Month: June 2018

25 Jun
By: Tanika Jones 0

World Bank approves US$35m for oil sector preparations

The World Bank Group today announced approval of a US$35 million Development Policy Credit to support Guyana’s efforts to bolster financial sector development and fiscal management to better prepare the country to tap its newly discovered oil and gas reserves and transform its oil wealth into human capital.

The assistance of the World Bank in this area had been previously announced by the government here. The terms of the credit arrangement were not disclosed in today’s press release from the World Bank Group.

The released quoted Guyana’s Finance Minister Winston Jordan as saying “This financing provides critical support to our reform agenda and efforts to strengthen institutions and build a resilient economy that is capable of withstanding both external and domestic shocks. These reforms will be key to guide the management of oil revenues for the benefit of present and future generations”.

The release said that while currently nearly one in four people in Guyana live in poverty, experts project that the GDP will surge when commercial production of newly-discovered oil and gas begins.

“ Guyana is making important strides to promote financial resilience and improve fiscal management, and has embarked on a broad-based reform programme,” said Tahseen Sayed, World Bank’s Country Director for the Caribbean.

“These reforms will be key to build a strong economy that is underpinned by a strategic management of public resources for the benefit of the Guyanese people.”

The release said that the financing focuses on strengthening financial stability and enabling sound financial development to nurture macroeconomic stability and long-term growth. “In particular, it will support banking reforms and depositor protection, the establishment of a deposit insurance scheme, implementation of a new insurance law, and the country’s anti-money laundering efforts”, the release said.

It added that the Development Policy Credit is the first of two programmatic financial and fiscal development policy credits and is financed from the International Development Association.

 

Source: https://www.stabroeknews.com/2018/news/guyana/06/25/world-bank-approves-us35m-for-oil-sector-preparations/

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22 Jun
By: Tanika Jones 0

Senior Economic and Financial Analyst, Dr. Vilas Gobin delivers Presentation at the Budget 2019 Sensitisation and Training Programme 2018, Arthur Chung Convention Centre, Thursday, June 21, 2018

Senior Economic and Financial Analyst, Dr. Vilas Gobin delivered a presentation titled Avoiding Dutch Disease and the Resource Curse at the opening of Budget Sensitisation Sessions hosted by the Ministry of Finance.​

Avoiding Dutch Disease and the Resource Curse
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22 Jun
By: Tanika Jones 0

Address by Hon Winston Jordan, Minister of Finance,at the Opening of Budget 2019 Sensitisation and Training Programme 2018, Arthur Chung Convention Centre, Thursday, June 21, 2018

The Ministry of Finance today opened its first Budget Sensitisation Sessions for 2019 at the Arthur Chung Convention Centre on Thursday, June 21,2018​. The Sessions are  aimed at providing support to Heads of Budget Agencies and their technical teams who hold responsibility for preparation/compilation of Agency Budget submissions.

Heads of Budget Agencies, Permanent Secretaries, Regional Executive Officers, Heads of Subvention Agencies and Constitutional Agencies

Good morning!

I am pleased to be able to join you this morning, at this important event attended by senior officers of the Government sector, who are charged with responsibility for their respective Agency’s budget. The start of the National Budget Cycle is an important milestone in our financial calendar.  Budget 2019 represents the fifth,and penultimate, budget of this Administration’s first term in Office; and the third consecutive year that it will be presented to the National Assembly ahead of the start of the Financial Year. It is, therefore, an opportune time for us to take stock of the results that we have achieved – or not achieved – and to redouble our efforts to deliver goods and services of a sufficient quantity, quality and timeliness. Many of you have been at the helm of your sectors for several years and, therefore, are in a good position to critically and searchingly examine from whence you came, where you are, and where you are going.

As you pause to reflect, let me remind everyone that a national budget is the single most important planning tool in the armoury of the Government. It is a living and dynamic document that gives life to the national and sectoral visions and policies. Most importantly, it is the vehicle through which we implement programmes and achieve national results. When the resource envelope of any national budget is allocated in an environment of stable macroeconomic fundamentals and sound public financial management and, is supported by

  • robust institutional structures,
  • effective management systems,
  • functional monitoring and evaluations systems,
  • and last but most critical- diligent, committed and competent leadership,

then the chances of successful budget implementation are quite high.  However, when any one of, or a combination of, those elements breaks down or goes missing, success becomes evasive, even though expenditure may have occurred.

As Heads of Budget Agencies, you must pay keen attention to ensuring that these elements are all in place in your respective sectors, regions and agencies.

The Government commits to making resources available, subject to the fiscal space, for you to pursue workable solutions. Please bear in mind, that expenditure pressures such as those demanded by, for example, our commitment to improving wages and salaries and national security; bridging the divide between the hinterland and the coastland; and narrowing the infrastructure gap, on the one hand, and revenue pressures to lower taxes and tariffs will continue to impose premiums on planning, programming and pro-active performance.  Since 2015, we have proven that we are up to the task, that we are prepared to implement measures that will benefit a broad cross section of our population. In this regard, we have consistently improved wages and salaries; undertaken sweeping tax reforms to improve tax administration and bring greater equity to the tax system.

We have delivered early National Budgets for 2017 and 2018, to ensure that Heads of Budget Agencies had the entire financial year to implement work programmes – a stark departure from what obtained previously, when budgets were presented as late as end-March and approved in mid-April, thereby implying a 2-month turnaround before the next budget cycle began in early July. Procurement of public goods and services has undergone changes: thresholds have been increased; several training courses in monitoring and evaluation, and  supply procurement have been executed -all with the aim of ensuring an environment that contributes to improved performance in the public service. More recently, we have developed a public-private partnership framework to enable more creative financing approaches, to overcome loss of concessional financing, occasioned by our elevated status of Upper Middle Income Country, as classified by the World Bank.

Spending money is easy. Spending money wisely and prudently to effect results takes skill and effort. It means understanding the problem and finding the solution that gives you the result, then designing a plan and costing it in a way that delivers value for money,then spending the money.Many times, we do the process the other wayaround: we spend money without understanding what is the problem to be addressed. The predictable result is the wastage of public resources that we are entrusted to spend. It is worth the time and effort – please ensure you secure the skills to understand the problems in your sector, devise solutions, plan for and cost the implementation of these solutions.

Additional revenue resources on the not so distant horizon present a wonderful opportunity for Guyana to transition from potential, of which we have so often heard, to prosperity, of which we have so often dreamed. But money alone has never solved a nation’s problems;  in fact, in some countries, it has been the source of bigger problems and conflict. We must remain steadfast in our efforts to strengthen our systems and institutional structures to prevent waste. His Excellency, President David Granger has repeatedly highlighted the need for cost efficiency and results-based performance.Collectively, we are all tasked to deliver on his charge to us.

We are a country that is still far away from where we would like to be. Achieving the Good Life and making quantum leaps in improving human development across socio-economic fronts, will take concerted efforts and resources. Unlike other countries that have squandered their patrimony, the Cooperative Republic of Guyana must be different. We must aim to emerge over the medium term to become a model country that blends the exploitation of petroleum results with the pursuit of a Green state development Strategy. Gains in revenues must be utilised in a targeted and responsible manner to achieve a diversified and resilient economy. Accountability, transparency and good governance must be core principles that drive us to excellence in our work ethic and work output, thus enhancing our capacity to deliver RESULTS, services and works to the people across our ten regions.

The Green State Development Strategy offers a unique opportunity for us to transform our sectors and the country as a whole, along a path of green economy principles.  I hope the budget submissions from your respective sectors will demonstrate green initiatives within the public sector, as well as support engagements with the private sector to boost the realisation of a green Guyana.

Permit me to use an in-house example: increasingly, we have been issuing e-copies of circulars, invitations and notifications from the Ministry of Finance, in our efforts to reduce the use of paper.We have changed our lighting fixtures to LED and, this year,the Ministry of Finance will be sending e-Christmas cards. We urge other agencies to jump on this bandwagon, in the process reducing cost and improving our green efforts, conscious of our environmental footprint. This is a very small, low hanging fruit readily available to be picked. I anticipate that this would be the start of much more that will be done. I would expect, for example,that the Ministry of Business will consider funding start-ups for small businesses to support green initiatives; that our buildings would be incorporating building codes so that support structures that use less energy can be utilised; that we will employ sustainable agro processing practices, and that greater use of management information systems will be made to reduce travel costs and paperwork to name only a few.

With our national development strategy and Local content in focus, we must give effect to Buying Local, wherever possible, to support our agro-producers and local manufacturers. This will contribute to reduced demand for imports, thereby saving foreign currency; improve local value added and growth; and increase national and household incomes and employment.  As I have indicated on several occasions, I am alarmed and get visibly upset when I attend events across our beautiful country and am served imported water, when we have at least half a dozen high quality local producers. Or,when I am served a fruit bowl that includes apples, grapes and imported melons when I would much prefer a juicy Buxton Spice mangoes, a Pomeroon pear, sapodillas, pawpaw, oranges, cashews and watermelons.  In addition, our choices for construction and renovations must seek to use more local woods and manufacturers. These are just a few examples, and I am urging you to incorporate many local content initiatives in your bidding documents.

I trust that the multi stakeholder expert groups that have met to develop the Green State Development Strategy, would have incorporated novel and innovative solutions to the challenges that exist within the various sectors.  The Strategy should provide a menu of solutions that takes account of the peculiarities of our environment.

Far too often, I have found that the budget proposals submitted to the Ministry of Finance lead to more questions than answers. Budget proposals should be solutions to resolving challenges faced in order to achieve results.

Why do we have increasing allocations to the health sector, but continued drug shortages and less hospital inspections than previous years?  Health accounts for 12.5% of the national budget, in 2018. What intervention within the budget proposal will resolve this conundrum of increasing allocations but declining availability?

Why do we have increasing allocations to education but still less than 50 percent of our children as passing Math and English? Education accounts for 17.2% of the national budget in 2018.  What in the budget proposal will resolve this?

Why do we have increasing allocations for maintenance and infrastructure development, yet our Public Sector Infrastructure Programme is filled with requests to rehabilitate existing infrastructure rather than expanding the capital base of the country throughnew infrastructure, where none previously existed? Infrastructure accounts for 13.1% of the national budget in 2018

Are you, as Heads of Budget Agencies, approving performance-based gratuities without measuring performance? Or, worse, are you signing off on poor performance and shying away from your responsibility to take decisions in the best interest of achieving desired results? Are you putting pen to paper when staff do not deliver or simply sitting lamenting in your offices?

You must be able to competently critique systems that are not working or not contributing to delivering the results. And by critique, I mean offer workable solutions.

Are you coming to Budget 2019 hearings to rehash the same problems and hurdles you did for the last several years?Or, are you proposing innovative solutions to drive national development? What is your theory of change for the programmes under your remit?

I hope that these are some of the questions that occupy your minds. I can assure you that they will be asked during your participation at the national budget hearing slated to begin on August 16th.  And the buck, as they, say stops with you. Where there are hurdles, you must innovate and find solutions. Where systems are failing you,must design new, more effective systems. In short, find solutions and deliver results.

The Ministry of Finance and the teams within the Office of the Budget and the Project Cycle Management Division stand ready to assist. We are only an email or whatsapp message away.  These days that is sometimes faster than a phone call.

The sessions for the remainder of today and next Tuesday aim to provide you with the tools you need to finalise your crafting of your budgets for 2019.  Remember, your budget 2019, is being prepared on the cusp of first oil in the first quarter of 2020. The thinking and brainstorming and strategic direction that must go into the preparation must have started before today. And at the end of this 2-day workshop, you should be better able to produce a product that is measurable, quantifiable, and marries problems with solutions. I look forward to you rising to the occasion to resolve the issues facing your sectors and agencies. See the trees, but aim for the forest.

I thank you.

 

-END-

 

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07 Jun
By: Tanika Jones 0

Minister of Finance attends Forum in Macao, China

Minister of Finance, Hon.Winston Jordan attends the 9th International Infrastructure Investment and Construction Forum in Macao, China

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01 Jun
By: Tanika Jones 0

Address by The Honourable Winston Jordan, Minister of Finance at the 48th Annual Meeting of the Board of Governors of the Caribbean Development Bank

Address by The Honourable Winston Jordan, Minister of Finance at the 48th Annual Meeting of the Board of Governors of the Caribbean Development Bank, St. George’s, Grenada

It is indeed a privilege for me to address this 48th Annual Meeting of the Board of Governors of the Caribbean Development Bank. On behalf of the Government and People of the Cooperative Republic of Guyana, I extend felicitations to the Government and People of Grenada, the Isle of Spice, for hosting this important meeting.

This meeting is convened at a time of positive outlook for the world economy. According to the International Monetary Fund (IMF), global output, which grew by 3.7 percent in 2017, is expected to improve to 3.9 percent, in 2018, with growth being more broad-based. This upward trend brings renewed hope for the developing economies of the Caribbean, many of which are still reeling from catastrophic hurricane damage, high debt burdens and declining living standards. Therefore, the time is opportune for such economies to implement structural and other reforms to anchor the recovery efforts and to secure regional resilience and prosperity.

In spite of both domestic and external shocks, Guyana has maintained its positive growth trajectory that has been evident for over a decade. In 2017,the economy recorded a growth rate of 2.1 percent, reflecting improved performances in the forestry and rice sectors. On the other hand, contractions were witnessed in sugar, and the construction and mining sectors. We continued to strengthen public financial management, with significant improvements recorded in both revenue administration and the capital expenditure implementation ratio. Further, we emphasized stimulating private sector activity in more structured ways, especially in light of the emergence of the oil and gas sector with its transformational potential and developmental impact on the economy.

The outlook for 2018 is very positive, notwithstanding further declines in the sugar industry. Real growth is projected to be 3.4 percent, slightly below the budgeted 3.8 percent, with increased output in rice, construction, manufacturing and services sectors. This robust performance is expected to continue into the medium term,with anticipated oil production, in early 2020,contributing to a dramatic increase in the Gross Domestic Product (GDP) of Guyana. The Government is aware of the need to strengthen institutions and broaden the economic base,so as to build a resilient economy that is capable of withstanding both external and domestic shocks. We are in various stages of preparation of pieces of legislation,which are aimed at guiding the management of oil revenues for the benefit of present and future generations.

Guyana has recently adopted a Public-Private-Partnerships (PPPs) Framework, which was laid in Parliament on April 26, 2018. The Framework provides a structured platform for the local and external private sector to meaningfully engage the Government in achieving the national development agenda. The formulation of the PPP Framework for Guyana is as a result of my Government’s proactive stance about obtaining value for every dollar invested, especially in the public sector investment programme (PSIP). Moreover, as Guyana rapidly approaches oil producer status, with the attendant massive inflow of new resources, the inclusiveness of all stakeholders in national development becomes a pressing imperative.

I am pleased that Guyana has been able to garner the support of the Bank to blend its resources with those of the United Kingdom/Caribbean Infrastructure Fund (UKCIF). Through this UKCIF/ CDB co-financing arrangement, Guyana has been able to expand the financial envelope to US$139 million, which will be used to realise waterfront renewal in Georgetown; upgrade the first phase of the much anticipated Linden to Lethem Highway; and construct a bridge across the mighty Essequibo River, at Kurupukari. These projects will be the impetus for the development of our water transport systems and linkingthe more developed Coastal Regions to the Hinterland Regions of Guyana. We look forward with much optimism to their realisation.

Almost a year ago, I had the pleasure of executing the agreement for the 9th Cycle of the Basic Needs Trust Fund (BNTF) Programme, which will see an estimated US$6.145 million being expended on projects and activities that contribute to inclusive and sustainable economic growth. This is an overarching goal of both my Government and the Bank. The suite of interventions is intended to reduce poverty in poor and rural communities, improve access to critically-needed services; and enhance the quality of life in remote and interior areas of Guyana.

In light of the catastrophic events that have had a devastating impact on the small island economies, it is time that we, as a people, begin to seriously consider the concepts of “Building Resilience” and “Building Back Better”. We must objectively dissect our failures, including our less than robust systems;our poorly designed and built infrastructure that continues to collapse in the face of adversity; and our people who seem unprepared in face of the onslaught of Mother Nature. We must develop focused and sensible counter strategies. We must continue to forge partnerships and synergies, and create stronger systems and governance structures to be better equipped to confront severe disasters.

I take this opportunity to applaud the Bank’s swift and decisive efforts in mobilising resources to assist hurricane-impacted islands. Guyana is especially pleased about the Bank’s ramping up of Technical Assistance Grants and other financing for improving institutional capacity and strengthening systems for disaster risk reduction in the Region.

With the continued challenges of accessing concessional resources in the Region, it is increasingly becoming important for the Bank and Member States to partner, in order to maximize the impact of development resources on improving the livelihoods of our people. We must, collaboratively, seek ways and means to ensure increased productivity of public spending in our Member Countries. Whilst Guyana salutes the steps taken by the Bank to improve portfolio performance throughout the Region, including extensive training in Public Policy Analysis and Project Cycle Management, a microscopic examination into the regional dilemma of poor project implementation needs to be undertaken, with a view to laying out robust mechanisms towards improving project delivery. While I applaud the Bank’s concerted efforts to strengthen its oversight functions, more ‘out of the box’ thinking would be needed, if the Bank is to maintain its commendable credit rating. All options need to be explored on ways to maintain this rating, including a careful study on the impact and implications of expanding the Bank’s membership.

Mr. Chairman, I conclude by reaffirming my Government’s resolve to deepen cooperation with the Caribbean Development Bank and fellow Member Countries; and reiterate our commitment to the ideals of the Bank and the Caribbean Community.

I thank you!

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