Traditional sectors need to be supported – GCCI
Describing the growth in Gross Domestic Product (GDP) as “fair” for 2018, the Georgetown Chamber of Commerce and Industry (GCCI) has made a call for the traditional sectors, such as forestry, to be supported, as these sectors are being overlooked with the production of oil coming on stream soon.This is according to the Chamber’s President, Nicholas Boyer, who was speaking at a recent event hosted at the Pegasus Hotel, Kingston, Georgetown.“We will need to do more to support and improve our traditional sectors that are renewable, such as agriculture and forestry, for instance, as they face the risk of losing competitiveness on account of higher wages in the oil industry and construction sector and appreciation in our currency,” he said.While giving a brief review on the country’s economic performance, Boyer pointed out that the construction sector grew by 11 per cent as a result of the preparations for the oil industry requiring an increase in construction of residential and commercial facilities. In addition, he alluded to the bauxite industry which grew by 24.6 per cent as a result of new bauxite companies.As a consequence, the GCCI head said, “When you analyse this data, you realise that the biggest risk facing us is that of an undiversified economy and the spread of Dutch Disease,” as he called for more emphasis to be placed on renewable sectors.On another note, Boyer highlighted that credit to the private sector increased by 4.2 per cent to $233.6 billion.He dubbed this increase as a good one but also signalled some concerns. “As commercial project sizes grow, indigenous banks will be hampered by a low single borrower limit, and local real estate developers will be outcompeted by regional ones that have access to a cheaper cost of capital,” he pointed out.Importantly, he emphasised on Government’s spending for last year, which increased by double figures. “Government spending for 2018 was $216.7 billion, which represented an increase of 11.1 per cent, again (in) contrast (to) that we have an increase in GDP of 4.1 per cent,” Boyer reminded.Against this backdrop, he said total tax revenue increased by 16 per cent, pointing out that “this is why in the expenditure approach to GDP analysis, boosting the C, Private Sector consumption, is always better than just boosting the G, which is Government spending net of taxes, as an increase in Private Sector spending has a multiplier effect and can give more growth than a similar increase in Government spending”.Last week, the People’s Progressive Party (PPP) Presidential Candidate, Irfaan Ali, opined that with the right investment opportunities and economic environment, Guyana’s traditional sectors can thrive to provide more employment and other benefits, rather than a sole dependence on taxation to garner capital.He was at the time being interviewed on the creation of jobs, where he assured that under his Government, economic sectors will not be neglected. It was explained that the prospects of oil is not the “only saviour” since traditional sectors are opportunistic with assistance from Government. “We need a Government that has ideas and vision and not a Government that seems to be barren on ideas and think that taxes is the only solution in terms of raising capital. Also, this thing that oil and gas as the only saviour out there or opportunity that is ahead for Guyana. Oil and gas would bring tremendous opportunity for Guyana but there are great opportunities in all the traditional sectors and also in newer sectors with a little tweaking,” he stated.Ali expressed that draconian measures on Government’s end have seen downward spiralling of most of these sectors. This is owing to the lack of incentive regime for investments among other unfavourable moves that were noticed, especially in the mining sector. In five years, he informed that the industry has declined by approximately 40 per cent, with an average 15,000 persons directly affected.