
not have a functioning diversification department in Guysuco, the Tate people
want to grow sugar cane and apparently nothing else and the board of GUYSUCO, comprising people who apparently
do not have the vision or the knowledge to instigate diversification as a
matter of urgency, have sat back and allowed time to catch up with them, to the
detriment of this nation.
The Vern sugar
commission in 1948 estimated that to establish each square mile of
sugar cultivation in Guyana required the digging of 65 miles of trenches and
drains to facilitate the movement of sugar cane from the field to the
factory by punts.
In doing so we moved one billion tons of
earth in the sugar belt. And in the process our forefathers bequeathed to us fields
which are in fact 10 acre fish ponds which can be flooded in most of the
Demerara region by gravity alone i.e. you would not even have to buy one
pump to grow fish there, but nowhere in the industry in Demerara from
Uitvlught to Enmore do we have one legitimate experiment in aquaculture to
see what the problems are likely to be, this is one area where the
Chinese have a lot of experience, so I would have much preferred to see them in
a joint venture [our land, their technology] trying to develop a database of aquacultural
field operation problems in Guyana, from which we would learn how to grow fish economically
for the lucrative markets abroad as an alternative to sugar or ethanol in
special areas, rather than trying this foolhardy exercise to expand Skeldon sugar
operations, when the estate is plagued by a shortage of labour and
equipment to perform the routine functions in its existing cultivation even today.
It is a sad
commentary on our abilities as managers that all we can do is come up with is this
risky and probably unattainable goal of transforming the sugar industry in
Guyana by building a new factory and expanding the Skeldon cultivation
at a time when everyone else on the planet are abandoning theirs.
Expanding the
Skeldon cultivation is fraught with much danger, and the effects are beginning
to be felt even as I speak here today, since the Skeldon yield has been
declining, and at the end of 2005 they were taking more Tons of cane to
make a ton of sugar than any other estate in the industry, since in trying
to drain the expansion in the back areas of the cultivation without
expanding the infrastructure in the front of the estate, kokers etc, they are overloading
the drainage system and this is having a deleterious effect on the growth of
the cane in the front areas as I predicted since May 2005, and so Skeldon is
performing worse than Uitvlugt which is traditionally the estate with the
poorest yield in our industry,Ladies and gentlemen its easy to build a new
factory but expanding the cultivation at Skeldon to supply that factory with
enough cane is the real problem and it's looking more and more unattainable
now. It will not materialise for at least 10 years, and I don't care what high
tech factory you build, once you cannot supply it with cane, you are building a
heap of scrap iron.
Rice.
The production of rice is declining, in 1999 we
produced 10 billion dollars worth of rice which accounted for nearly 10 percent
of our GDP in 2005 we produced 7.9 billion dollars worth of rice which was only
around 6% of our GDP, this is based on what we produced, not what we exported
which is why I am using the GDP values and not the export value. This would
have been a good time for rice to be a strong contributor to our GDP to help us
weather the storm that is to come in sugar, but we are failing. At 6% of GDP it
just is not as important to the economy as it used to be. And this decline is
apparent across the board for all agricultural products, ladies and gentlemen
to give a few examples which are typical of the whole and not selected because
they are not performing well, in 2005 expressed as a percentage if the year
2000 which was set as 100% coconuts was only 75% of what it was in 2000,
cassava 45%, other ground provisions 51%, plantains 15% now remember that this
is not down by 15 percent it is only 15% of what it used to be, eschallot 8%,
pineapple 50%, hot peppers 19.8%. Citrus 43.9%, cereals and legumes 41.3%,
tomatoes 17%, etc.
We have failed to
keep the small farmers on the land and we are going to have to accept the
consequences of years of mismanagement, the PPP is very glib in telling us that
they spent 10 billion on this and 40 billion on that, but they do not telling
us what exactly they achieved by it, nor can we see it, and it is beginning to
take its toll. It's not what you spend, it's what you achieve with what you
spend that's important. Frankly there is very little that you can show which
makes those levels of expenditures worthwhile, hence our massive economic
problems.
With the agricultural
sector now in this downward spiral, they are going to add insult to injury
by adding VAT to the equation in agricultural inputs which Christopher Ram in
his new booklet calculates will make the raw materials for agronomy 10 percent
higher than they are today.
Ladies and
gentlemen there is massive theft plaguing the fishing and shrimping sector,
one of the reasons why Georgetown Seafoods was forced to close was the theft of
almost 40% of their catch, this theft is apparently operating under an enabling
situation by the government who refuses to implement a few simple control
mechanisms advanced by the trawler and processor owners to curb it; they are even
allegations that the theft is being facilitated by the Ministry of Agriculture because
they are turning a blind eye and a deaf ear to a system which requires any
exporter intending to export fish or shrimp to show where they got the huge
amounts of fish and shrimp they are exporting, so stolen fish and shrimp are
being exported openly as legitimate produce by people who do not own a trawler
or a processing plant.
We have lost all
contact with our system of government, the Westminster system visualises a
highly trained group of Permanent Secretaries who will manage the various
ministries, we are mutilating this time honoured and proven system by expecting
that a political appointee, with no experience whatsoever in managing anything,
can assume the managerial control of a multi billion dollar operation without
the backup of the competence which the real managers the system visualises
i.e. the Permanent Secretaries, who are not chosen today for their managerial
skills or their competence, but are essentially by and large just rubber stamps
to their Ministers and so they have both become totally incompetent to run the
affairs of state the evidence is everywhere.
The Minister's function
under this Westminster system is to provide political guidance and noting else.
It is an absolute necessity to put back in place the highly skilled managerial personnel
that will manage our national affairs effectively before we sink further down
the well of poverty and debt.
In investigating the
Ministry of Agriculture's structure, I discovered that when there were two Ministers
of Agriculture there were two permanent secretaries, the indication being that Ministers
regard their Permanent Secretaries merely as their assistants and nothing else,
which is the inherent problem with the system today, which makes it so
dysfunctional and inefficient.
After looking at the
situation in the Ministry of Agricultural and after having examined the
competence or lack thereof of the functioning of the Ministry of Agriculture, I
have come to the conclusion that we may need two Permanent Secretaries under
the one Minister of Agriculture, one for crops, including sugar and rice and one
for livestock and fisheries. We are in a state of flux due to the withdrawal of
sugar quotas and the decline in almost all areas of agriculture, and so what we
do now within the next few years will have an effect on how this nation fares
in the future, whether we succeed or fail.
Finally it would be
remiss of me not to point out that any diligent researcher into these areas of
agriculture or indeed the economy is handicapped due to the absence of data,
the BOG statistics are becoming more and more unreliable, one gets the
impression that they are produced to obscure the situation rather that to
reveal it, the rice production figures for this nation are not coming in a on a
timely fashion from the Rice Board, by the time we are made aware of the short
comings, the year is too far advanced to salvage anything. Guysuco has not
placed an annual report in the Parliament as they are required to do by law since
2002! And the fishing Industry is unable to give factual figures for their
industry. They have an association but they are too competitive and narrow
minded to share information and this leaves us relying on the questionable BOG numbers
at the end of the year, I found this strange and inexplicable since the fishing
industry is made up of a number of large companies and there is precedent, for
example in the past there was the British Guyana Sugar Producers Association,
which shared information so that they can better represent their industry at
the national level but suspicion and fear is preventing the fishing
companies from forming a truly proactive body to represent them, is this the
Guyana we want? A situation governed by suspicion and fear?
