Opposition Leader, Bharrat Jagdeo on Friday objected to the Guyana government succumbing to Caribbean Community (Caricom) tariff rules, saying it would set a bad precedent and put the country’s manufacturing sector at grave risk.
“I heard some people have applied to Caricom for (Common External Tariff) waivers and they have got those waivers and that’s good but the moment you go down that route, the next time a Caricom country complains to the Secretariat they would say we are not giving the waiver so you have now put what was in our hands to execute- national policy- in the hands of the bureaucracy of the Caricom Secretariat,” he told the latest business luncheon of the Guyana Manufacturing and Services Association (GMSA).
Jagdeo, a former President from 1997 to 2011, also used the opportunity to knock the Guyana-based Caricom headquarters. “I must say it’s not a very healthy bureaucracy… and in the caprices of other countries and kill our manufacturing sector and we should be defending that; we should be helping. He suggested that the request for CET waiver on certain manufacturing inputs would impact on Guyana’s national interest.
The CET was designed by Caricom to protect domestic manufacturers from unfair competition by cheaper products from outside the region once a member state has the ability to satisfy the demand. The aim was also to assist Caricom producers to grow. In some cases, individual member states have applied to COTED for waivers if their demand is higher than the quantity that is being produced in Caricom or the price is uncompetitive.
The Opposition Leader’s remarks about the CET waiver on certain manufacturing inputs came just over month after the GMSA said the Guyana Revenue Authority’s (GRA) insistence on the payment of the regional protectionist tariff from April 1, 2016 was hurting manufacturers to the point of grinding them to a halt. Back then, GMSA President Eon Caesar said up until recently manufacturers had been allowed to import items on the CET non-exemption list duty free because they had been brought in as raw materials.
Jagdeo also slammed the government for failing to use fiscal, monetary and taxation tools to stimulate growth and bolster economic activities, while at the same time imposing taxes on small and large businesses. “We have the fiscal space and monetary tools and so we can do things in the short-term instead of taking away concessions from businesses,” he said. He said tax concessions to the private sector for the year so far have been reduced by GYD$5 billion and there was now a 16 percent Value Added Tax on heavy duty machinery such as tractors, combines and excavators that all contribute to the productive sector.
The former Guyanese leader instead charged that the David Granger-led administration has been pre-occupied with awaiting revenue from ExxonMobil’s offshore oil production that is expected to begin in 2020.
“The oil is Godot for them. They are waiting for Godot to come and solve all their problems of the world so every minister, everybody‘ we’re waiting for oil’. The government is in that mode. In the meantime, there is no long term plan,” he said in reference to Samuel Beckett’s play titled “Waiting on Godot.
Jagdeo further charged that government has for more than one year failed to provide a plan unlike his People’s Progressive Party Civic (PPPC) when it was in power from 1992 to 2015.
He chided government for not defining its Green Economy through programmes, policies, projects and funds. “There was none of that declined. It just cannot be a declarative statement,” he said.
The former Finance Minister said the future of Guyana’s investment and economic climate has to be more than having improved international rankings on doing business in the country, but overcoming challenges. He said Guyana’s economy could not be compared to the situation in Barbados, Suriname and Trinidad whose state of economies are vastly different. “Everyone of these countries has seen a deterioration of the terms of trade for the major exports and a sliding of their current account deficit,” he said. Guyana’s current account deficit is GYD$181.5 million in 2015 and was forecast to improve to GYD$116.9, and by mid-year it was GYD$40.9 and now expected to be GYD$72.9 million, largely due to a decline in oil prices that has caused Guyana to save more than GYD$250 million.