Category: Press Releases

25 Sep
By: Tanika Jones 0

Minister of Finance’ Remarks at the Unveiling of NIS Commemorative Stamp for 50th Anniversary

Mr. Chairman

Board of Directors of the National Insurance Scheme

Management and Staff of the National Insurance Scheme

Representatives of the Media

Distinguished Ladies and Gentlemen:

 

Good evening!

I am very pleased to join you for the unveiling of this Commemorative Stamp. This commemorative stamp is a postage stamp, which is being issued to honor the 50th Anniversary of the National Insurance Scheme (NIS). Fifty years of service to the Guyanese citizens is indeed a significant milestone that is worth observing and remembering in a symbolic way. And what better reminder than this stamp! Congratulations are extended to the Board of Directors, Management and Staff of the National Insurance Scheme.

Distinguished ladies and gentlemen, your golden anniversary is worth celebrating. as the organization, over the years, has metamorphosed from the provision of basic benefits at a central location in Georgetown, to an expanded coverage for employed and self-employed contributors at locations across Guyana. Modern technology has also transformed the way you have been doing business, as compliance and reporting can be done via the internet and within a much shorter timeframe.

Mr. Chairman, last year, during my address to the staff on the Scheme’s 49th Anniversary, I briefly traced the origin of the NIS. As I recalled, the idea of establishing the National Insurance Scheme was conceived by the late Linden Forbes Sampson Burnham, who, at that time, was Prime Minister of Guyana and Founder-Leader of the People’s National Congress. He would later go on to become the first Executive President of the country. Back in 1969, that political party held a majority government and the Peoples Progressive Party was in opposition. Mr. Chairman, I recall this tiny, but important, bit of our history because the establishment of the National Insurance Scheme was done against the backdrop of strong opposition by the PPP.

Today, I shudder to think how the absence of a National Insurance Scheme would have impacted the standard of living of our retirees and senior citizens, who are now recipients of old age pensions and other benefits; and the employed and self- employed individuals who are still in the work force but who access various benefits of the Scheme, such as sickness, maternity and spectacles. The National Insurance Scheme, having evolved and in spite of its challenges, is a living testimony of the foresight and wisdom of the PNC and the ability of the Government that it led to make wise policy decisions that are beneficial to Guyanese citizens. It is apposite to note that 50 years later, the PNC is the major partner in the Coalition Government that is transforming the country, from coastland to hinterland, improving equity in the allocation and distribution of the country’s resources, and calmly guiding the shape of state in this tense period leading up to the General and Regional Elections. We shall overcome.

Distinguished ladies and gentlemen, our Government is acutely aware that access to social security is pivotal to the economic and social well-being of Guyanese; it is a fundamental human right enshrined in the United Nations Universal Declaration of Human Rights. The establishment of the National Insurance Scheme a mere three years after Guyana gained political independence from the Britain, in May 1966, was a landmark achievement. I want to assure you that our Government will continue to make every effort to keep the National Insurance Scheme relevant and viable, so that Guyanese can continue to enjoy bigger and better benefits.

As the Minister of Finance, with responsibility for general oversight and policy guidance to the National Insurance Scheme, I am aware of some of the challenges that the organization faces, in its efforts to maintain financial sustainability. Some of these challenges are similar to those faced by other National Insurance Schemes in the region. This fact was well documented in a 2016 IMF study that was conducted on Social Security Schemes in the Caribbean. Among the findings were that an aging population, slow economic growth and high unemployment were major contributors to the high actuarial deficit that social security schemes in the Caribbean faced. The report recommended a range of reform measures to urgently reverse the trend.

But let me hasten to say that I am not suggesting that all the reform measures proposed by the IMF are suitable for our country. Clearly, some of them can have a negative impact on the economic and financial position of eligible contributors and beneficiaries. Be that as it may, I enjoin the Board of Directors and Management to urgently review the Scheme’s sustainability plan and come up with country-specific solutions to address these challenges. I can assure you of our Government’s continued support, so tangibly exemplified by the issuance of debentures to offset the loss that emanated from the reckless CLICO investment.

Your 50th anniversary comes at an historic period in Guyana. The arrival of the Floating Production Storage and Offloading Facility (FPSO), of which I had the pleasure of visiting in the company of the First Lady, has brought us closer to that reality. We are all anxiously awaiting the arrival of first oil. The developments in the oil sector have made Guyana prominent on the world map, and the recent discoveries of Exxon+14 and Tullow+2, just a few days ago, has catapulted our country among the world’s top oil producing nations per capita.

These developments will have implications for the performance of the National Insurance Scheme. Oil production will propel significant economic growth in Guyana. Preliminary estimates for real growth in 2020 and 2021 are 33.5 percent and 22.9 percent, respectively. These lofty growth rates would leave behind the single digit rates achieved in the post-Independence period. There is no doubt that these impressive growth rates will translate into more contributions remitted to the NIS.

Oil production will also create employment opportunities at all levels of the supply chain. It is for you, Board of Directors, Management and Staff, to the seize the moment (carpe diem) to expand the Scheme’s revenue base and enhance your financial position. You must continue to build capacity and put the necessary institutional measures in place to ensure that all employers, employees and self-employed individuals are registered with the Scheme and their contributions remitted in a timely manner.

You have come a far way; you reached another milepost. There is more work to be done.

Thank you!

And now it is my distinct pleasure to unveil this commemorative stamp.

Read More
16 Jul
By: Tanika Jones 0

Remarks by Finance Secretary, Michael Joseph at opening of Supplies Bond – Ministry of Public Health

Brief Remarks On The Occasion Of the Official Opening of the

Newly Constructed Central Supplies Bond Of the Ministry of Public Health

July 10th 2019

 “Each of us is carving a stone, erecting a column, or cutting a piece of stained glass in the construction of something much bigger than ourselves”

Adrienne Clarkson

PROTOCOL

Madam Chairperson, Mrs. Michaella Abraham-Ali

First Vice President and Prime Minister, Hon. Moses Nagamotoo

Minister of Public Health – Hon. Ms. Volda Lawrence

Minister of Social Protection –Hon. Dr. George Norton

Auditor General – Mr. Deodat Sharma

Deputy Permanent Secretary, Ministry of Public Health – Mr. Glendon Fogenay

His Worship, the Mayor of Georgetown – Mr. Pandit Narine

Members of the Diplomatic Corps

Distinguished Ladies & Gentlemen

Members of the Media

Ladies & Gentlemen

Boys & Girls

GOOD AFTERNOON

I bring you greetings and best wishes from the Minister of Finance, Hon. Winston Jordan, who regretfully couldn’t be with us, as duty calls elsewhere, and so he has requested of me to deliver these brief remarks.

However, let me hasten to assure you, that the duty which has caused Minister Jordan to be absent from this event, has nothing to do with incarceration.

The commissioning of this state-of-the art CENTRAL SUPPLIES BOND of the Ministry of Public Health has been long in coming. It has replaced an old wooden structure of 1,248 square feet, easily prone to leakages and flooding, when it rained.

The old building stored medical and non-pharmaceutical supplies such as gloves, janitorial supplies, printing, promotional and other capital goods.

The physical condition of the old structure while proving inadequate in space to store the vast supplies required to service the seven (7) programmes of the Ministry of Health, also exposed the stored stock to deterioration, mold and mildew, fading and discoloration of stationary and inventory, caused by leakages and non-temperature storage control.

The ensuing damages to stock, reduced the lifespan of affected stores, and in extreme cases, made some affected stock un-usable, thereby delivering less value for money spent, and unnecessarily inflating budgetary expenditure.

These sub-optimal, inefficient and uneconomic outcomes, led to discussions between the Ministry of Public Health and the Ministry of Finance, resulting in the provision of budgetary support for the construction of this newly built state-of-the-art facility, at which we are now gathered to commission.

Constructed at a cost of 539 million dollars, this new facility is 11,520 square feet or almost 10 times its former footprint.

Fitted with an Office Alarm, Security and Voice Paging Systems, and modern air-conditioning, the floor space accommodates a staff room, conference room, kitchenette, documentation room, an accounts and secretarial department, and a records room.

Built of steel portal frames, with corrugated sheeting, reinforced floor with Terrazzo tiles, it stands to address the shortcomings of inadequate space and poorly stored inventory stock.

It is the expectation of the Ministry of Finance that this new facility will be used as intended, and that it will be well kept and maintained. We do hope that should we undertake an ex-post cost-benefit analysis in the future, that the economic, financial, social and environmental benefits will far out-weigh the financial outlay of 539 million dollars, expended to date.

It is said by Walt Disney, that; “you can design and create the most wonderful place in the world. But it takes people to make the dream a reality.”

And so, it would be remiss of me, should I fail to recognize the efforts of the main contractor, Mr. Ivor Allen, and his team of construction workers, the In-House Engineer of the Ministry, the Minister of Public Health – Hon. Volda Lawrence -, and her staff of the Ministry, who labored to see the dream of this state-of-the-art Central Supplies Bond becoming a reality on the premises of Lot 1, Mudflat, Kingston, Georgetown, in Region 4.

In closing, I wish to implore us all, to resolve to carve a stone, to erect a column, or cut a piece of stained glass in the construction and fashioning of a modern Guyana that can deliver the good life in our lifetime and for generations to come.

WITH THESE BRIEF REMARKS

I THANK YOU

Michael B. Joseph

Finance Secretary

Read More
11 Jul
By: Tanika Jones 0

Address by the Hon. Minister of Finance On the Occasion of the Launch of the Budget 2020 Sensitisation and Training Sessions

Address by the Hon. Minister of Finance

On the Occasion of the Launch of the Budget 2020 Sensitisation and Training Sessions

July 11, 2019 – Arthur Chung Convention Centre

Welcome to this very important session on the 2020 Budget Preparation. For those who understand budgeting, we would recognise that a budget cycle has a life of its own. There is a preparation stage within Budget Agencies, consideration by the Ministry of Finance at the budget hearings, proposals to Cabinet, then proposals to Parliament, followed by the Budget Speech, Parliamentary debate and consideration of theEstimates. After passage of the Budget, we move to the implementation of the Budget, which includes monitoring and evaluation to ensure that performance is being tracked.  Finally, we have the oversight and audit of the Budget and then the cycle repeats itself.

I have given that brief outline of the Budget cycle because, in this silly political season, you have politicians and wannabe politicians who are bent on creating mischief, seeking to whip up hysteria and confusion with the dissemination of fake news. Then, you have their acolytes and followers who exhibit Pavlovian behaviour. For those who do not know, that behaviour is named after the Russian physiologist, Ivan Pavlov, who, during the 1890s, was researching salivation in dogs in response to being fed. He discovered that any object or event which the dogs learned to associate with food would trigger the same response. It is called a conditioned response or a Pavlovian response. We have several persons in the business community, in civil society and other organisations who exhibit this type of behaviour, an automatic response conditioned by the signal from their master to react in a now familiar manner. So, like their master, they trot out the view that we should not start budget preparation because Elections are due, and that in so far that there is a government, it is only a Caretaker Government. Let it be known that our Constitution does not provide for a Caretaker Government. Parliament has not been dissolved; is still in session. And this Government, in spite of the successful passage of the No Confidence Motion, still retains a majority. It was only last night that someone from the Diaspora was saying to me, “Why don’t y’all get someone from the Government side to bring a Confidence Motion since y’all have the majority.” I never thought of that before, but it is food for thought.

Today we find ourselves, as is traditional, in the Guyana budget cycle, at the early stages of preparing Budget 2020 having concluded work on Volumes I and II of the Green State Development Strategy – Vision 2040 –, earlier this year. We now have a long term development strategy to guide our thinking in shaping the policies and programmes for our sectors. Later this morning you will be hearing more about the content of that Strategy. Many of you would have participated in the formulation of Vision 2040.At its core, is the realisation of a strategy that envisions “an inclusive and prosperous Guyana that provides a good quality of life for all its citizens based on sound education and social protection, low-carbon resilient development, new economic opportunities, justice and political empowerment.”

The core concepts within the GSDS are:

  • Transitioning to renewable energy,
  • Green towns urban public spaces,
  • Sustainable management of natural resources,
  • Green and inclusive economic diversification,
  • Building our human capital and institutional capacity,
  • Good governance, transparency and knowledge management
  • Resilient infrastructure

These concepts will guide our budgeting for 2020 and beyond.Next year is certainly a propitious one. Guyana is about to join the world of oil producing nations! This will mean substantially improved fiscal space, that is, room for spending substantially more on goods and services and the public sector investment programme. If we effectively manage the petroleum resources that are anticipated to flow from this new revenue stream, we will be able to accelerate the pace of economic transformation and development that hitherto we have yearned for but which has proven to be elusive to date.

In order to ensure good governance and transparent management of our petroleum resources, we have ensured that a carefully-considered legislative framework is in place. This framework has had the benefit of extensive consultations and advice.  Technical assistance has been sought to build capacity to operationalise this legislation and progresshas been made to ensure the transparent flow of resources from the oil companies to the Natural Resource Fund and into the National Budget takes place.You know, it is only a few days ago that I was forced to remark that we as a people have been so long in the doldrums that we do not know how to accept the fortune that has been gifted to us. Thus we wallow in defeatism and negativism, instead of celebrating and being happy for our improved economic position. Often, this state of affairs is led by some in the media. In this regard, a recent editorial in one of the daily newspapers was questioning the progress made to operationalise the Fund. This was after previous editorials in which they sought to impugn the validity of the passage of the NRF Act because it took place in the aftermath of the No Confidence Motion and in the absence of the Opposition. Well, my answer to that is that the Parliament was still in session and the Opposition chose not to turn up, which is typical behaviour.

The withdrawal rule from the Fund to the National Budget will allow for front loading of development spending while still retaining sufficient resources to be saved for future generations and to be used as buffer, given the fickle nature of oil prices. Over time it is expected that the investment of those savings will result in interest earned to feed into the National Budget long after oil is finished.

How do we ensure that we are ready to take advantage of these resources? First, we must develop the skill sets that can readily support the petroleum and non-petroleum sectors of our country. Every single Region must have a regional development plan that is able to realise the objectives of the GSDS in their own right. Plans of Action For Regional Development (PARDS) have already commenced with Region 10 and 9 being substantially advanced in terms of guiding their Budget 2020 interventions. We must use the lessons learned from the two experiences of developing the PARDS to accelerate the development of regional strategic plans in the eight remaining Regions.Both traditional and non-traditional sectors must be explored to take advantage of the comparative advantages that we possess as a nation. Supportive infrastructure and renewable energy must serve to catalyse the necessary development to transition the hinterland regions to high-performing regions, where service delivery can be comparable to the coast. Indeed, I look forward to the day when coastlanders can journey to the hinterland to live and work with the same level of anticipation as many have done to go to yonder shores. I look forward to the day when the high schools in Mabaruma, Kamarang and Parmakatoi are able to deliver the same quality of education as a top performing high school in Georgetown. I look forward to the day when the maternity patient is able to deliver her baby comfortably and safely in the hospital in Region 7, just as she would be expected to do in our national referral hospital.That is what we need to work towards; that is what we have to deliver; and that is what you, as Heads of Budget Agencies and senior officials in the public service, must reach for and work towards the transformation and development of our nation through every budget cycle. Surely, this is the only pathway to the good life, to which we all aspire.

Getting there is about rolling up our sleeves, putting our shoulders to the proverbial wheel and getting the work done.It’s about putting the systems in place and the institutional strengthening that is required. Addressing the data gaps in our respective agencies is critical to ensuring that we are able to measure our achievements, as we go forward, to determine, based on evidence, what is working and what is not; what needs to be reformed and what needs to be removed. And I am sure that many of these gaps have been highlightedbefore, since all of you have worked with us in preparing the Voluntary National Review of the SDGs.I urge you to continue consulting the stakeholders of your sectors as you prepare your budgets.

Strengthening our systems of monitoring and evaluation (M&E) continues to be a priority. The level of training in key concepts of M&E has been scaled up over the last three years. As a result, almost 700 public servants have been trained with the intention of them returning to their agencies and applying their newly acquired knowledge to their work and to ensure the successful implementation of each successive budget. This week, we commenced what I think is a first in strengthening our public investment management –the training of a core set of Budget Agencies on how to develop their project concept notes from a more scientific basis, so that we can ensure that projects coming into the budget are criteria-based and clearly demonstrate linkages to achieving a Green State.

We have continuously lamented the sloth of implementation of the Public Sector Investment Programme.A closer examination of the reasons reveals that it is a combination of poor management and ineffective planning, but, also, in many instances of civil works.Further, the absence of an adequate number of engineers has compromised the pace and quality of infrastructure development. In addition, acceleration of our PSIP has been strained by incapacity in the private sector. These problems imply a holistic approach to solving. One aspect of that solution must be improved conditions of service, salary and allowances. In that regard, salary improvements to attract higher number of qualified engineers to the central government is under active consideration; it is expected to be approved, shortly. Teacher remuneration has seen continuous improvement over the last few years as well as the salaries of public servants.All categories of workers have benefited fromsignificant reduction in income taxes and substantial increases in the income tax threshold.All of this has taken place in the context of low single digit inflation, rising economic growth and improvement in the social and physical infrastructure – roads, lighting housing, water, and so on. His Excellency has appointed two high-level committees to examine wages and salariesand allowances in the Teaching and Public Services. The one for the teachers is already up and running while the one for the public service is taking a little time to get going. The Government has already named its members to this Committee and we hope that it will get down to the important task, soon.Regardless, I can say with confidence that public servants will get an increase in wages and salariesthis year, and can expect a bigger increase in wages and salaries next year, after we would have won the General Elections.

However, increases in remuneration must be matched by improvement in performance and overall delivery of public services. Managers must manage and supervisors must supervise. Productivity must rise, if we are achieve a modern, competitive nation. It is difficult comprehending why we have to install electric time clocks to track the punctuality of workers and their comings and goings during working hours. And the tracking cannot only relate to the ordinary worker. It has to be enforced from top to the bottom. Too many senior personnel are featuring on Facebook and other social media during working hours, when they should be attending to the public or otherwise engaged in activities for which they are being paid. Irrespective of our impending new status, more money will mean nothing to us, will not result in our advancement, if we are not disciplined in our approach and outlook.

Above all, we must remember that we are public servants.This means that we are here to deliver quality service to all residents of Guyana.We must be driven by results, not consumed by process. Assessing the performance across all sectors is a critical component to ensuring that we stay focused on the target of achieving a diversified, resilient, low-carbon, people-centred vision as articulated by His Excellency President David Granger.

As a former Secretary to the Treasury of the US, Jack Lew, once said “The budget is not just a collection of numbers, but an expression of our values and aspirations.” So, I urge you to translate our national aspirations into effective results-based budgets.

In this politically charged environment, it is easy to become distracted or side-tracked. My admonition to you, my charge to you is to stay professional, stay focused. Leave the politics to the politicians. I am so happy that you turned in your numbers today, and that you eschewed the rantings of the political Opposition who were urging you not to follow the Budget Circular. Continue to work hard and believe. Three decades ago, we were a debt-ridden, pariah state. Today, we have been identified as the fastest growing economy in the world by NASDAQ. This glowing accolade was preceded by a very favourable assessment of our economy by the recent Article IV Consultation Mission of the IMF, and by the CDB and ECLAC. Guyana is on the rise, Guyana is on the moving forward in the right direction. You can feel it, you can see it. Just witness the influx of many people from Caricom countries and further afield, as they seek their fortunes here. It is for us, as Guyanese to unite among a common cause, put aside our differences and concentrate how we can share our country’s prosperity. The time is now! We either seize it collectively, or lose it individually.

Thank you!

Read More
18 Jun
By: Tanika Jones 7

IMF | Guyana: Staff Concluding Statement of the 2019 Article IV Mission

A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.

The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

A Staff team from the International Monetary Fund (IMF), led by Mr. Arnold McIntyre, visited Georgetown during June 3–14 to hold discussions for the 2019 Article IV Consultation. The team met with Prime Minister Moses Nagamootoo, Finance Minister Winston Jordan, Minister of Legal Affairs and Attorney General Basil Williams, Central Bank Governor Gobind Ganga, other senior officials, representatives from the private sector, banks, the opposition party, labor unions, and other stakeholders.

Economic growth strengthened in 2018 with broad-based expansion across all major sectors. Real GDP grew by 4.1 percent in 2018, up from 2.1 percent in 2017, led by construction and services sectors. Inflation remained steady at 1.6 percent at end-2018, on the back of stable food prices and exchange rate. For 2019, the mission projects real economic growth of 4.4 percent, driven by continued strength in the construction and services sectors ahead of oil production in 2020, and strong recovery in mining. The authorities do not foresee any significant spillovers from the crisis in Venezuela at present. However, the influx of migrants into the hinterland and rural areas could put socio-economic pressures on the local communities.

Weaker export performance and higher imports driven by high value imports related to oil production contributed to a weaker current account balance. In 2018, the current account deficit rose to 17.5 percent of GDP, from 6.8 percent in 2017. The deficit was largely financed by FDI related to the petroleum sector. Reserves stood at US$528 million in December 2018.

Public finances improved in 2018. The central government’s deficit was 3.5 percent of GDP, lower than the budgeted 5.4 percent of GDP. The better-than-expected outturn was largely supported by stronger revenues arising from the pick up in economic activity, as well as continued improvements in tax administration and the tax amnesty program which relaxed interest and penalties on payments of outstanding taxes. In addition, expenditure grew at a weaker pace due to slower capital spending as a result of capacity issues in both the public and private sector. In 2019, the fiscal stance is projected to be appropriately expansionary, at 5 percent of GDP, driven by significant need for infrastructure development and capacity building ahead of oil production.

Guyana’s medium-term prospects are very favorable. The commencement of oil production in 2020 presents an opportunity to scale-up capital and current spending at a measured pace over the medium term to address infrastructure gaps and human development needs, while attenuating debt sustainability concerns at the same time. The mission welcomes the passage of the Natural Resource Fund (NRF) legislation for managing the country’s natural resource wealth; it underscores the authorities’ commitment to fiscal responsibility. To ensure fiscal responsibility is achieved, the mission recommends complementing the NRF legislation with a fiscal framework that constrains borrowing and achieves a balanced budget in the near- to medium-term. To achieve this target, the annual non-oil deficit should not exceed the expected transfer from the NRF. This would ensure that excessive public expenditure will not lead to debt growing at the same time as the NRF accumulates. It is also necessary to preserve the spirit of the NRF framework, which appropriately aims to save part of the income from oil as net wealth for future generations. The pace of scaling-up public spending needs to be gradual to reduce bottlenecks from absorptive capacity constraints, avoid waste, and minimize macroeconomic distortions related to “Dutch” disease that has often inflicted economies experiencing sizable increases in resource-based income.

The mission supports continued efforts by the authorities to strengthen institutional, governance and management practices, which will also help reduce vulnerability to corruption. It commends the ongoing efforts in modernizing the revenue administration and strengthening the public investment management system. At the same time, the mission reiterates the importance of addressing the weaknesses identified in the 2017 Public Investment Management Assessment. Greater urgency is attached to these reforms ahead of the expected increase in public spending as oil production begins. The mission notes authorities’ intent to move to rigorous project selection and prioritization criteria within the context of the new long-term Green State Development Strategy. The authorities are committed to considering mechanisms to further improve fiscal transparency, including relating to the management of natural resources.

The mission encourages building on recent progress in strengthening transparency and governance. Guyana completed its first Extractive Industries Transparency Initiative (EITI) Report in 2019 and started implementing its recommendations to further enhance transparency in the extractive industry. In addition, the recent re-establishment of the Integrity Commission has resulted in over 50 percent of politically exposed persons (PEPs) and other required officers making declarations within the first year. Ensuring greater compliance over time with the asset declaration regime would underscore the authorities’ support and commitment to the UN convention against corruption. The mission also welcomes the progress made in strengthening public procurement, and encourages the authorities to ensure timely compliance with existing regulations and take further actions to fortify the transparency of the procurement system.

The authorities have indicated their concerns that the absence of a ring-fencing arrangement in the Stabroek Production Sharing Agreement could potentially affect the projected flow of government oil revenues. The rapid appraisal and development of multiple oil fields could affect the timing and amount of profit oil to be shared with the government from a producing oil field by allocating costs from various fields under development to the producing field. The authorities are developing strategies to mitigate such a possibility, including a national oil depletion policy to guide extraction and production and clearer ring-fencing rules for new investments.

The mission recommends that the authorities continually reassess the monetary policy stance to reflect changes in macroeconomic outlook or risks surrounding the outlook. The mission encourages exchange rate flexibility as part of the monetary policy framework, given the expected large and potentially volatile foreign inflows from oil production. It encourages the authorities to consider developing over the medium-term, supported by IMF Technical Assistance, the necessary infrastructure for a suitable monetary policy framework that facilitates economic growth and adjustment to oil price shocks while maintaining price stability.

The financial sector remains stable. The mission supports the authorities’ resolute efforts in implementing 2016 Financial Sector Assessment Program (FSAP) recommendations. Credit to the private sector grew by 4.0 percent in 2018, faster than 2.1 percent in 2017. The banking sector nonperforming loans (NPLs) to total loans ratio have fallen slightly to 11.9 percent as of end- December 2018, from 12.2 percent a year before, but remained high. Staff recommends an Asset Quality Review to examine banks’ credit risks and enhance financial sector stability. Four bills were approved by Parliament in 2018, covering deposit insurance, emergency liquidity assistance, bank resolution, and national payment system. The transition to Basel II regime (with some elements of Basel III) is on track for completion by end-2019. Staff encourages the authorities to implement the remaining FSAP recommendations, including eliminating reduced provisioning requirements for “well-secured” portions of NPLs and raising the minimum capital adequacy requirement to 12 percent.

Commendable progress has been made in strengthening the framework for anti-money laundering and counter terrorism financing, based on the 2017 national risk assessment. Guyana has been officially removed from the European Commission’s Money-Laundering Blacklist in February 2019 and is scheduled to undertake a mutual evaluation by the Caribbean Financial Action Task Force in 2022. The Financial Intelligence Unit (FIU) has been actively examining cases relating to suspicious transactions, money laundering, terrorist financing and criminal proceeds including those of PEPs, and is working towards greater collaboration with other global FIUs.

Structural reforms are needed to support economic diversification, and achieve inclusive and equitable growth. Infrastructure bottlenecks, skilled labor shortages, and weaknesses in electricity supply are major obstacles to growth. Staff supports the authorities’ proposed increase in investments to improve access to roads, electricity, and telecommunication services to enhance economic activities, including the hinterland. Simultaneous investment in upgrading the education system is critical and would enhance skills and employment prospects. To address skills gap and satisfy an expected increase in labor demand, Guyana could adopt more liberal or open immigration policies, including free movement of all categories of workers from other CARICOM countries. Promoting more flexible working arrangements could help increase female labor participation. Further regulatory and administrative reforms—including property rights and insolvency regime and reducing bureaucratic red-tape—would help strengthen competitiveness.

The IMF Executive Board is expected to discuss Guyana’s Article IV consultation in August 2019. The mission expresses its sincere thanks to the authorities and other Guyanese stakeholders for their warm hospitality, cooperation and candor.

 

IMF Communications Department
Media Relations
Press Officer: Maria Candia

Phone: +1 202 623-7100 Email: media@imf.org

Source: https://www.imf.org/en/News/Articles/2019/06/17/mcs061719-guyana-staff-concluding-statement-of-the-2019-article-iv-mission?cid=em-COM-123-38996

Read More
06 Jun
By: Tanika Jones 4

Remarks by Guyana’s Finance Minister, Hon. Winston Jordan’ at the 49th Annual Meeting of Governors of the Caribbean Development Bank

Mr. President, fellow Governors, Government representatives, Ladies and Gentlemen: I bring you cordial greetings from the dear, green and great land of Guyana. Allow me, please, to express my profound appreciation for the warm welcome and great hospitality extended by the Government and people of Trinidad and Tobago. To our gracious hostess and Chairperson of the Board of Governors, the Honourable Minister of Planning and Economic Development, Ms.Camille Robinson-Regis, I offer sincere congratulations on a well-arranged meeting.

Read More
18 Apr
By: Tanika Jones 0

Minister of Finance attends the First Conference of the Belt and Road Initiative Tax Administration Cooperation Forum BRITACOF2019

Minister of Finance, Hon. Winston Jordan attends the First Conference of the Belt and Road Initiative Tax Administration Cooperation Forum BRITACOF2019, in Wuzhen, China which takes place from April 18-20, 2019.

Guyana/China signed an MOU on July 27,2018 for the Belt and Road Initiative. It is the first South American country to do so.

This year Guyana and China will celebrate 47 years of diplomatic relations.

 

Read More