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Ramotar promises more bank licenses; frowns on tax reductions; rules out log export ban

President Donald Ramotar addressing a GMSA luncheon.

President Donald Ramotar on Wednesday announced that if re-elected next month his administration will grant licenses for more commercial banks and create more conditions for development financing.

“My intention is to issue more commercial banking licenses in the future once I am elected again,” he told a Guyana Manufacturing and Services Association (GMSA) Business Luncheon. “I think that is important because I feel that even though the banking sector has done extremely well and they work very closely with us on many projects, I still detect some amount of conservatism in them,” he said.

The last banking license was issued in the 1990s to Demerara Bank.

The Guyanese leader told business executives that his administration planned to invite “reputable” foreign banks to stimulate more competition and the lowering of interest rates.

Ramotar said his administration was not in too much of a hurry to open special development banks that are costly and bureaucratic but would find ways of offering low-interest financing for development projects. “We would be using more fiscal measures that we believe can serve the same purpose until we are able more to establish the specialized type of institutions,” he said.

Ramotar cited examples of reducing interest rates for mortgages and a women’s entrepreneurial scheme. “We would like to expend that experience into other sectors and we hope that we can do that with other sectors to stimulate small and medium-sized enterprises to grow,” he said.

While he said his People’s Progressive Party Civic will be unveiling its campaign manifesto in another few days, he used the opportunity to criticize the opposition coalition’s plan to reduce taxes and provide a lot of “freeness.”

“We will create a much bigger deficit, higher inflation and exchange rate instability,” he said. On the question of reducing taxes, he announced that that revenue generating mechanism would be reviewed constantly. The opposition coalition A Partnership for National Unity+ Alliance For Change (APNU+ AFC) has been promising a 10 to 13 percent increase in salaries for government employees and a hike in Old Age pensions to GUY$15,000 persons. APNU+AFC Presidential Candidate has also announced plans to lower the Value Added Tax, taxes and duties on new vehicles, and Income Tax but he has not given any figures. 

He noted that interest rates could be increased but the “we have to ensure that the macroeconomic stability.”If we find oil, you too may be surprised at what we can do. We can probably eliminate taxes,” he said.

The President also ruled the banning of the export of logs, saying that a number of countries have banned the import of value-added wood products. He said if log exports are banned the lives og hundreds or thousands of Guyanese could be negatively effected.

Ramotar again pledged that his administration would build the Amaila Falls Hydropower Station and build a deepwater harbour in the Berbice River if the incumbent People’s Progressive Party Civic (PPPC) wins the May 11, 2015 general elections. He said that constructing that hydropower facility was not a new idea but was well documented in the National Development Strategy (NDS) that was crafted by a broad-based team of experts after wide-ranging countrywide consultations.