25th edition - ram & mcrae...focus guyana’s national budget 2015 ram & mcrae 1 august 2015...

25th Edition

Focus Guyana’s National Budget 2015

Ram & McRae i August 2015 Chartered Accountants

Copyright Notice: Focus on Guyana’s National Budget, © Copyright Ram & McRae 2015 The contents of this publication may be reproduced wholly or in part with due credit given to the Firm. Published by:

Ram & McRae Chartered Accountants Professional Services Firm 157 ‘C’ Waterloo Street, North Cummingsburg, Georgetown, GUYANA

Telephone: (592) 226 1072 / 226 1301 / 226 0322 Facsimile: (592) 225 4221 E-mail: [email protected] Website: www.ramandmcrae.com Facebook: bit.ly/ramandmcrae

Cover photo: Deepwater Horizon


Ram & McRae ii August 2015 Chartered Accountants

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Section 1 About this Publication 1

Section 2 About Ram & McRae 2

Section 3 Pre-Budget Comments 3

Section 4 Introduction 5

Section 5 Highlights 7

Section 6 Review 2014 9

Section 7 2014 Legislation 15

Section 8 Unfinished Business 17

Section 9 2015 Policy Issues and Targets 18

Section 10 The Government of Guyana Financial Plan 2015 24

Section 11 Who Gets What in 2015 30

Section 12 Budget 2015 Measures 34

Section 13 Commentary and Analysis 39

Third Term Decision 40

Supersized Government 44

Promises and Pitfalls of Oil 48

President Granger’s First One Hundred Days 51

Public Service Reform and Contract Employees 53

Section 14 Conclusion 55

Appendix A Legislation passed in 2014 57

Appendix B Selected Socio - Economic Indicators 65


Ram & McRae iii August 2015 Chartered Accountants

Index of Tables and Charts Description Section Page Sectoral Performance Review 2014 9

Key Performance Indicators “ 10

Per Capita Gross Domestic Product “ 10

Public Debt: - Domestic “ 11

- External “ 11

Balance of Payments “ 12

Commercial banks: - Financial rates “ 12

- Liquidity “ 13

Sector output “ 13

Principal & subsidiary legislation 2014 Legislation 15

Contribution to Gross Domestic Product by sector 2015 Policy Issues and Targets 20-22

Current Revenue by type Government of Guyana Financial Plan 2015 24

Internal Revenue “ 25

Expenditure Trends “ 25

Capital Revenue by type “ 26

PetroCaribe Fund Balance “ 27

Financial Operations of Central Government (Accounting classification) “ 28

Current Non-Interest Expenditure: By type of disbursing agency Who Gets What 2015 30

By Ministry / Department “ 30

By Region “ 31

Significant Changes in Estimates Among Ministries / Departments “ 31

Capital Expenditure between Ministries / Departments “ 31

Comparison of Ministries /Agency Offices Supersized Government 46-47


Ram & McRae 1 August 2015 Chartered Accountants

About this Publication

Focus on Guyana’s National Budget 2015 represents the twenty-fifth edition of this Ram & McRae annual publication which highlights, reviews and comments on the major issues surrounding and raised in the National Budget. The first Focus on Guyana’s National Budget was published in the year 1991. The publication was in memorandum format and consisted of nine pages. It has been published each year since that first publication and represents one of the longest continuous not-for-profit publications in Guyana. Each year, Budget Focus is circulated among politicians, the business community and the country representatives of international agencies operating in Guyana. But most importantly for us and the general public, is the wide circulation made possible by the publication, in the Stabroek News, of an abridged but comprehensive version of Focus. We thank the publishers for making this possible these past decades. The contents of this publication are not intended to take the place of the text of the Budget Speech or of a professional advisor. This analysis is prepared and distributed on the understanding that Ram & McRae is not engaged in rendering professional services to the reader. If financial or other expert assistance is required, please contact the Firm. Ram & McRae also offers the public a unique compilation of Guyana’s tax and business-related legislation (and advice thereon) including our Consolidated Tax Laws of Guyana (comprising Income Tax, Corporation Tax, Property Tax, Capital Gains Tax, Tax, Income Tax (in Aid of Industry), Revenue Authority, Financial Administration and Audit, and Investment Acts, and the double taxation treaties signed by Guyana). Other publications by the Firm, some of which are available on our website, are: Handbook on the Companies Act 1991 (out of print) Guyana Business Outlook Survey 1995-2010 (except 1998) Guyana Investors Information Package Focus on Guyana's National Budget 1991 – 2014 Plainly Business (formerly Business Page) (column/blog by Managing Partner available on

www.chrisram.net) Value Added Tax and Excise Tax Handbook which includes annotated copies of the legislation Annual Tax Planner



About Ram & McRae Established in 1985, Ram & McRae has distinguished itself in the field of professional services. Our client focus, commitment to professionalism, and continuous search for excellence, are the sources of our unchallenged reputation among professional firms. We offer a wide range of services include audit and assurance, accounting, tax, payroll, corporate/legal and other business support services. We have secured a premier place in the provision of taxation and advisory services to local and international business operators. Our continuing relationship with international partners provides us with access to worldwide resources and ensures that our clients benefit from business ideas, opportunities and solutions that place them in leadership positions in their industry. Accēdō Inc., a service company of Ram & McRae, offers a wide range of Human Resources services to bring potential employees and employers in contact with each other. Our partners Christopher L. Ram, FCCA, ACMA, ACIS, LLB, LEC Managing Partner and founder of the firm with overall responsibility for quality assurance aspects of the engagement, Christopher has in excess of forty years of experience in senior positions in international auditing firms. He was Financial Consultant to a regional government for several years where he was integrally involved in Budget preparation and Chairman of the National Insurance Board. Christopher is also a practising Attorney-at-law and currently serves as President of the Guyana Bar Association. Robert V. McRae, CPA, BSc., FLMI Robert has more than thirty-five years of experience in the areas of audit, accounting and insurance in Guyana and the United States of America. Robert also practises as a Certified Public Accountant in New York. Rakesh V. Latchana, FCCA, CMA Rakesh, who is also the Firm’s Chief Executive Officer, has twenty years of experience in audit and accounting and serves on the Technical Committees of the Institutes of Chartered Accountants of Guyana and the Caribbean. He ensures that the firm has a broad array of skills and expertise to meet the challenges faced by our varied clientele. Acknowledgements The Partners of Ram & McRae are truly grateful to have been again afforded the opportunity to contribute to society through this publication. We sincerely thank those members of staff who worked so assiduously to produce this publication in such a short period of time. These persons include Savitri Gobin, Jermaine McPherson, Chetram Singh, Kaziah Seunandan, Kenroy Wills, Melissa Ram, , Alexis Barry, Shirlon Benjamin and Glennis Rudder. Christopher Ram, Robert McRae and Rakesh Latchana August 13, 2015



Pre-Budget Comments

New Minister of Finance Winston Jordan in an exclusive interview with the state owned Chronicle proudly declared the theme for his 2015 Budget to be ‘A fresh start to the good life in a green economy’. He also reiterated that the Budget was being crafted around the ruling Coalition’s 100 day plan which was outlined in its manifesto leading up to the May 2015 elections.

Kaieteur News warned through its prognosticator Peeping Tom that Guyanese should not expect too much from the Budget and echoed the criticism of Raymond Gaskin over the fact that a 4 month budget had taken 3 months to prepare. Peeping Tom expressed support for the sugar industry with the original idea that since the sugar levy had denied the industry resources, the total levy paid should be treated as an interest free loan and returned to the industry.

The newspaper anticipated “a typical PPP budget” taking the approach of not making specific changes like increasing wages but making provisions for when the increases are agreed with the unions. It also expected a stimulus by way of public works, increased military spending and continued subsidisation of the Linden electricity tariffs.

Minister Jordan while acknowledging that the VAT rate and property taxes needed to be revisited appeared to be in agreement with this sentiment stating that a broader review of the entire tax system would be undertaken. A writer in Stabroek News took a different tone, accusing the government of reneging on its promise to address the VAT rate.

It is unclear how many pre-Budget consultations the Minister held. We know however, that he met with representatives from the Private Sector Commission, the Trades Union Congress and the opposition People’s Progressive Party/Civic (PPP/C). We did not learn much about what transpired in that latter meeting.

On the other hand, across the entire press spectrum we were regaled with details of the laundry list of expectations of the business community via its principal representative, the Private Sector Commission (PSC). That body expressed concern over the slowdown in the economy, the high incidence of crime, and the decision to pull government funds out of commercial banks. In addition to asking that the decision on funds be reconsidered and that police presence be increased, the PSC was hopeful that the budget would stimulate spending and that the government would inject spending into the economy by issuance of contracts.

In addition to the request for a stimulus package, the PSC also provided a long list of issues that they felt should be addressed. These included: liberalisation of the telecommunications sector, infrastructure: dredging Demerara Harbour, and improved road links to Timehri, Linden-Brazil, Essequibo-Bartica, tax reform, renewable energy including solar power and hydroelectricity and establishment of a solid waste management authority to explore converting waste to energy. Mr. Jordan promised to consider their submission, including the possibility of private public partnerships, but stressed that Amaila Falls in its current incarnation would not be considered.

One of the most controversial issues was the announced withdrawal from the commercial banks of several billions of dollars held by statutory bodies including the Central Housing and Planning Authority and the Guyana Geology and Mines Commission. The banks argued that any sudden withdrawal would create problems for their ability to lend and possibly lead to bad debts as borrowers are no longer able to pay their instalments. Past President of the Georgetown Chamber of Commerce and Industry on the television show Plain Talk disagreed with the PSC on the impact of the withdrawal of government funds from the banks,



pointing to the substantial profits enjoyed by the banks each year and their huge cash holdings which he felt should be used to finance investments in the economy.

On the question of sugar and other industries in trouble, Christopher Ram on his blog argued that bailouts of GuySuCo were unsustainable, receiving support from Mr. Urling who posited that bailouts financed by taxpayers should not be aimlessly included in budgets each year but should be based on a solid plan for the industry or entity’s recovery.

Dr. David Hinds, political activist and newspaper columnist, expressed the desire that among its other priorities the budget should be balanced with investment in people especially the poor, taking immediate steps to alleviate the widespread poverty in the country. On his wish-list were immediate investments in job creation in the short-term, increased wages for the working poor, opportunities for the creation of small business, and expenditure on improvements in education and health.

While increases for public servants were regarded as inevitable, the discussions came against the backdrop of controversy generated by a possible trial balloon by the administration about increases in ministerial pay. The situation was not helped by Prime Minister Moses Nagamootoo who opined, rather injudiciously, that ministers should be paid respectable salaries. The public fora were almost all opposed to any substantial increase. After a rather lengthy period, the matter was closed by an outright denial.

Ram & McRae once again carried out a mini-survey of the business community representatives to ascertain their expectations of the Budget by putting before them a small number of questions. We share the results as a yardstick against which to gauge the measures announced in the Budget. Here are the principal findings arising from the Survey:

Respondents were asked to rank seven items on a scale of 1 to 5, with 5 representing the highest priority. The reform of the system of granting concessions received the highest overall score at 4.17, followed by reduction in the rates of corporation tax (3.85) and personal income tax (3.62).

An increase in fiscal concessions for businesses ranked fourth (3.31, percentage which felt strongly that the PPP/C megaprojects should be given the highest priority was exactly equal to those who responded that they warranted the lowest priority. Overall, this item received the lowest priority, tied with Restriction on the use of subsidies as a social and economic instrument (e.g. subsidies to GPL, GuySuCo, Pensioners, Linden Electricity).

And apparently contradictorily, while 46% want an increase in fiscal concessions for businesses to be given high priority, 75% want the system of granting those concessions reformed.

Respondents were also asked to rate their satisfaction of four matters on a scale of 1 to 5, with 5 representing the highest level of satisfaction. Keeping promises in its 100 day plan and Consultation on budget 2015 were tied with a score of 3.08 (Neither Satisfied Nor Dissatisfied). Managing the economy and Handling crime were ranked low at 2.38 and 2.15 respectively.

In other words prior to the Budget being presented, Jordan received barely a passing grade for his management of the economy. One day later, private sector leaders and several other persons publicly expressed satisfaction with the Budget.



Introduction This is the first Budget of the Granger Administration, the first for the Eleventh Parliament and the first for Mr. Winston Jordan, perhaps the unlikeliest Finance Minister ever in post-Independence Guyana. A sound economist and technician, Mr. Jordan was plucked out of semi-retirement and appointed to the post when everyone thought former Finance Minister Carl Greenidge would be a shoo-in. Not that Mr. Jordan is not equipped to do a good job: in fact his training, temperament, style and experience in dealing with the National Budget equip him to be an outstanding Minister. Mr. Jordan holds a Master’s Degree in Economics from the University of Warwick and received training in Budgeting from Penn State and Harvard Universities in the USA. He has spent most of his professional life in the service of the Government of Guyana, at State Planning and in the Ministry of Finance as Budget Director. With all his expertise and experience the task of formulating and presenting the 2015 Budget was never going to be easy. The economy was inevitably cooling after what was reported as eight years of growth. The price of gold had taken a plunge and with it production; for some time sugar has appeared to be in terminal decline; rice which, like gold, has had an impressive run was always under threat from an unreliable, single customer; the bauxite sector under the control of the Russians and Chinese playing multiple roles of producer, seller and buyer; and forest products far too dependent on the export of logs. To add to his surprise and discomfort, Mr. Jordan found the Petro Caribe Fund he inherited exhausted; billions in rice debts unpaid; and had creditors knocking on his and the Attorney General’s door bringing substantial unpaid bills; the private sector calling for concessions and a stimulus package; and no doubt his colleagues making all kinds of competing requests. The 2015 Budget is the latest a national Budget has been presented in the forty-nine years since Independence. It is the direct result of the elections held on May 11, 2015 which brought its own unique technical problems. The Constitution and the Fiscal Management and Accountability Act have two provisions authorising expenditure in any year for which there is no Budget. In each of the first four months expenditure on the services of the Government of Guyana is permitted equivalent to one-twelfth of the preceding year’s budget. Thereafter, and if there is still no Appropriation Act, the Minister of Finance can authorise expenditure on the “public services” until three months after the National Assembly first meets. The first meeting of the National Assembly took place on June 11, so any spending authority comes to an end on September 10. That should allow enough time for the passage of the 2015 Budget and Appropriation Bill. Article 219 (3) has a qualification however on the pre-Appropriation Act spending. It seems that the Minister should, as soon as practicable, lay before the Assembly a statement of the expenditure so authorised. The statement has to be approved by the National Assembly before the expenditure is included, under the appropriate heads, in the next Appropriation Bill. While the Minister has tried to incorporate the pre-Budget expenditure into the Estimates, there is no statement of expenditure authorised by the Minister required by Article 219(3) of the Constitution. To compound the challenges for Mr. Jordan, President David Granger on taking office made the most substantial reorganisation of the Ministries and Departments, merging some, splitting others and creating a number of new ones. The Budget had to reflect all of these and, measured by the number of pages, resulted in the most voluminous Budget Estimates ever presented in Guyana. And there was too, as Guyanese kept reminding them, the fact that their elections manifesto contained promises for the five years as well as for the first hundred days. Some of them required the expending of real money.



If this Government was hoping for a honeymoon period, a combination of forces immediately disabused them of such optimism. They were told that sugar needed $16 billion to make it through the year; that the Petro Caribe Fund was broke with only US$0.8 million and outstanding payments of US$17 million; gold prices remained stubbornly low; the private sector was clamouring for a stimulus package and then, out of the blue, so to speak, a flooding like Guyana had not seen for ten years. This was a truncated Budget with almost eight months already passed. In addressing policies, Mr. Jordan spoke often about what is expected to year 2020. Budget 2015 could provide only some direction, requiring more a balancing act than a definitive marker. Our main beef with the Minister is his being designated Chairman of the much-maligned NICIL and equally seriously, Chairman of the Bureau of Statistics, making him lead batsman and scorer. This is simply not cricket. Subject to these, Ram & McRae believes that taking all things into consideration, Jordan has done a good job. There are campaign promises which have not been met and there will be strong criticisms. The opposition PPP/C was not in the National Assembly on Budget Day but is likely to come out in full force when the debate starts next Monday. Jordan and his team have done their job so far as the Budget preparation and presentation are concerned. His colleagues must now do theirs.



Highlights 2014 Facts Growth in Real GDP of 3.8% compared with a revised target of 4.5% and an initial target of 5.6%.

Growth was 5.2% in 2013.

Overall balance of payments deficit of US$116.4 million compared with a deficit of US$119.5 million in 2013, a decrease of 2.6%.

The 91-day Treasury bill rate increased to 1.67% compared with 1.45% in 2013.

Inflation rate of 1.2% compared with a target of 5% and actual rate of 0.9% in 2013.

Depreciation of the Central Bank rate of the Guyana dollar to the US dollar by 0.12%, while the

average market commercial bank mid-rates for the US dollar depreciated by 0.87%. The market mid-rates for the Pound Sterling, Canadian Dollar and Euro appreciated by 0.61%, 6.94% and 5.22% respectively, to December 2014.

Current Revenue of $145.7 billion compared with $136.5 billion in 2013, an increase of 6.7% and a

shortfall of $22.5 billion or 13.4% from budgeted. A 5% salary increase to all public servants, whose gross basic monthly salaries were greater than

$50,000. Persons with salaries that were equal to or lower than $50,000 were given an 8% increase. Exports and imports contracted by 15.1% to US$1.2 billion and 4.4% to US$1.8 billion respectively.

Current account deficit of US$385.18 million (2013: US$456.03 million); and net inflows on the capital

account of US$210.11 million (2013: US$314.76 million). Overall fiscal deficit of $34.93 billion compared with $27.03 billion in 2013 and budgeted amount of $32.44 billion.

Total external reserves at year end for Bank of Guyana of US$665.6 million, a fall from US$776.9 million in 2013, or 14.3%.

2015 Targets The initial inflation rate projected was 2.5% with a revised estimate of 0.5%.

Growth in Real GDP of 3.4%.

Balance of payments overall deficit of US$113.4 million.

Capital account to register a surplus of US$61.2 million compared with the revised and budgeted

2014 of US$210.1 million and US$426.2 million respectively. Current account to register a deficit of US$174.7 million.

Current revenue of $163.7 billion, an increase of 12.3%. There are no GRIF inflows budgeted. Overall fiscal deficit of the Central Government at $20.1 billion, 2.9% of GDP.

Overall deficit of the non-financial public sector at $19.1 billion or 2.8% of GDP.

Size of the Budget: $221Bn, 9.4% decrease



Overall deficit of financial operations from $63.2 billion to $50 billion, a decrease of 21%.

Capital expenditure to decrease by $11.6 billion to $39.4 billion.

Value added and excise taxes projected to increase by $3.8 billion to $69.5 billion. Customs and trade

taxes to decrease by $128.6 million.

See more in 2015 Policy Issues and Targets on pages 18 to 23. Ram & McRae's Comments 1. The Bank of Guyana reported Real GDP in 2014 of 3.9% while 3.8% was reported in the Budget.

2. Growth in real GDP for the first half of 2015 was 0.9% making the target of 3.4% challenging, if not

unlikely.

3. The $128.6 million decrease in Customs and trade taxes has been attributed to the undertaking given by the Government of Guyana to the Caribbean Court of Justice in the case brought by a Surinamese company to repeal the environment tax from July 31, 2015.

4. Budgeted Capital Expenditure of $81.2 billion but latest Estimate shows only $52.4 billion was spent. Major shortfalls were realised in several projects including the Low Carbon Development Programme - $17.5 billion, Information Communication Technology - $2.5 billion and Ministry of Public Works - $6.5 billion.

5. The overall deficit of financial operations (Accounting Classification) for 2014 was revised from $37.5 billion to $63.2 billion due mainly to a reclassification of the Petro-Caribe transactions – apparently repayments of the Petro-Caribe debt were not treated as debt repayments. Debt servicing as a percentage of revenue has moved from 6.3% to 23.2% due to the restatement.



Review 2014 Sectoral Performance

Source: All information from the Bureau of Statistics

The Table shows the budgeted growth for 2015; the Budget and Revised 2014 and Actual 2013.

2015 2014 2014 2013% % % %

Agriculture, Fishing and Forestry 7.0 5.6 3.3 6.3

Sugar 9.5 15.7 (29.6) (10.2) Rice 10.7 1.1 (1.1) 16.0 Other Crops 2.5 5.0 5.0 5.1 Livestock 9.8 3.6 10.0 16.5 Fishing (17.0) 3.7 (10.2) (2.3) Forestry 12.5 6.1 49.7 10.8

Mining and Quarrying 0.2 5.2 (12.8) (11.1)

Bauxite (12.5) 15.5 (5.0) (5.2) Other 2.0 3.9 (13.8) (11.8)

Manufacturing 3.0 5.2 (4.0) 11.6

Sugar 9.5 15.7 (29.6) (10.2) Rice (2.9) 1.3 (9.1) 29.5 Other Manufacturing 5.0 5.0 5.0 9.0

Electricity and Water 49.2 9.5 13.3 75.8

Construction (1.7) 14.0 18.4 20.8 Wholesale and Retail Trade 5.6 9.0 5.0 (4.2) Transportation and Storage 9.3 14.4 (0.6) 16.3 Information and Communication 39.1 10.0 10.0 7.0 Financial and Insurance Activities 3.9 19.5 6.5 20.6 Public Administration 0.0 11.9 11.9 10.2 Education 6.7 6.8 6.8 10.5 Health and Social Services 10.8 7.5 7.5 13.3 Real Estate Activities 8.2 5.0 5.0 9.9 Other Service Activities 14.9 11.0 11.0 8.7

Revised INDUSTRY

Budget Actual Budget



The Global Economy The Minister cited the estimated 2015 global growth of 3.3% from the July update on global growth by the World Economic Outlook, which is slightly lower than the 3.4% growth in 2014. The Minister pointed to the unexpected first quarter contraction in North America and Mexico brought about by the harsh winter and reduced capital spending in the oil sector. He identified lower commodity prices, tighter external financial conditions, structural bottlenecks and the rebalancing in China as core causes of the slowdown being experienced in emerging economies. Latin America and the Caribbean region is expected to grow by a modest 0.5% with Venezuela’s economy contracting by 5.5%. The Domestic Economy

Source: Annual Budget Speeches Per Capita GDP The per capita GDP saw continuous growth over the years with increase from US$3,496.3 in 2013 to US$3,606.4 in 2014 as shown below.

Source: 2015 Budget Speech Domestic Debt The Minister announced that domestic debt decreased by 20.6% in 2014, one of the highest decreases since 1994. The growth in the domestic bonded debt from 1994 to 2014 is shown in the following graph:

Target 2015 Revised 2014 Target 2014 Actual 2013

Real GDP Growth 3.4% 3.8% 5.6% 4.5%Inflation Rate 2.5% 1.2% 5.0% 2.6%

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

US$

Year



Source: BOG Statistics. The above graph includes only central government borrowing and therefore excludes any borrowings by public corporations and non-interest bearing debt, such as the Special Issue of Government of Guyana Securities by the Bank of Guyana. External Debt The table shows that over the period 1997 – 2014, the external debt has fallen by 20.7%. Year US$Bn Year US$Bn 1997 1.513 2006 1.043 1998 1.507 2007 0.719 1999 1.211 2008 0.834 2000 1.193 2009 0.933 2001 1.197 2010 1.043 2002 1.247 2011 1.206 2003 1.199 2012 1.359 2004 1.188 2013 1.246 2005 1.214 2014 1.200 Source: BOG Statistics and Budget Speech – All shown at December 31 Balance of payments The balance of payments showed a deficit of US$116.4 million in 2014, US$3.1 million lower than 2013. The balance on the Current Account was negative US$385.2 million, significantly better than both budgeted 2014 and actual 2013 amounts. Balance on the Capital Account amounted to US$210.1 million when compared to budget of 2014 of US$426.2 million. In 2015, the capital account is projected to register a disappointing US$61.2 million reflecting lower capital inflows and foreign direct investment.



Source: Estimates of the Public Sector (Vol. 1 Appendix K) Banking and Interest Rates There was a slight increase in the 91-day Treasury bill rate to 1.67% while the rate of interest on savings declined from 1.33% to 1.26%. The weighted average lending rate decreased by 0.30% to 10.86% still reflecting the wide spread which fuels the profitability of the banking sector. Most borrowers pay rates that are higher than the weighted average lending rate while the banks’ effective borrowing rate is lower than the savings rate as most demand deposit accounts earn no interest. Despite the spread, both loans and deposits have continued an upward trajectory. The following table shows the widening spread earned by the commercial banks as the financial rates continue to decline.

Source: BOG Statistics

Balance of Payments Budget Revised Budget Actual

Stated in US$ Mn 2015 2014 2014 2013

CURRENT ACCOUNT (174.7) (385.2) (448.1) (456.0)

Merchandise trade (net) (421.8) (624.1) (575.2) (499.8) Services (net) (178.3) (218.7) (257.5) (309.5) Transfers 425.4 457.6 384.6 353.2

CAPITAL ACCOUNT 61.2 210.1 426.2 314.8

Capital Transfers 24.1 4.4 18.8 7.3 Non - financial public sector (net) (126.2) 0.5 90.3 70.9 Private capital 217.0 263.0 345.0 217.7 Short term capital (53.8) (57.8) (27.9) 18.9

Errors and Omissions - 58.7 - 21.8

Overall balance (113.4) (116.4) (21.9) (119.5)

02468

10121416

Per

cen

tage

Year

T/Bill Rate

Prime LendingRate

Savings Rate



Source: BOG Statistics The Exchange Rate There was a slight depreciation in the value of the Guyana dollar to the US dollar by 0.16% (see Highlights on page 7 for changes in market rates for the US dollar and other currencies). Ram & McRae’s Comments 1. The output for several sectors stands out in comparison with the prior year as follows:

*Bauxite tonnes for 2013 was amended to reflect actual shown in the Bank of Guyana's Report

Source: 2014 and 2015 Budget Speeches and Bank of Guyana Annual Reports

Diamonds recorded a substantial increase of 56.6%, one of the highest seen in years. On the other hand, declines of 8.7 % and 19.5 % respectively were seen in the Bauxite and Gold industry.

2. Rice saw an increase of 18.6% and sugar followed close behind with an increase of 15.8% when compared to 2013. However, both key Agricultural subsectors are facing some real challenges with sugar’s cost of production unacceptably high and rice in danger of losing its major market.

3. The growth in Construction, Finance and Insurance Activity and Public Administration were almost

negligible and somewhat disappointing, while Education is expecting a decline of 0.8% in 2015. Electricity and Water and Information and Communication is expected to see the highest growth of 35.93% and 29.09% respectively while Transportation and Storage is slowly creeping up with expected

Description 2014 2013

Bauxite (tonnes) 1,563,563 *1,713,242 (149,679) (8.7) Gold (ounces) 387,508 481,087 (93,579) (19.5) Rice (tonnes) 635,238 535,439 99,799 18.6 Sugar (tonnes) 216,192 186,770 29,422 15.8 Diamonds (carats) 99,950 63,808 36,142 56.6

Change



growth of 9.96%. The Health and Social Services, Real Estate and Other Services Activities are expecting growth or no more than 3.9%.

4. The exchange rate of the Guyana Dollar to United States Dollars ended at an average rate of $206.50 at the end of 2014 a negligible increase which could become more significant if the economy does not improve in the second half of 2015.

5. Gross international reserves of the Bank of Guyana at 31 December 2014 amounted to $665.6 million

equivalent to 3.6 months of imports. As at 31 December 2013, the reserves stood at $776.9 million, the equivalent of 3.9 months of imports.



2014 Legislation The following Table shows by number the principal and subsidiary legislation passed in 2014: Type of Legislation Total Relevant to Business

Community Appendix Reference

Acts assented to 13 2 A1 Regulations issued 8 5 A2 Orders made 36 8 A3 Ram & McRae’s comments Thirteen Acts were passed and assented to in 2014 prior to the parliamentary recess and subsequent prorogation of Parliament on November 10, 2015. The Bill extending the life of Local Democratic Organs to August 1, 2015 was passed but not assented to by then President Donald Ramotar. His Government had tabled the Bill with a proposal for holding of Local Government Elections by December 1, 2014. These Local Democratic Organs which have been revived annually since 1998 must now be considered totally defunct. The two Acts of business significance include the Land Surveyors (Profession) Act 2014 which seeks to regulate the profession and the Deeds Registry (Amendment) Act 2014 which seeks to elevate the status of an agreement of sale. A total of twelve Bills died with the dissolution of Parliament in February 2015 including the following: 1. Amendments to the Anti-Money Laundering and Countering the Financing of Terrorism Act which did

not receive the support of the current Government when in opposition. The Bill was re-introduced and passed in 2015 with amendments by the Government.

2. Telecommunications Bill which was sent to a Special Select Committee and has been languishing in the National Assembly since 2010 and presented in various versions. Minister of Governance, Raphael Trotman announced in early August 2015 that Cabinet has approved a consultancy for the review of the Bill by late September 2015 so we can expect yet another version.

3. Local Government (Amendment) Bill for which former President Donald Ramotar withheld assent in

2013. The Bill was re-introduced and passed in 2015. Additional legislation passed in 2015 include the following: 1. Constitution (Amendment) Act 2015 and Fiscal Management and Accountability (Amendment) Act

which provides for several constitutional bodies to become a direct charge on the Consolidated Fund. 2. Former Presidents (Benefits and other Facilities) (Amendment) Act 2015 which provides for the

reduction in benefits given to a former president. There has been a discussion on whether the Act affects former Presidents Bharrat Jagdeo and Donald Ramotar. The considered opinion of Ram & McRae is that it does.

3. Customs (Amendment) Act 2015 to remove the Environmental tax on imported beverage containers

under a Consent Judgement of the Caribbean Court of Justice (CCJ). Guyana will pay US$6.2 million to Caribbean International Distributors Inc. (CIDI) in January 2016 following the ruling by the CCJ in May 2014 that the environmental tax, levied on CIDI, was inconsistent with the Revised Treaty of Chaguaramas. The Minister stated in the Budget Speech that Government would “consult with the



Guyanese people on re-instituting a tax that is more appropriate and takes into consideration, the costs borne by the society at large.”

The Minister in his Speech referred to legislation for electronic transactions, electronic commerce, digital signatures, and data protection which will be enacted by 2020! It is strange that in an age of e-commerce that Guyana is targeting five years to have such legislation completed. Commercial banks for example have already rolled out electronic banking while local vendors are already allowing purchases to be made from their website. Such legislation ought to be accelerated. Regulations Five of the eight Regulations issued have business implications, affecting the credit reporting, money transfer, broadcasting, mining and petroleum products (not production) sectors. The Broadcasting Regulations were reissued in 2014 one month after Chief Justice (ag) Ian Chang ruled that the $2.5 million broadcasting fee included in the 2013 Regulations which were deemed to have come into operation in 2012 should not be applicable to existing broadcasters. While broadcasting was not addressed in the Speech, Ram & McRae hopes that it will form part of the wider debate on the Budget. Orders There were thirty-six Orders made in 2014, the majority of which dealt with transfers of State property. Significantly, Order 16 of 2014 transferred one acre of land to China Railway First Group (Guyana) Inc. as a gift. On the same day NICIL had the same land vested into it from the Guyana Lands and Survey Commission. Ram & McRae does not believe that it is either proper or legal for the Government to have engaged in this transaction. Another Order of significance warranting severe criticism of the former Attorney General Mr. Anil Nandlall is Law Revision Order which brought into effect a new edition of the Laws of Guyana bearing the words L.R.O. 1/2012. Purchasers of these volumes did not receive value for money as several pieces of legislation were missing and those that were included contained significant errors. This Law Revision is another of the many examples of the waste and incompetence which have characterised various Justice Improvement Projects in Guyana. Order No. 1 of 2014, Conversion (Mineral Property) Exemption Order 2014, did not include a schedule to which it referred. It is surprising that this has still not been published.



Unfinished Business Normally in this section, we highlight issues and pronouncements from earlier years which remain unresolved. Of course it is not always easy to determine whether subsequent omission is any indication that the issue has been dropped or simply not completed. The change in government has dictated a change in approach for the 2015 Budget Focus. This year we believe it appropriate to highlight the items not addressed by the previous administration which are of continuing significance as well as the progress made on the 100 Day Action Plan of the current government. For the latter, please see Commentary and Analysis, President Granger’s First One Hundred Days. Matters of continuing significance are as follows: 1. Constitutional Reform: The APNU+AFC Coalition Manifesto promised the appointment of a

Constitutional Reform Commission within three months of taking office. That is not expected to be achieved within that time frame but the Minister of Finance did announce that the “Commission will be established to begin re-examining the Constitution in an open and inclusive manner, and reforms introduced where recommended.” Other announcements made include “establishing a Human Rights Commission and the Rights Commission Tribunal, and making all of the Rights Commissions strong and independent; resuscitating the Integrity Commission; reinforcing the Office of the Ombudsman; appointing the Public Service Appellate Tribunal; appointing a National Heritage Commission; and upgrading the National Assembly and Parliament Office, including the strengthening of the Committees of Parliament.”

2. Electoral Reform including GECOM and Campaign Financing: Strengthening of the electoral system and laws were mentioned but the Minister was short on specifics. The control which the political parties exert over GECOM prevents any movement on these issues and it falls on civil society to make strong representations on them.

3. Judicial review, including establishment of a Constitutional Court, implementing the ‘new rules’ and

dealing with the backlog of cases. Both the Chancellor and Chief Justice continue to act in their position.

4. Law Reform: Legislation such as the Companies Act and the Partnership Act warrant review while legislation is needed for areas such as Insolvency and Hire Purchase.

5. Law Revision: The price of the 2010 edition of the laws of Guyana remains unjustifiable and exorbitant

but the laws are now fully available online. New legislation also seems to be published online. Correcting the errors, omissions and other deficiencies in the printed edition and putting a system in place for periodic update should be addressed.

6. Contingencies Fund: Sums withdrawn from the Contingencies Fund in 2012 and not replenished remains in limbo while Supplementary Appropriation (No. 1 for 2014) Bill 2014 did not make it through the National Assembly. The AFC had made a formal complaint to the police in respect of ‘illegal’ spending of monies cut from the 2014 Budget by former Finance Minister Dr. Ashni Singh.

7. Accounting: To improve financial reporting, there is a need to consider the implementation of

International Public Sector Accounting Standards, high quality accrual based standards for use in the public sector, and a cash-basis standard for countries moving toward full accrual accounting.



2015 Policy Issues and Targets Policy issues Once again, as expected, the section of the Budget Speech from which this is taken takes up the largest part of a very long speech. The APNU/AFC Coalition introduced their first budget – “A Fresh Approach to the Good Life in a Green Economy” with the assurance that long term development is expected for all the people, whether they are domiciled in urban or rural, hinterland or isolated areas. The new Government recognises that Guyana would not develop if the people are not allowed to participate meaningfully in the affairs of the country. The following principal issues were discussed: 1. Green Economy: The government sees as a point of reference for building a Green Economy, Article 36

of the Constitution which mandates sustainable extraction of our natural wealth. It will require systems that ensure that the management and preservation of resources and the utilisation of the proceeds generated to help diversify the economy. No specific initiatives were mentioned that would ensure the achievement of these goals.

2. Establishment of a Sovereign Wealth Fund: This is intended to act as a stabilising force in the economy

when prices fluctuate and will also cushion the possible inflationary effects of a sudden large inflow oil revenues. A Sovereign Wealth Fund will also require specific legislation so that it can carry out the much broader investment functions for which it has been designed.

3. Promotion of a knowledge driven government and industries: This involves upgrading the information

and communication technologies and promoting local innovative services that can be exported and utilised to help capitalise on the country’s unique position as the gateway between South America and North America. An enhanced ICT capability will also assist the service delivery capabilities of the government. The Minister promised liberalisation of the telecommunications sector and updating of legislation to address data protection and electronic commerce and transactions to facilitate the transformation.

4. Education: Improved educational tools and content will be achieved through the use of technology with

distance learning and online courses playing significant roles in developing the sector. The distribution of laptops to the sector is planned but the number stated can in no way fulfil the requirements of the system. There was a failure to address the woes of the University of Guyana which is in crisis and needs attention.

5. Health: Universal health care for all will be pursued and national patient record and health surveillance

systems are the two significant initiatives that will be undertaken to improve the sector. The cost and the platform to be utilised for achieving these goals were not addressed.

6. Crime: A Public Security Plan, establishment of a command centre and resuscitating of CCTV feeds are

among the measures identified to fight crime. Emphasis will be placed on the utilisation of technology to enhance the capability of the police. While this is a desirable component of policing, the basic infrastructure for its achievement does not exist and cannot be constructed in the near term. A plan to address immediately the basic deficiencies in manpower and training in crime prevention and response techniques may have more of an immediate impact in combating the current crime situation.

7. Management of the Extractive Sector: The Minister indicated that a policy is to be developed to address:

licensing and contracting, fiscal framework, capacity building, transparency and accountability,



environmental management and measurement indicators. The government also promises diversification of the economy to ensure that it does not become totally dependent on the extractive industries. A successor conservation agreement will also be pursued with Norway.

8. Agriculture: Modernisation and diversification are seen as necessary steps to expand the sector and

moves will be made towards increasing value added production and manufacturing. No specific incentives were provided to assist with the transformation of the sector. The government will await the findings of the Commission of Inquiry on sugar before any decision on its future is made. Exploring new markets for rice and providing incentives for value added production were some the main objectives mentioned. Technical and infrastructural support was also promised for other agricultural products, livestock and fisheries with a view to increasing exports of products other than sugar and rice by 25% in five years.

9. Tourism: Creating a must see tourist destination is seen as a means of capitalising on the potential of the

sector. The government will double the marketing budget allocation, and create events to attract visitors and give them an enhanced visitor experience. With a dedicated Tourism Minister the sector is expected to expand rapidly.

10. Public Infrastructure: New air, road, drainage and river master plans will be developed to support a

national transport and drainage and irrigation policy. The objective is to create easier access between the coast and the hinterland and also creating a transshipment hub to our hemispheric neighbors. New roads and a fixed bridge across the Demerara River are among the projects designed to upgrade rather than just maintain and repair existing infrastructure.

11. Energy: While recognising the need for clean, reliable, affordable energy the government is not prepared

to go ahead with the Amaila Falls hydropower project since it is not financially feasible as it is currently configured. Paradoxically however the government is proposing to spend $220.3 million on the Amaila Falls Access Road in 2015. The government will consider alternatives such as wind, solar and bagasse as well as the possibility a large joint hydropower project with Brazil in the Mazaruni area.

12. Unemployment: A draft of a national youth policy has been completed and this is intended to address

the staggering 40% unemployment level among Guyanese youth cited by the Caribbean Development Bank.

13. Doing Business in Guyana: Government plans to make it easier for businesses to operate by removing

the bureaucratic bottlenecks and inefficiencies inherent in the current system. Initiatives such as establishing a Small Business Development Centre, a Credit Guarantee Scheme, an Interest Payment Facility and a Low Carbon Grant Scheme are intended to stimulate investment. It is hoped that the mechanics of implementation of the multitude of initiatives will be carefully crafted so as not to create an even greater bureaucratic boondoggle.

14. Water: Re-establishment of the National Water Council, implementation of the Dakoura Creek

Watershed Protection Plan and a new Non-Revenue Water Reduction Plan, rehabilitation works throughout the country, overhaul of the Shelter Belt facility and building new treatment plants are some of the actions seen as necessary for ensuring access to safe reliable potable water.

15. Governance: A Constitutional Reform Commission will be established to reexamine the Constitution.

This is a major commitment and a litmus test for the government. The Constitution of Guyana provides for referenda and the government may want to pursue such a route if the PPP/C appears uncooperative or obstructive. The Constitution also requires the National Assembly to establish a Parliamentary Standing Committee for Constitutional Reform but the government wishes to pursue reform by way of a



Constitutional Reform Commission which is more wide-ranging. Meanwhile we believe that the government should move to ensure that all constitutional bodies are established and functioning. It is hoped that the matter of the Imperial Presidency will be addressed once and for all. Other independent institutions to be introduced or revived include the Human Rights Commission and the Rights Commission Tribunal, Integrity Commission, reinforcing the Office of the Ombudsman, Public Service Appellate Tribunal, and the National Heritage Commission.

16. Audit and accounting: In order to support the new culture of accountability and transparency an

assessment will be made of the capability and adequacy of the existing government accounting system, In addition the Audit Office will implement the fourth phase of the project intended to strengthen and modernise its processes which will bring professionalism and respect to a department tarnished and hobbled by conflicts of interest.

17. Financial Sector Reform: At the request of the government the International Monetary Fund and the

World Bank will be carrying out a Financial Sector Assessment Program to assess the resilience of the sector as well as to review the adequacy of the regulatory and supervisory framework.

18. Public Administration Reform: Standardised strategic planning will be implemented throughout central

government along with enhanced evaluation and monitoring capability so that regions can be assessed using key performance indicators. At the end of the first term a national performance report will be presented to the House.

19. Tax Reform: A committee will be identified to pursue tax reform with a mandate to provide a

comprehensive fix that will result in transparency, predictability, promotion of investment, national competitiveness and removal of distortion across sectors. Organisational problems with the Guyana Revenue Authority have also been identified and will be addressed. This is optimistically expected to be completed by year end.

20. Tender Board Reform: Financial support has been received from the IDB to implement a project to

strengthen and overhaul public procurement, an area of significant corruption and leakage of public funds.

Targets Overall real growth is projected at 3.4% in 2015 with the non-sugar economy and the sugar economy projected to grow by 3.8% and 1.7% respectively. The following graph presents contribution to GDP at 2006 prices by various sectors:



Source: Estimates of the Public Sector The primary industry groups are addressed separately below. In the other sectors, Transportation and Storage Activity recorded the highest average growth of 9.41% over the five years to 2014. Growth in 2015 is expected to decrease to 6.3% from the 13.7% growth seen in 2014. The Construction sector recorded average growth of 6.55% for the five years to 2013 and jumped to 18.0% in 2014, after which a significant decline to 0.3% in 2015 is anticipated. Growth in other areas is expected at 1.2% in 2015. Agriculture, Fishing and Forestry

Source: Estimates of the Public Sector The Rice sector recorded the highest growth of 9.90% over the five year period to 2014 and a growth of 10.7% is estimated for 2015. However with the problems surrounding the Petro-Caribe deal with Venezuela, rice is under severe threat and its rapid decline can only be averted if new markets are found. The fishing industry had very different results from that recorded by the rice industry. Over the five year period to 2014, the fishing sector experienced a decline of 3.41% over the years and a further decline is expected in 2015 to 1.9%. Agriculture, fishing and forestry sector recognised a stable increase over the years of 2.75% for the five year period and 5.6% and 4.7% for 2014 and 2015 respectively. The other crops overall growth for the five year period to 2014 was 2.25%, 8.8% growth was achieved for 2014 and 4% is expected for 2015. Mining and Quarrying



Source: Estimates of the Public Sector During a five year review to 2014, Gold saw the highest growth of 4.37% when compared to the Bauxite and the Other Mining sectors of 2.36% and 1.95% respectively. Even though it saw an overall increase for the five year period, 2014 saw a decline in Gold of 19.4%, when compared to 2013. Growth is expected in 2015 of 27.8% and Other Mining is also expected to grow in 2015. Other Mining saw five year growth of 1.95% with growth in 2014 of 35.3% reversing earlier declines. Bauxite and Mining and Quarrying saw a five year increase of 2.36% and 3.61% respectively over the five year period to 2014. In 2015, Bauxite is expected to decline by 5.7% while the Mining and Quarrying sector is expecting growth of 0.6%. Manufacturing

Source: Estimates of the Public Sector A 3.2% growth is projected for 2015 in Other Manufacturing while a 1.7% growth is expected in Sugar Manufacturing. Monetary Policy & Inflation The rate of inflation (Urban Consumer Price Index – Georgetown) for 2015 is projected at 2.5% compared to the revised for 2014 of 1.2%. Food inflation in 2014 was 2.1% with the three years to 2013 registering 1.97%. Prices for Transport and communication decreased in 2014 to a rate of 0.6% compared to an increase of 2.55% to 2013. Medical and Personal Care inflation in 2014 was 4.8%. Footwear and repairs registered a 7% decrease. Balance of Payments The Minister projects the overall deficit on the balance of payments to increase to US$113.4 million compared with US$116.4 million in 2014. On the trade side, merchandise exports are projected to decrease by 2.6% to US$1.1 billion, however merchandise imports are expected to fall by 13% to 1.6 billion. With net imports of services at US$178.30 million, and private transfers of US$425.40 million, a net deficit of US$174.65 million is projected on the current account. The capital account is projected to have a surplus of US$61.22 million in 2015 (US$426.20 million in 2014). In this account, a net inflow of US$90.83 million is expected from medium and long term capital while a net outflow of US$53.75 million is expected on short term capital.



Ram & McRae’s comments 1. The Minister of Finance has presented a very bold, ambitious programme which will require great

commitment from and coordination with his fellow ministers if its goals are to be achieved.

2. Ram and McRae finds the emphasis placed on governance and accountability refreshing and hopes that all the proposals to bolster the institutions needed to support these efforts will be pursued with unrelenting fervor.

3. Many plans and ideas have been presented and it is incumbent on the government to ensure that the

persons responsible for implementation and execution are identified quickly and given deadlines for presentation of completed action plans. Someone with appropriate authority should be identified as the person responsible for monitoring the implementation of the various programmes and initiatives.

4. As we pointed out in 2014, there is a need for additional data on the components of GDP as for example Bauxite is the only sub-sector shown separately under Mining and Quarrying with gold, diamond and others being presented as one. The combination of Footwear with Repairs in the inflation data was also noted as not being useful.

5. Proposals to improvement at the Bureau of Statistics are welcome but the planned release of the final report from the 2012 Census in the second quarter of 2016 warrants review.

6. While the theme of the Budget involves a Green Economy very few of the projects or targets could be

considered green-specific. The President’s earlier announcement of lower duties on new vehicles and higher duties on old vehicles received no mention.



The Government of Guyana Financial Plan 2015 The Government's projected Financial Plan for 2015 is summarised and tabled on page 28 of this Publication. The current balance projects a surplus of $11,711 million, a decrease of $1,782 million or 13.2% over revised 2014. After capital receipts and expenditure, the plan projects an overall deficit of $49,953 million compared to a deficit of $63,246 million in 2014, 50.1% of which is financed by external borrowing. The main elements of the 2015 Plan are: Total current revenues are projected to increase by $17,926 million to $163,652 million or by 12%. Of this, the Guyana Revenue Authority is expected to bring in revenues of $143,253 million or 87.5% of total revenue, an increase of $7,363 million or 5.4% over 2014.

Analysis of current revenue by type

Source: National Estimates (G$ millions) Of the GRA’s collections, the Internal Revenue is projected to bring in $60,405 million compared with $56,725 million in 2014, a 6.5% increase compared to an 8% increase in 2014, while Value-Added and Excise Taxes are expected to earn $69,522 million compared to $65,710 million in 2014, an increase of 5.8% compared to 7% increase in 2014. Collections by the Customs and Trade Administration are anticipated to be $13,326 million, a decrease of $129 million or 1% compared to a 3.9% increase in 2014.



Analysis of Internal Revenue by type

All amounts shown are actual except 2014 and 2015 being revised and budgeted respectively (G$ millions)

Total Current non-interest expenditure is projected to increase by $18,783 million from $127,494 million to $146,277 million for 2015. Personal emoluments of $45,235 million represent an increase of 6.9% or $2,930 million over the revised figures for 2014.

Expense trends from 2002 to 2015

All amounts shown as actual except 2013 and 2014 being revised and budgeted respectively (G$ millions) Capital revenue and grants in 2015 are projected to increase by $4,197 million to $7,474 million of which HIPC and MDRI will contribute $1,485 million while Project and Programme funds are also projected to increase by $4,072 million.



Analysis of capital revenue by type

Source: National Estimates (G$ millions) Capital expenditure of $39,417 million represents a projected decrease of $11,597 million or 22.7% over revised 2014 of $51,013 million. The big ticket items of capital expenditure include the ICT project on which a further $2,631 million will be spent in 2015, $194 million on Basic Needs Trust Fund, $390 million on the provision for tax system, bond, fence, sheds, furniture and equipment for the Guyana Revenue Authority, $1,060 million will be expended on Low Carbon Development Programme and $378 million for the provision of buildings, purchase of vehicles, office furniture and equipment for the Guyana Elections Commission. Additional items include Amerindian Development Fund for the development of projects and programmes to the sum of $287 million, completion, construction and rehabilitation of drainage and irrigation canals and pump stations to the sum of $2,051 million and provision for the upgrading of roads for $1,242 million. The sum of $347 million was also allocated to the Amaila Falls Access Road although the government is not keen on continuing with this project which was fathered by the previous administration. We also address the allocation of current and capital expenditures and the Amaila Falls Access Road funds allocation in Who Gets What in 2015 on . Interest expenditure is projected to increase by 19.5% or $925 million. Domestic interest is projected to increase by $172 million or 11.1%, while interest on external debt is projected to increase by $753 million or 23.6%. The principal element of debt repayments is projected at $29,721 million (2014: $4,954 million), made up of domestic debt repayments of a projected $35.4 million (2014: $35.5 million), while external debt repayments are projected to increase to $720 million. During 2015, domestic and external debt service as a percentage of current revenue decreased to 18.2% in comparison with 19.9% in 2014 revised. The projected overall deficit of $49,953 million is proposed to be financed by external borrowings of $25,286 million and from domestic sources of $24,667 million. Ram & McRae’s Comments Even with the current slowdown in the economy, the projections anticipate a 12% increase in revenue with tax revenues contributing a significant portion of the increase.



On the expenditure side we note that current non-interest expenditure, a lot of which will have to be financed by borrowing, increased by almost 15%. The current state of the economy does not allow for significant cuts in expenditure but it is hoped that less reliance will be placed on deficit financing in future. Since 2002 interest expenditure has been declining slightly and has been reasonably flat over the past four years as a result of the debt forgiveness and various restructurings that we have been beneficiaries of. During the same period capital expenditure showed steady increases until declining relatively sharply in 2007, then inexplicably climbing steadily from 2008 through 2012 at the height of the world financial crisis. From 2012 on there has been a steady and consistent contraction in capital expenditure reflecting the low level of investment that the country has been able to attract. On the other hand current non-interest expenditure fuelled by deficit spending has had a steeply and unsustainable upward trajectory. While the government’s plan relies heavily on tax revenues, the Minister expressed some very strong concerns regarding the independence, integrity and structure of the Authority. Indeed even as the Budget was being presented a large number of senior staff were on leave. Tax expertise is only acquired after several years of training and experience. While the government may have good cause for significant change, it must make sure that the change process itself is properly managed. Historical balances owed to Venezuela under the Petro Caribe initiative are illustrated below:

Source: Bank of Guyana Annual Reports and Budget Speech 2015

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2007 2008 2009 2010 2011 2012 2013 2014 May2015

US$

'000

Years



Financial Operations of Central Government (Accounting Classification)

Source: Estimates of the Public Sector 2012 to 2015 (G$ millions)1

1 Debt Repayment and Financing restated for prior years. Budget 2014 Total Financing should total $61,609.1, details not available.

Budget Revised Budget Actual Budget Actual Actual 2015 2014 2014 2013 2013 2012 2011

CURRENT REVENUE 163,651.6 145,725.8 168,190.3 136,494.8 162,777.6 130,228.6 120,916.1

1.1 Guyana Revenue Authority 143,252.5 135,889.7 135,255.2 126,509.8 125,735.9 118,334.0 111,409.0 1.1.1 Internal Revenue 60,404.8 56,725.4 55,970.9 51,674.6 50,449.7 48,621.7 47,244.2 1.1.2 Customs & Trade 13,326.3 13,454.8 13,694.4 13,175.9 14,035.5 12,862.9 11,117.8 1.1.3 Value Added and Excise Taxes 69,521.5 65,709.5 65,770.0 61,659.3 61,250.7 56,849.4 53,046.9 1.3 Other 20,399.1 9,836.1 32,935.1 9,985.0 37,041.7 11,894.6 9,507.1

CURRENT EXPENDITURE 146,276.8 127,494.1 128,292.8 115,947.7 112,491.8 108,379.1 92,546.6

2.1 Personal Emoluments 45,235.1 42,305.6 42,965.2 38,489.0 39,408.1 34,793.9 31,345.8 2.2 Other Goods and Services 45,000.7 40,106.2 41,822.6 37,528.2 38,612.1 34,175.6 33,688.3 2.3 Transfer Payments 56,041.0 45,082.2 43,504.9 39,930.5 34,471.6 39,406.6 27,512.5

INTEREST EXPENDITURE 5,663.9 4,739.1 5,606.4 4,615.1 5,639.4 5,219.5 6,471.3

3.1 Internal 1,716.6 1,544.9 1,568.9 1,748.8 2,220.1 2,587.2 4,041.8 3.2 External (Cash) 3,947.2 3,194.2 4,037.5 2,866.3 3,419.3 2,629.2 2,429.6

CURRENT BALANCE 11,711.0 13,492.6 34,291.2 15,932.0 44,646.4 16,633.0 21,898.1

CAPITAL REVENUE & GRANTS 7,473.6 3,275.9 14,320.3 7,798.8 12,335.8 12,676.8 12,640.2

5.1 Grants 6,468.6 3,275.9 14,320.3 7,798.8 12,335.8 12,676.8 12,640.2 5.1.1 HIPC & MDRI 1,484.7 2,364.2 2,381.4 713.3 1,229.5 1,044.0 1,044.5 5.1.2 Project and Programme 4,984.0 911.7 11,938.9 7,085.5 11,106.2 11,632.8 11,595.7

CAPITAL EXPENDITURE 39,416.8 51,013.6 81,193.6 50,144.2 85,659.0 56,441.5 50,116.3

DEBT REPAYMENT 29,721.1 29,000.7 29,027.0 36,363.5 5,050.2 4,637.8 4,966.8

7.1 Internal 35.4 35.5 35.4 1,010.4 1,009.9 1,010.7 1,010.1 7.2 External (Cash) 29,685.6 28,965.2 28,991.6 35,353.1 4,040.3 3,627.0 3,956.6

OVERALL BALANCE (49,953.4) (63,245.8) (61,609.1) (62,776.9) (33,727.1) (31,769.5) (20,544.7)

TOTAL FINANCING 49,953.4 63,245.8 37,536.0 62,776.9 33,727.1 31,769.5 20,544.7

9.1 External 25,286.1 36,752.3 25,956.4 8,749.1 27,627.3 30,043.3 15,223.5 9.2 Domestic 24,667.3 26,493.5 11,579.6 54,027.0 6,099.7 1,726.2 5,311.2

Total Domestic and External DebtService as a % of Current Revenues 21.6 23.2 20.6 30.0 6.6 7.6 9.5

Particulars



The Accounting Classification of the Financial Operations of the Central Government show alarming ratios of Domestic and External Debt Service as a percentage of current revenue. Actual 2013 was as high as 30% falling to 23.4% in 2014 and is budgeted to be 21.6% at the close of 2015. By contrast Actual 2011 and 2012 were 9.5% and 7.6% respectively. The alarming ratios are a direct result of the unavailability of the restatement figures for these years. As stated in the footnote to the table above, a variance of G$24,073 million was reflected in the 2015 Estimates of the Public Sector, Volume 1 for Budget 2014 between the figure stated for Overall balance of $61,609 million and the Total financing of $37,536 million. It was explained that this variance represents the borrowing of funds from the PetroCaribe Fund by the previous administration to fund other entities and the restatement figures are not available since previously the PetroCaribe debts were never included in the external debt balance.



Who Gets What in 2015 Current Non-Interest Expenditure In this section we consider how the budgeted expenditure is allocated among the principal Ministries, Departments, Regions and Programmes. In view of the reorganisation of Government, we combined agencies as necessary to allow for a meaningful comparison.

Analysis of expenditure by type of disbursing agency

Source: National Estimates (G$ millions) Central Government's non-interest current expenditure (employment costs, statutory expenditure and other charges) for the year is budgeted at $146.3 billion which is 14.73% more than the revised budget 2014. The Ministries/ Departments with the most significant allocations are:

G$Mn %* G$Mn %* G$Mn %*Ministry of Finance 21,281 14.55 25,155 19.73 25,057 19.53 (15.40) Ministry of Agriculture 16,553 11.32 10,793 8.47 10,317 8.04 53.37 Ministry of Public Health 15,822 10.82 14,103 11.06 14,154 11.03 12.19 Ministry of Education 13,252 9.06 13,112 10.28 13,254 10.33 1.07 Ministry of Public Security 11,128 7.61 9,276 7.28 9,237 7.20 19.97 Ministry of Social Protection 9,953 6.80 9,508 7.46 9,640 7.51 4.68 Guyana Defence Force 8,609 5.89 7,392 5.80 7,273 5.67 16.46 Guyana Elections Commission 5,547 3.79 1,639 1.29 3,236 2.52 238.44 Ministry of Presidency 4,505 3.08 4,046 3.17 3,893 3.03 11.34 Ministry of Public Infrastructure 4,439 3.03 2,497 1.96 2,502 1.95 77.77

% Inc./(Dec)

* Percentage of total current non-interest expenditure

Budget 2015 Budget 2014Ministries/Departments

Revised 2014



The regions with the most significant allocations are:

G$Mn %* G$Mn %* G$Mn %*No. 6 East Berbice/Corentyne 4,650 19.05 4,100 19.23 4,056 19.24 14.64 No. 4 Demerara/Mahaica 3,909 16.01 3,386 15.88 3,319 15.74 17.76 No. 3 Essequibo Islands/West Demerara 3,401 13.93 2,962 13.90 2,933 13.91 15.97 No. 2 Pomeroon Supenaam 2,572 10.54 2,290 10.74 2,235 10.60 15.08 No. 10 Upper Demerara/ Upper Berbice 2,440 10.00 1,991 9.34 1,980 9.39 23.23 No. 5 Mahaica/Berbice 1,876 7.69 1,692 7.94 1,663 7.89 12.81 * Percentage of total regional allocation

% Inc./(Dec)

Budget 2015 Budget 2014Revised 2014Region

Significant changes from the previous year's latest estimates are provided for in the following Ministries/ Departments:

Budget 2015

Revised 2014

Budget 2014

G$Mn G$Mn G$Mn G$Mn %Ministry of Finance 21,281 25,155 25,057 (3,874) (15.40) Ministry of Agriculture 16,553 10,793 10,317 5,760 53.37 Ministry of Public Health 15,822 14,103 14,154 1,719 12.19 Ministry of Public Security 11,128 9,276 9,237 1,852 19.97 Guyana Defence Force 8,609 7,392 7,273 1,217 16.46 Guyana Elections Commission 5,547 1,639 3,236 3,908 238.44 Ministry of Presidency 4,505 4,046 3,893 459 11.34 Ministry of Public Infrastructure 4,439 2,497 2,502 1,942 77.77

Ministries/DepartmentsDifference

Capital Expenditure Central Government's capital expenditure for the year is budgeted at $39.4 billion which is 22.7% below revised 2014 and 21.2% of total 2015 expenditure. The Ministries/Departments with the most significant capital expenditure allocations compared with the latest estimates for 2014 are:

G$Mn %* G$Mn %* G$Mn %*Ministry of Public Infrastructure 13,309 34 13,368 26 19,876 24 (33.04) Ministry of Communities 6,344 16 10,475 21 10,929 13 (41.95) Ministry of Agriculture 4,342 11 4,662 9 5,440 7 (20.19) Ministry of Finance 3,973 10 4,740 9 22,301 27 (82.18) Ministry of Presidency 3,079 8 1,339 3 3,979 5 (22.61) Ministry of Education 2,325 6 2,846 6 3,076 4 (24.41) * Percentage of total capital expenditure

% Inc./(Dec)

Budget 2015 Budget 2014Ministries/Departments

Revised 2014



Highlights from Minister’s Speech The Minister in his speech highlighted the following allocations: Educational facilities $33.0Bn Rice $23.0Bn Health facilities $23.2Bn Public safety and security $21.0Bn Roads and bridges $13.0Bn Sugar $8.2Bn

Drainage and irrigation $5.7Bn Water supply system $2.9Bn Information technology $2.6Bn Housing $1.9Bn Sea defence structures $1.4Bn Air and river transport $1.1Bn

Ram & McRae’s Comments

1. The sum of $13 billion is allocated for enhancing needed infrastructural development to roads and bridges and creating new road linkages of major highways.

2. The Government is not in favour of the Amaila Falls Hydroelectric Project as it is currently configured and it appears that they may not proceed with the project. Expenditure of $347 million is allocated for the construction of Amaila Falls Access Road. We are unsure of the reason for this allocation since it appears that the hydroelectric project will be abandoned. In fact, the Minister in his Budget Speech reported that “…it would not only be irresponsible, but a downright criminal act of deception, were we to proceed with the Amaila Falls”.

3. Dredging of the Demerara and Essequibo Rivers and much needed rehabilitation of stellings located at Georgetown, Parika, Leguan, and Bartica are estimated at $644 million.

4. The major changes within several of the Budget Agencies are summarised below: The Office of the President, the Public Service Ministry and Ministry of Natural Resources and

Environment are replaced by the Ministry of Presidency. The Ministry of Amerindian Affairs is replaced by the Ministry of Indigenous Peoples’ Affairs. The various programmes under the Ministry of Tourism, Industry and Commerce are now allocated to

two new ministries: the Ministry of Tourism and the Ministry of Business. The Ministry of Public Works is replaced by the Ministry of Public Infrastructure. The Ministry of Culture, Youth & Sport is now merged with the Ministry of Education. The Ministry of

Education also includes several new programmes. The Ministry of Local Government and Regional Development and the Ministry of Housing and Water

are replaced by the Ministry of Communities. The Ministry of Labour, Human Services and Social Security is replaced by the Ministry of Social

Protection. The Ministry of Home Affairs is replaced by the Ministry of Public Security and while some functions are

transferred to the new Ministry of Presidency.

5. The Budget Speech does not mention the Guyana Elections Commission (GECOM) but the rising cost for the administration of elections is extremely troubling. Guyana now ranks among the countries with the most expensive elections yet GECOM is unable to:

(a) deliver timely results of elections (b) make recommendations on campaign financing (c) weed out ineligible candidates



(d) offer reassurance of local government elections Incredibly the 2015 current expense allocation for GECOM at $5.547 billion is more than 125% of the current expenditure of the Ministry of Public Infrastructure and 69% of the budget of the Guyana Police Force. These numbers demand that GECOM exercise strict management of and control over expenditure as well as maintain readiness for elections whenever they are called.



Budget 2015 Measures

Section 6 of the 2015 Budget Speech contains twenty-nine paragraphs covering 15Budget measures. Only some of these carry an estimated cost and a number of them have not inconsequential compensating savings. We now look at those measures and offer our comments.

1. Amendment to the First Schedule of the Customs Act.

The fishing sector will benefit from exemption from Customs Duties on fishing boats and supplies used in fish/seafood and aquaculture. This exemption is expected to result in lost revenue of $100.5 million.

Toshaos in approved Amerindian Communities shall be exempt from Customs duties on motor vehicles and ATVs.

We are concerned that such measures are very susceptible to abuse and corruption. For example, the measures to target Toshaos will not necessarily help the entire community if the Toshaos engage in exploitative practices. A better option would be to grant any concessions to vehicle(s) owned by the community and used by the Toshaos for official business.

To overcome some of the dangers the Government should put in place objective measures to regulate the granting and oversight of the concessions.

2. Amendment to the Excise Tax Regulations 2005

Exemption from Excise Tax on motor vehicles for eligible members of the Joint Services. Motor vehicles and ATVs for Toshaos and supply of motor vehicles under a contract between the Government of Guyana (GOG) and taxable persons will also benefit from the exemption.

It is not specified who would qualify as “eligible members” and this will need clarification. There needs to be a clear justification for concessions to any group.

3. Amendment to the Income Tax Act Cap. 81:01

Substitution of the word “shrimp” with the word “prawns”. This amendment removes the export allowance on prawns and by implication allows it for shrimp.

This could become a definitional issue revolving around size. There is a view that this whole business of export allowance is Anti-World Trade Organisation, the reason for its abandonment by Trinidad & Tobago several years ago. We also wonder whether this was the only area warranting review given that the Schedule was last amended in 1997.

4. Amendment to Value Added Tax Act 2005

The amendment to the Act will see an assortment of items now being zero rated. These items are as follows:

“Yogurt, cereals, fresh carrots, milo and ovaltine, nestum, mustard and mayonnaise, locally-produced fruit, locally-made chow-mein, vinegar, locally-made uncooked pasta, ketchup, chicken



sausages in packets, locally produced Chinese sauce, baking powder, liquid detergent, household cleaning agents, and computer printers for non-commercial use.”

Since the removal of VAT reduces the invoice price, only exploitative practices by traders, that is increasing selling price by 16%, would prevent any price reduction to the consumer. The Minister projects the loss of revenue from this measure to be $680 million.

It would be noted that this measure does not meet the commitment of an immediate phased reduction of the VAT rate and (emphasis ours) the removal of VAT from a food and other essential items. We are concerned about the tag ‘locally produced’ on any item given the decision last year by the Caribbean Court of Justice in respect of Community sourced products.

Careful drafting of the legislation is necessary to avoid problems in implementation.

5. Tax exemption to small and Medium Scale Miners

Eligible gold miners will be exempted from the payment of custom duties on fuel, matting, ATVs, jack hammer drills, flex hoses, expanding metals, pumps, pump housing, impellers, shaft and engines.

This was a response to the pleas from the sector for relief and also a commitment in the One Hundred Day Action Plan. Like the relief to the fishing sector and the Toshaos, such concessions are subject to abuse, the avoidance of which would add significantly to the cost of regulating them. Still, it is hoped that this measure will provide enough of a fillip to ensure survival of the many the smaller operators.

It is our view however that concessions are not a permanent answer to volatility in commodity prices. Would the miners be prepared for the Government to reverse its position if the price for Gold recovers? Additionally, gold miners are suspected to be some of the largest tax evaders in the country and issues such as smuggling, illegal immigration and trafficking in persons carry a serious cost.

6. Mortgage interest relief

The Minister announced that Mortgage Interest Relief will now be treated as a deductible item against chargeable income rather than a reduced interest cost for all eligible persons. The impact is that fewer first time homeowners will now benefit from full relief on their interest, resulting in higher borrowing cost. Individuals who may have taken significant loans may experience difficulty and there may be a consequential effect on housing construction.

7. Amendment to the Income Tax Act Cap 81:01 National Insurance contributions by employees will now be tax deductible. The cost is estimated at $1.3 billion annually. This measure will result in a net increase in the disposable income of all workers. An employee with gross earnings of $180,000 will benefit $2,870 being the highest beneficiary in a gross salary scale from $45,000 to $250,000. This measure is effective from January 1, 2015 which means that adjustments will need to be made to avoid overpayments to and refunds by the Guyana Revenue Authority. This measure along with the allowance for Mortgage Interest Relief is a step away from the flat allowance in place for more than twenty years.



8. Reduction in the Berbice Bridge Toll The Berbice Bridge Toll will be reduced from $2,200 to $1,900, a 13.6% decline for passenger cars and by 10% on all other vehicles. The reduction takes effect from September 1, 2015. This measure is being financed by a Government subsidy and was described by the Minister as the first of a phased reduction. 9. Old Age Pensions and public assistance

The Minister announced a $3,875 per month increase in Old Age Pensions, moving the amount from $13,125 to $17,000. At the same time, the monthly subsidy of $2,500 and $990 for GPL and GWI payments respectively available to all pensioners is being withdrawn. Public assistance increased by $600 compared to 2014 from $5,900 to $6,500.The increases will be effective from September 1, 2015.

The gross increase in the OAP represents an increase of 30% over 2014 if the GPL and GWI subsidies are ignored. However when the full extent of the measures is considered the real increase is 2.9% to those who currently benefit from both the electricity and water subsidies. We understand that less than one in three pensioners benefit from the subsidies so the number of persons who will benefit from the 30% increase is considerably greater than those who will receive the more modest increase.

With eligible persons numbering 42,397 pensioners, the monthly increase is likely to amount to $164.3 million.

10. Salary increase

The Minister announced that the basic salary of public servants would be $50,000 from July 1, 2015. Using a minimum wage of $39,540 the Minister calculated an increase of 26.4% to earners in that group.

By some quirk of administration, only persons in the public service prior to 2014 were in receipt of the 2014 minimum wage of $42,703 per month. Those who joined later received the 2013 minimum wage. Accordingly, the annualised increase for persons in these two groups is 26.4% and 17.1% but since the increase only takes effect from July 1, the effective 2015 increase is 13.3% and 8.85%.

11. Hourly Rates for Part-time Sweeper Cleaners

$312 or 54% increase in the hourly rate will be paid to the approximately 1,000 part-time cleaners.

This increase is likely to put pressure on the National Minimum wage of $212 per hour.

12. Withdrawal of NIS Subsidy

The minister announced that the 1% subsidy on contributions to persons earning up to $50,000 per month is being withdrawn with effect from September 1, 2015.

When the measure was announced in 2013, the then Minister of Finance Dr. Ashni Singh estimated that it would cost the Government $215 million per annum. The abolition would therefore amount to a savings of a similar sum. In making the announcement Minister Jordan referred to the measure as being introduced in 2003 when in fact it was 2013.



Since the tax benefits of deducting the NIS contributions would only affect those persons earning more than the tax threshold of $50,000, the withdrawal of the subsidy will be a cost to those earning below $50,000.

The private sector may be forced to compensate employees for this loss if they continue to pay wages below those in the public sector. Sixty percent of the withdrawn subsidy would be borne by employers.

13. Trade Unions

Trade unions will now benefit from an allocation of $11 million to assist with in-country training programmes designed to enhance the performance of public servants.

This measure removes a sore point of contention between the current and previous Administrations.

14. Uniform Assistance Programme

Uniform allowance voucher has increased by $500 or 25% from $1,500 in 2014. The increase is projected to cost $337 million and will benefit approximately 167,000 students.

In 2014 the PPP/C Administration granted each child in a public nursery, primary or secondary school a sum of $10,000 and estimated a cost of $2 billion. That facility is discontinued and constitutes a savings..

15. Georgetown Restoration Programme

$300 million has been earmarked for the Restoration of Georgetown Programme, to roll out an intensive clean-up campaign and to assist in the enforcement of laws on littering. In 2014 a sum of $500 million was allocated to clean up Georgetown.

There is no City Council and it is not clear how the programme will be executed. This subsidy to the city while necessary should be tied to specific achievement targets and accountability so that the government will receive value for money. The significant clean up exercise which came with the swearing in of the new Government seems to have cooled.

16. Community Infrastructure Improvement Programme

$542.7 million has been provided to fund a remodelled Community Infrastructure Improvement Programme (CIIP) with an aim of enhancing aesthetics and infrastructure of communities.

Properly managed this could benefit us all while creating much needed employment for a relatively small segment of the significant unemployed population.

17. Sustainable Livelihood and Entrepreneurial Development (SLED)

The minister announced $115 million to promote micro and small scale enterprises to create opportunities for the disadvantaged and the youth.

If this allocation is spent wisely it could have long lasting benefits to many communities struggling with high levels of unemployment.



The mechanism for awarding the payment will have to be carefully worked out to ensure it is properly targeted and to ensure accountability and transparency.

18. Linden Enterprise Network

The re-introduction of the Linden Enterprise Network (LEN) has seen the Minister announcing a $155 million for SME financing to re-energise business activity in Linden and its environs.

While this is much needed, it will take a lot more investment to bring sustained economic revival to the area. Cynics could see this as repayment to an area that is considered a traditional stronghold of one half of the coalition.

Overall comments

It is not unusual that Budget measures have winners and losers, those who gain comparatively more and those who benefit comparatively less. This Budget is no different.

Ram & McRae believes that Minister Jordan has made a good start in attempting to address some of the pressing needs of the less fortunate Guyanese. For the measures for which costing is provided the cost is approximately $4,195 million. We are unable to determine and pronounce on the value of the savings but given the state of the public finances the measures are welcome. It would be a pleasant surprise if the measures result in a net gain to the Treasury and benefit the target persons and groups.



Commentary and Analysis The purpose of this section is to draw to the attention of policy makers the challenging issues faced by the country, whether arising out of the Budget presentation or otherwise. Where we consider certain matters of special importance we may even repeat them, as we have done in the past with the NIS, Inequality, the University of Guyana, and the state of our democracy. Over the past couple of years we addressed the threat of Venezuela arising from our dependence on that country for the supply of oil and the purchase of our rice, the Amaila Falls Hydro Project, the Travails of the NIS, Inequality, the University of Guyana, and the Court’s decision ruling it unconstitutional for the National Assembly to cut the Budget. That decision, arising out of the 2012 Budget has been appealed but that appeal is languishing before the country’s under-worked Court of Appeal. Last year we addressed the reform of the Judiciary but that appears to have fallen on deaf ears. Indeed, in recognition of the constitutional principle of separation of powers, the Courts have been made financially autonomous. The Minister of Finance has announced the intention to prescribe rules of accounting to make such bodies accountable to the taxpayers and the public which finance them. It is left to be seen how effective those measures will be in the absence of wider reform including the composition of the Judicial Service Commission and the administration of the courts. On the other hand, and we take no credit for this, we are gratified that the Minister of Finance has acknowledged our society’s responsibility for succeeding generations soon after we dealt with the Public Trust Doctrine and that Budget 2015 has made some serious efforts to address the plight of the poor. Because this is a truncated budget, this section addresses only five items as follows:

1. Third Term Decision

2. Supersized Government

3. Promises and Pitfalls of Oil

4. President Granger’s first One hundred days

5. Public Service Reform and Contract Employees



Third Term Decision On July 9, 2015 Ian Chang, Chief Justice (ag), sitting as the Constitutional and Administrative Division of the High Court, gave his decision in the case Cedric Richardson v. the Attorney General of Guyana and the Speaker of the National Assembly. Attorneys Mr. Shawn Allicock and Ms. Emily Dodson appeared for Richardson while then Attorney General Anil Nandalall appeared in person while Attorney-at-Law Mr. Roysdale Forde appeared for the Speaker. Both attorneys Nandalall and Forde made submissions and cogent arguments in the case but strangely, the 37-page Decision cited not a single reference to any of those submissions or arguments. It is instructive to note further that while this case was all about Parliament’s powers to make laws, Mr. Chang did not once address Article 65 of the Constitution which provides that “Subject to the provisions of this Constitution, Parliament may make laws for the peace, order and good government of Guyana.” That Article was examined extensively in a highly respected decision of the Guyana Court of Appeal in A.G. v. Mohamed Ally (1987) 41 WIR 176 CA Guyana and was described by then Chancellor Massiah as words which “do not define and delimit the categories of legislation which Parliament might properly enact, but merely state in compendious formulation the repleteness of Parliament’s legislative authority”. Compounding the error of omission, the decision also ignores the Constitution’s specific authority to Parliament to alter the Constitution contained in Article 66 which states that “Subject to the special procedure set out in article 164, Parliament may alter this Constitution.” Mr. Chang has demonstrated a tendency to dissect and examine a single word of the Constitution – as he did in the Budget Cut Case - but yet ignores an entire Article or two! If that omission was bad, a statement purportedly factual was worse. On page 8, the acting Chief Justice writes that “The articles of the Constitution having received the favourable vote of the electorate in a referendum, represent the direct vote of the people.” That is simply not true. The 1980 Constitution was never put to the electorate. In fact, the 1978 Referendum, the results of which were described by Professors James and Lutchman “as among the most corrupt results ever in an election type exercise” was to remove an entrenchment clause in the 1966 Constitution to allow a National Assembly imposed on the people to make the 1980 Constitution. But Mr. Chang also ignored the submission by the then Attorney General on the history of the Amendment and the words of the Leader of the House Mr. Reepu Daman Persaud in introducing Bill 14 of 2000 which was passed and assented to by then President Bharrat Jagdeo as Act 17 of 2000. This is what Persaud said: “This Bill broadens the scope of democracy and removes certain powers which are considered dictatorial.” In the same debate, Moses Nagamootoo, PPP/C M.P., said “By limiting and defining the term of the Presidency to two terms ... This is good, both for mobility and for reinvigorating of our society so that we can have this type of approach to our politics where we cannot say we have.... the notion of a President for life.” At the very least, the Court should have offered some explanation for not considering these words in the light of the case of Pepper v. Hart [1993] AC 593 which permits reference, under certain circumstances, to statements made in the legislature when attempting to interpret the meaning of the legislation. These omissions and commission seem to be of sufficient significance as to undermine the entire ruling, suggesting as it does that the submissions and arguments of the defendants have so little merit that they do not even deserve an acknowledgment by the Court. Some cases of doubtful reference cited by the applicant’s attorneys warrant extensive consideration while submissions having what seem to be of direct relevance, do not deserve the court’s attention.



There are two cases in particular dealing with the basic features of Commonwealth constitutions which the Chief Justice relied on in coming to his conclusions and decision. These are the Belize case Bowen v The Attorney General BZ 2001 SC 2, and the Indian case Kesavananda Bharati v. the State of Kerala (1974) 1 SCC (Jour) 3. Citing Bowen and Bharati, the Chief Justice imported and accepted these as applicable to Articles 1 and 9 of the Guyana Constitution, neither of which the defendants’ counsel argued quite persuasively, were relevant. Given the significance of this case, the Court owed a duty to address those arguments. From Bowen, Mr. Chang wrote that the basic structure of the Belize Constitution was made up of separation of powers, the rule of law and the protection of fundamental rights. And from Bharati, he wrote that “while there was no implied limit to constitutional amendment, the very nature of the word “amend” meant that Parliament could not abrogate or destroy the basic structure of the Constitution.” Unfortunately Mr. Chang treats these two main cases rather inadequately. In fact, as Guyanese constitutional academic and expert Dr. Arif Bulkan in an article titled The limits of Constitutional (Re)-Making in the Commonwealth Caribbean: Towards the ‘Perfect Nation’ appearing in the Canadian Journal of Human Rights published in 2013, Conteh, CJ identified not three but six features as forming the basic structure of the Belize Constitution. The additional features are: (i) that Belize is a sovereign, democratic state; (ii) the supremacy of the Constitution; and (v) the limitation of parliamentary sovereignty; Dr. Bulkan had some interesting thoughts on the case. This is what he said:

“Moreover, having identified these so-called “basic features”, the Chief Justice provided no rationale to support why their scope would be as far reaching as to invalidate a constitutional amendment, as distinct from having simply interpretive value. These are not minor deficiencies, and unless addressed they will ensure that Bowen remains an isolated experiment of a maverick judge.”

But Bulkan did not suggest that Bowen should be ignored, acknowledging that “Given the Caribbean’s shared colonial history with India, as well as the commonality of their respective legal systems and institutions, the concept of an unamendable core is not necessarily alien or inapplicable to Caribbean constitutions. At the very least, these factors preclude a summary dismissal of Bowen and demand instead a closer examination of its roots.” Significantly, while Mr. Chang at times used language almost identical to Bulkan’s, he chose to cite a much older publication (2002) by Simeon C.R. Mc Intosh instead of Bulkan. But if there are questions about Bowen, Bharati is far more complicated. It was heard by a thirteen-judge Constitutional Bench of the Supreme Court of India. It was a sharply divided verdict, by a margin of 7-6, with eleven separate judgments set out in more than one thousand pages and expressing strongly conflicting positions. What is now widely accepted is that the Court held that Parliament has "wide" powers, but it did not have the power to destroy or emasculate the basic elements or fundamental features of the constitution. It is hard to accept that Mr. Chang really believes that Act 17 of 2000 setting term limits, a feature of an increasing number of Constitutions, had the effect of destroying or emasculating the basic elements of the Guyana Constitution, the only ground on which Mr. Chang could hold Act 17 of 2000 unconstitutional.



Let us now turn to some of the strictly legal issues raised in the case and specifically in relation to constitutional basic structure. Inevitably, faced with the language of Article 90, and Articles 65 and 66 which the Court did not address, the Chief Justice argued that Article 90 was on its face properly amended by the National Assembly. But he then imports Bowen and Bharati, supra, positing that since that Article 90 touches Articles 1 and 9 - which in his view form part of the basic feature of the Guyana Constitution - the purported amendment could only be done by the people in a referendum and not by any majority of the National Assembly. The decision correctly quotes Article 1 that “Guyana is an indivisible, secular, democratic sovereign state in the course of transition from capitalism to socialism and shall be known as the Co-operative Republic of Guyana.” On page 17 Mr. Chang in describing the normative characteristics of the Constitution not only underlines the word “democratic” but in two instances in which he refers to the article, he inexplicably inserts “and” between “democratic” and “sovereign”, which at the very least casts a subtle change to the article. Why he would feel compelled to do so is as interesting as his failure to acknowledge the words “in the course of transition from capitalism to socialism”. Such loaded terms would surely have prompted him that there is no universal definition of the word “democratic” and even less that it can mean the right to vote for a particular individual. One would have expected in a case in which a single judge presiding in such a landmark constitutional case would at least pay some deference to the work of the Constitutional Reform Commission and a 100% vote of the elected members of the National Assembly. The decision reflects no such courtesy. Writing that “democracy is an essential or basic structure of the State of Guyana on the basis of the Constitution”, Mr. Chang seems to take the view that there is some fixed definition of what a democratic state is. There is no such thing. During the nineteenth and mid-twentieth century the predominant theories were pluralism, elite theory, the new right and Marxism. From the sixties to the present day modern pluralism has become the dominant theory, at least in liberal democracies. Whether intentionally or not, that is not what Article 1 of the Guyana Constitution is all about. Transition to socialism is not what liberalism is all about, even if it sits uncomfortably with Guyana’s Constitutional Court. Was a fundamental right violated? We think not. The case Jyoti Basu v. Debi Ghosal 1982 SCR (3) 318 put it clearly and succinctly. The “right to elect, fundamental though it is to democracy, is anomalously neither a fundamental right nor a common law right. It is a statutory right. Outside of statute, there is no right to elect, no right to be elected and no right to dispute an election”: In Colombia, that country’s Constitutional Court in C – 1040 of 2005, decided that the introduction of a clause that allows for the immediate re-election of the incumbent for only once did not amount to a substitution of the constitutional regime and was therefore within Congress’ power to approve such an amendment. It is puzzling that the Chief Justice would not have referred to this case in his judgment and go on to show why it is not relevant. Mr. Chang’s decision has drawn some strong language but the decision itself is not without its own emotive language such as “mechanically us[ing] the procedural provision of the Constitution in isolation to subvert the Constitution itself” and Parliament under the guise of an “alteration” diminish or destroy the fundamentals of a Constitution from which its own power has been derived.” Let us be clear: there is no right to vote for a person of one’s choice under the Guyana Constitution. Article 177 merely requires a party to put up a list of candidates and the electors can vote for that list or any other list. No elector has any right democratic or otherwise – to vote for any person. What if the PPP/C does not



name Mr. Jagdeo as its presidential candidate, would Richardson bring an action against the PPP/C for “restricting and curtailing” his democratic rights and freedoms? It seems strange that the Court could find, as it does, that a right which does not exist under our Constitution can be curtailed. At best, we would have thought, it is Jagdeo and any other similarly placed persons who could be entertained by the Court on that issue. And we would have liked the Court to address the question by examining how the USA which has term limits and birth requirements is less democratic than Guyana whose Court has ruled that alterations to introduce those very measures are unconstitutional. One cannot help but reflect on the irony and question the wisdom of a one person Constitutional Court when that same Constitution embraces a system of checks and balances. The preferred number of members of the Constitutional Court in most countries appears to be nine with none of those looked at having less than four. Current Attorney General Mr. Basil Williams has given notice of appeal against Mr. Chang’s decision. The question of a third term is far from resolved.



Supersized Government President Granger in one of his first moves made one of the most sweeping restructuring of the Ministries and Departments of the Government. Guyana now has twenty-six Ministers in fifteen Ministries and a host of statutory bodies and agencies. Of course, Mr. Granger was exercising one of the prerogatives of any President as he seeks to establish his own stamp on the Government machinery and signal to the nation the priorities of his Administration. But a prerogative is not to be exercised simply because it is there. There must be strong and compelling reasons for change including matching skills to ministries/departments, obtaining economies of scale, optimising the use of resources and the fair allocation of the workload. Preventing restructuring from being just a blunt tool requires that it be carefully thought out. Empirical evidence suggests that in the private sector many if not most of the mergers and amalgamations turn out to be costly flops, measured by share price, profitability and other similar or derived measures. Such measures do not apply to ministerial/departmental restructuring under which costs and inefficiencies are simply hidden away. One additional cost is that, based on anecdotal evidence, some government units have been in limbo for at least two months with respect to their reporting relationships and therefore no meaningful work has been performed. That does not mean that changes must not be made. Instead what it does mean is that success is possible when changes are well planned and properly implemented, where a strong rationale for the changes can be made, and where staff can be positively engaged in making them happen. But even in the absence of properly costed information, the empirical evidence shows that potential benefits are often compromised because such changes are often announced at very short notice, are usually poorly managed and always costly. In Guyana the structure of the Government has remained remarkably stable since Independence except for 1991 as part of the administrative element of the Economic Recovery Programme. At that time, President Desmond Hoyte with funding from the British Government and the services of international consultants Peat Marwick McLintock reduced the number of ministries from eighteen to eleven. And even with the comprehensive study that preceded the exercise there were complaints that Hoyte had gone too far. President Granger has not explained to the nation the objectives or reasons for the changes or their costs and benefits. This leaves everyone to speculate. Some have suggested that Mr. Granger knew all along that he would be doing a complete revamp but chose to keep it a secret. Others have speculated that one of the reasons for splitting Ministries was to stick to the letter but not the spirit of the Cummingsburg Accord between the APNU and the AFC, the governing Coalition. Rather than speculating, let us look at some of the more notable features and results of the reorganisation and ministerial appointments made and gazetted in the Official Gazette of June 6, 2015. Let us start with the Prime Minister. Under the Constitution the person holding this position would be the first Vice-President and Leader of the House. And under the Cummingsburg Accord, the holder has a number of important duties and functions, including recommending ministerial appointments. But instead, the incumbent is responsible for Information only, a gross underuse of the most experienced parliamentarian and politician around. Compare this with the Minister of State within the Ministry of the Presidency. There are three pages of functions and responsibilities including Cabinet Matters, Defence, National Security, Land Titling, Energy, Natural Resources, Forestry, the Public Service, Citizenship, Climate Change, Births and Deaths, Science and Technology and Scholarships. It is unreasonable to impose such responsibility on any single individual, regardless of how many support staff or junior Ministers are assigned to the holder.



Perhaps the Minister with the briefest but yet unclear portfolio is Ms. Amna Ally, the Minister of Social Cohesion whose responsibilities are Equality and Ethnic Relations, a function which constitutionally falls under the Ethnic Relations Commission. Interestingly Ms. Ally is a Member of Cabinet. Then there was the missed opportunity to fix the anomaly of the Land Registry falling under the Office of the President. But this is also unlawful since the Registrar and Deputy Registrar of Deeds who fall under the Attorney General, are by law the Registrar and Deputy Registrar of Lands. This has been brought to the attention of the new Administration but no action has been taken. There can be no justification, personality or otherwise, for allowing the continuation of this state of affairs even for one more day. We have too the new phenomenon of mini-ministries with their creation seemingly more about politics than policy. The Ministry of Trade, Commerce and Industry whose Minister in the last Administration also carried Housing and Water have now been split into separate Ministries of Tourism and Business. Ministers are responsible for policy formulation and direction, not day to day activities. Similarly, the Ministry of Home Affairs has now been split into two with a mini-Ministry of Citizenship with responsibility for Immigration, Citizenship, Registration of Births and Deaths and Naturalisation and the rest re-designated as Ministry of Public Security. Since the Commissioner of Police is the Chief Immigration Officer it means that that person reports and is answerable to two political heads – the Minister of Public Security and the Minister of Citizenship. Section 6 of the Police Act provides for the Commissioner of Police to be subject to the general orders and directions of “the Minister”. Some ministries have as many as three ministers while the mega-Ministry of Agriculture has a mere one. There is also the strange omission of a Ministry of Labour with the Junior Minister in the Ministry of Social Protection seeming to assume many of the responsibilities normally associated with the Ministry of Labour. This is a very sensitive area and requires someone of even temperament with the background and experience in industrial relations who can advise on updates to existing legislation and deal with complex negotiations. For all its size and average age, the Government is woefully short on experience with a mere handful having managed more than a handful of employees. Indeed only the Ministers of Business and of Tourism have any private sector experience and that was in owner-managed small and medium-sized entities. Ram & McRae is not convinced that the restructuring was necessary, desirable or beneficial. The concentration of power in the Ministry of the Presidency controlled by two former soldier colleagues needs greater justification. There was no discussion or consultation and this structure is unlikely to be adopted by any succeeding PPP/C Administration. Guyana can ill-afford twenty-six ministers with all the perks that go with the office. For us, it is a restructuring that went too far. While the Minister of Finance did not refer to the new ministerial structure in his Speech it should not be beyond the scope of the Budget debate. A detailed list of ministries for the years 1980, 1990, 1991, 2007, 2012 and 2015 is included overleaf.



Table showing comparison of Ministries / Agency Offices (and number of Ministers in parenthesis) 1980 1990 19911 2007 2012 (Ministers) 2015 (Ministers) OP OP OP OP OP The Presidency (4) OPM / VP2 OPM / VP OPM OPM OPM (1) OPM / VP (1) Economic Planning & Finance/ VP

Finance Finance Finance Finance (2) Finance (2)

National Development

Planning & Development/ DPM

- - - -

Foreign Affairs Foreign Affairs Foreign Affairs Foreign Affairs Foreign Affairs (1) Foreign Affairs / VP (1)

- Public Utilities/ DPM - - - - Regional Development

Regional Development

- Local Government & Regional Development

Local Government & Regional Development (2)

Communities (3)

- - - Public Service Public Service (1) (Now under the Presidency)

- - - Foreign Trade & International Co-operation

- - - Amerindian Affairs Amerindian Affairs (1)

Indigenous People’s Affairs / VP (2)

Agriculture Agriculture Agriculture Agriculture Agriculture (2) Agriculture (1) Trade & Consumer Protection

Trade & Tourism Trade, Tourism and Industry

Tourism, Commerce & Industry

Tourism, Commerce & Industry

Tourism (1)

- - - - - Business (new) (1) Energy & Mines - - - Natural Resources &

Environment (1) (Now under the Presidency)

Works & Transport/ VP

Works & Communications

Public Works Public Works & Communication

Public Works (1) Public Infrastructure (2)

Higher Education Education Education and Cultural Development

Education Education (1) Education (2)

1Post- Public service reform 2V/P: Vice – President.



1980 1990 19911 2007 2012 (Ministers) 2015 (Ministers) Education, Social Development & Culture

Social Development & Culture / VP

- Culture, Youth & Sport

Culture, Youth & Sport (1)

(now under Education)

- Housing - Housing & Water Housing & Water (1) (now under Communities)

- Health Health Health Health (1) Public Health (2) Public Welfare / VP Labour&

Cooperatives Public Service

Labour , Human Services and Social Security

Labour, Human Services & Social Security

Labour, Human Services & Social Security (2)

Social Protection (2)

Home Affairs Home Affairs Home Affairs Home Affairs Home Affairs (1) Public Security / VP (1)

Attorney General Attorney General Attorney General & Legal Affairs

Attorney General & Legal Affairs

Attorney General & Legal Affairs (1)

Attorney General & Legal Affairs (1)

Information - - - - - Number of Ministers 20 26 Sources: Structural Adjustment and Good Governance: The Case of Guyana, Tyrone Ferguson, 1995 Official Gazette, 17 December 2011 and 6 June 2015 National Estimates, 2007



Promises and Pitfalls of Oil

It is what we have waited to hear for decades - the announcement of a significant oil find in Guyana! The expectation is that before too long we will be reaping the long awaited benefits being enjoyed by other resource rich (oil dependent) countries. Conventional wisdom is that government coffers will be overflowing with money available for the poverty alleviation projects and infrastructure developments previously beyond the reach of available finances. These things are all possible … but will they happen?

A study of the Organisation of Petroleum Exporting Countries (OPEC) for the period 1965-1998 reflected an average decrease in their Gross National Product of 1.3% while other “less fortunate” developing countries (those with no oil) experienced growth of 2.2%. And two contrasting cases – one from the Netherlands and the other from Ghana – should suffice to prove that oil is no guarantee of economic well-being.

It is the Netherlands from which the term “Dutch disease” emanates, named for the hardships that that country experienced following the discovery of North Sea gas in 1959. More recently, Ghana has found, five years after shipping its first barrel of oil in 2010, that even a better governed African country is not immune from the disease. An article published in that country’s newspaper General News on Thursday July 30, 2015 was captioned Analysis: Ghana hit by oil curse. Between these two periods countries in Asia, Africa and South America have had their own woes to recite.

The plight of countries suffering from the resource curse is as instructive as the causes of their missteps are wide-ranging. Analysts point to poor planning, needless borrowing, wasteful splurging on useless high visibility projects, inadequate dysfunctional institutions, poor governance and last but not least corruption as the source of their woes. Embedded as many of these weaknesses are in Guyana’s history and culture, avoiding them when we join the ranks of oil producing countries will require great political will.

Some serious examination and planning at this stage are critical to make sure we are ready long before the first barrel of oil is extracted. We have not done very well with management of investors in our other natural resources. If results are the best indicator, we would be fooling ourselves into thinking that our legislative and regulatory capacity and our expertise in negotiating agreements for gold, timber and bauxite were adequate. Oil is a much more formidable proposition.

The PPP/C dismantled the Ministry of Natural Resources when it came to power in 1992 and then re-created it after winning the 2011 Elections. The APNU+AFC Government has returned the favour, illogically and inexplicably downgrading the Ministry of Natural Resources and the Environment to a Department of Natural Resources under an over-burdened Minister of State. The oil industry is extremely competitive with serious companies having balance sheets that are much larger than Guyana’s GDP. Investors and their highly skilled negotiators go to great lengths to ensure the security of the massive capital investment which is essential to their success. For its part, Guyana must ensure that it receives a fair share of oil revenues and that the revenue generated is not disproportionately shared and that the industry does not operate at the expense of social dislocation, environmental degradation and sustainable development. In the developed world as a result of some legal challenge or previously unexplored issue, it is not unusual to hear calls for modernisation of existing laws which have not kept pace with technological and social advances. Guyana will also see new technologies being utilised and new industries springing up to support big oil bringing rapid change and along with it challenges we have never even envisaged.



For instance what legislation currently in effect deals with the question of oil rigs and their monitoring or workers based on oil rigs? Is there regulatory infrastructure to address oil spills, gas flares and the effluent and waste discharges from oil drilling? We must be in a position to respond rather than react to these new elements being introduced into our midst and the only preparation is by anticipation and planning for the new world with which we will be faced. Much of our legislation needs overhaul in order to confront these situations and circumstances which were not anticipated when the laws were initially drafted and this must be a priority for our new Attorney General despite the burgeoning list of unresolved matters he has to address.

Even the most recent pieces of Petroleum legislation go way back to 1986 when President Desmond Hoyte brought in the Petroleum (Exploration and Production) Act and the Petroleum (Exploration and Production) Regulations. But despite the establishment of the Ministry of Natural Resources and the Environment in 2011, the Petroleum Division of the Guyana Geology and Mines Commission retained responsibility for negotiating petroleum contracts. The Department of Natural Resources, the Geology and Mines Commission and the Environmental Protection Agency will require strong professional leadership and expertise to negotiate with the experts from the oil companies. Not only is it essential that they recruit highly trained, competent technical staff but they must also be able to advise on the legislative structures in place to support enforcement measures when necessary. Guyana needs to re-introduce a Ministry of Natural Resources. Institutional strengthening alone however will not help pave the path to enduring prosperity and growth. How we manage the sudden windfall will have a lot to do with whether we end up in the scrap heap of also-rans or as a model for other future oil beneficiaries. Back in the seventies our Trinidad brethren with unbridled hubris were not afraid to trumpet to all who cared to listen that “oil doan spoil”. These days an appropriate rejoinder would be “but it does done.”

Many cocky oil countries have lots of unspoiled oil but the days of high flying prices and overflowing foreign currency reserves have come to a screeching halt. Oil prices have proven to be extremely volatile over time and this in addition to the fact that oil is a depletable resource should not elevate its status beyond that of a single leg in the development table. The current oil glut added to increases in shale oil investment and production has created severe angst and disruption in a number of countries that have placed all their developmental eggs in the oil barrel. Therein lies another lesson which we should take from the experience of those currently experiencing economic turmoil rather than taking that same oil slicked road that they have.

Oil comes in with a bang that threatens to steamroll all and sundry before it because of the vast sums associated with its projects. That is the danger that we must manage so that other parts of the economy remain intact and are not left in tatters because they are neglected like the proverbial stepchild. During the ramping up to the production stage US dollars are flowing because of the gargantuan capital investment required for any hope of a successful undertaking. This will result in the Guyana dollar gaining strength rapidly and almost certainly, inflationary pressures because of the significantly higher rewards labour will attract. This means that some of our other major industries, already facing the proposition of shrinking markets and unfettered global competition will find themselves in a deeper hole and even less competitive.

We can let this happen and place all our faith in big oil or take steps to strengthen those industries and ensure a diversified economy. Not an easy task by any means because of the vast resources that the oil industry will be plowing into its various projects and support activities, but one that must be embraced.



The Minister has announced the setting up of a Sovereign Welfare Fund. So far as gold and bauxite are concerned Guyana is already late in this kind of initiative. To catch up our country needs to give the creation of this Fund the highest priority. Sound investment of those funds will ensure that a portion of the revenues from all our non-renewable resources are set aside not so much for price stabilisation but for the benefit of those Guyanese who will come long after those resources have been fully exploited.



President Granger’s First One Hundred Days Following the election on November 28, 2011, Focus 2012 in Commentary and Analysis did a piece called President Ramotar’s One Hundred Days. It took the form of a balance sheet showing on the one side the assets (plusses) and the other the liabilities (negatives). Accountants interpret an excess of assets over liabilities as a positive, equity in their language, and a reverse situation as a deficit. Focus 2015 considers it fair therefore to review the first hundred days of the Granger Administration but using a different approach – its Hundred Days Commitment contained in their Manifesto. Many persons, both supportive of and independent of the Government considered it appropriate to let the Government have their honeymoon period, the partners getting to know each other and trying to understand their new roles and functions, assessing their ministries and portfolios and learning the environment of the bureaucracy. After taking some flak for their underachievement measured by the test of their twenty-one commitments, the Government hurriedly issued their self-assessment in a document 100 DAY ACTION PLAN – deliverable August 24, 2015. Naturally there was some self-interest at stake, the desire to look good and to deflect criticism. Their scorecard reads as follows: Delivered 7 Advanced Progress 4 Partially Completed 2 In Progress 8 21. Our own assessment is that the picture is not as impressive and the Government ought to have achieved much more. There are twenty-six Ministers in fifteen Ministries. Adopting a simplistic approach, if each Minister had been assigned just one of the commitments all twenty-one commitments would have been achieved with time to spare. There were some things that for various reasons could not be achieved. For example, the establishment of the Public Procurement Commission requires a recommendation of the Public Accounts Committee which requires the participation of the Opposition in the National Assembly. The Government says, implausibly, that it is working out the modalities for that, apparently unaware that the AFC had completed that exercise long before and had submitted the names of nominees long before the elections. The self-assessment also says that in respect of the Investigation Commission on Corruption that it has established a State Assets Recovery Programme. Not only are these two very different but it is regrettable that the Government has not consulted with Transparency Institute Guyana Inc. which has access to the resources and expertise necessary for such a Commission. Similar concerns and objections can be raised to many of the comments offered by the self-assessment for non-completion. That can however be counterproductive. We believe that the very act of the self-assessment should concentrate minds and attention. The problem as we see it was that no single person was charged with responsibility for the achievement of the commitments. The suggestion in the media that this responsibility should have been assigned to the Prime Minister, whose portfolio is surprisingly light, appears to have been ignored. Another problem is the apparent obsession of several of the Ministers, no doubt due to their inexperience, with the media and their photographs. It is as though they are trying to outdo each other. Work is not about



being photographed for the media but the hard slog of briefing themselves about the law, the regulations and the objectives and challenges of their respective Ministries and ultimately getting things done. Mr. Granger should have realised that the majority of his Ministers are new and inexperienced in policy formulation and management. As we have on many occasions, we remind the Administration of what Tony Blair did in the UK prior to Labour’s victory. He selected one hundred persons and had them attend training sessions conducted by an international management consultancy firm McKinsey. The members of this Administration can do with similar exposure. But before we close on this segment Ram & McRae expresses the hope that local government elections – that essential element of democracy - will be held before the end of December 2015 as signalled by Mr. Jordan during the Budget speech. This passing mention did nothing to remove the uncertainty surrounding this issue however, since their commitment is to specify a date. As the President said in 2014 as an opposition Member of Parliament, this is “a constitutional obligation and a democratic entitlement of the Guyanese people. It is not an option of the executive branch of government”.



Public Service Reform and Contract Employees Article 38G of the Constitution guaranteeing the freedom of the public service from political influence, one of the changes from the Herdmanston Constitutional reform process, did not matter to the PPP/C. Ram & McRae has always recognised that one of the biggest challenges facing a post-PPP/C Government is how it could carry out its plans and programmes with a public service – however defined – that had been compromised by political influences and appointments. The situation had become so bad that Permanent Secretaries were not only openly partisan, but were candidates in the national elections. But these masked a deeper problem: the contract employee syndrome. Article 201 of the Constitution envisages the role of the Public Service Commission (PSC) as being principally responsible for the employment of public officers. Its role has been partly usurped by the Public Service Ministry which in the 2014 Estimates described itself as having overall responsibility for the management of all ministries, departments and regional administrations. The Constitution provides for a Public Service Commission consisting of six persons appointed by the President – three after consultation with the Leader of the Opposition, two nominated by the National Assembly and one on his own professional judgment. The power to make appointments to public offices and to remove and exercise disciplinary control over holders of public offices vested in the PSC. Public office is defined in the Constitution as an office of emolument in the public service which in turn is defined as the service of the Government of Guyana in a civil capacity. Budget Focus 2014 pointed to the importance of institutions to a country’s development and disparagingly referred to some paper institutions, seemingly designed not to function, such as the Integrity Commission, the Public Procurement Commission and the Judicial Service Commission (JSC). We were not unmindful of the fact that it required the intervention of the Bar Association a couple of years ago to have the JSC constituted, and even so, the JSC seems to be operating well below par. From all indications, the Public Service Commission is in a worse shape. It is perhaps fortuitous that in its efforts to have the JSC properly constituted the Bar Association worked with then Speaker Mr. Raphael Trotman. He is now Minister of Governance and must be paying keen attention to the operation and performance of the Constitutional Commissions. Ram & McRae considers that one of Mr. Trotman’s priorities should be to advise the President on the status of each of constitutional commissions and to have them fixed. Many of them are in poor shape.

President Granger has abolished the Public Service Ministry and placed its functions under the Ministry of the Presidency. That as pointed out elsewhere is the prerogative of the President. Mr. Trotman would not be unmindful that the Office of the President was at the centre of the contract employee syndrome. He would be aware too that his political colleague and now Prime Minister Moses Nagamootoo, in Opposition, had called for a moratorium on the hiring of contract employees. In 2013 he even promised that “if the practice persists into next year’s budget the opposition will indeed be unforgiving.” Then, Mr. Nagamootoo was “in favor of allowing the resuscitation of employment by merit through the Public Service Commission”.

While Focus shares what we hope are still the Prime Minister’s sentiments, it recognises that the Granger Administration could not begin to function without recruiting a number of persons on contracts while it tried to fix the broken system. We are concerned however, judging from the data in the Estimates that the Administration may be going too far when it comes to contract employees. Having made all allowances for the reorganisation of the ministries, we note that the number of contract employees under the new Administration will increase in 2015 over the already huge numbers in 2014.



The increase is not great – 3,671 over 3,628. But they point in the wrong direction. What is troubling however, is that employment cost for contract employees is projected to increase year on year by 15%. For public sector wages as a whole the increase is only 11%. In other words, contract employees are receiving a larger share of the pie. We will be watching very closely to assess whether the new Administration’s actions on contract employees will match the rhetoric used when in opposition. The Finance Minister in his Budget Speech announced that the Government plans to revamp the public service, to build capacity and improve efficiency, and to enhance the conditions of service of public servants, including salaries. The task of carrying out a study with a view to making an in depth report has been given to Professor Harold Lutchman who headed the list of the APNU + AFC. Professor Lutchman is experienced enough to recognise that the extremely high number of contract employees within the system currently cannot facilitate the development of a vibrant, viable public service. Since the Office of the President is an agency beset with one of the worst cases of the contract employee syndrome he will have a battle on his hands. He will require not only considerable resources and some specialist expertise to achieve the desired results but must be allowed the freedom and the independence to act in his best professional judgment. He should be given all the resources and facilities he needs to restore quality in the public service, described by President Granger as the “engine of the executive”.



Conclusion The task of preparing Budget 2015 nearly eight months into the year was made even more difficult by the wholesale revamp of Ministries and Departments. Focus has been advocating for years that the Budget be presented and passed before the year begins. The technical team of the Ministry deserves congratulations for their efforts. Apart from the technical issues, the Minister had to confront several challenges all at once, rice, sugar, gold and flood. It required quite a balancing act on the Minister’s part. That the Budget won praise from organised labour as well as the private sector is a measure of how well he is considered to have succeeded. But we are far from out of the woods. Indeed, we are not even sure where we are in the woods. The Minister has chosen to take an optimistic view of the Venezuelan market for Guyana’s rice – at least up to November 2015 when the arrangement expires and comes up for review. It is hoped that the millers and exporters will not wait on the Government to find markets but will take the initiative in exploring their own options. The sugar industry has been surviving only on the thread of subsidies. The Commission of Inquiry looking into the industry has a formidable task in balancing the various social, financial and economic factors that make up the sector. The Budget was presented as the economy cools and the Minister faced calls for a stimulus package and more concessions. At least in terms of the mining sector, he responded with a package of measures designed to keep the small and medium-sized operators competitive. This will add to the heavy cost of subsidies and concessions already available to businesses. The Minister has announced steps to review the tax system with a view to making recommendations for a more equitable system. Once the Budget debate is over the task of executing the projects and programmes will fall on inexperienced Ministers, public servants and dysfunctional if not broken institutions. The legacy of the last Administration will be felt for some time to come. The NIS presided over by Dr. Roger Luncheon is in the worst shape than it has ever been. There are a number of constitutional and statutory bodies which may not be properly constituted and which are operating well below acceptable standards. And for every good day, there is some headline-making crime that saps the confidence of the citizens. The efforts and energy to meet money-laundering deadlines from abroad contrast sharply with the sloth in dealing with the Integrity Commission and the Public Procurement Commission. The Marriott was partially completed during the year in Kingston and is now wholly-owned by the Government of Guyana. The Minister did not indicate how the Government plans to deal with this. He had sharp words for the Amaila project but interestingly, makes substantial provisions in the Budget for the access roads. The capital city remains broken, one of the consequences of the failure to have local government elections. No one seems to be able or informed enough to give some assurance on a date when these will be held. Prior to the Budget presentation, the Government received low marks for economic management. Following the presentation, with the exception of the opposition PPP/C, the Budget has received commendations. No Budget delivers every wish of the citizens of the country and there are always winners and losers.



Having regard to all the challenges facing the economy, the resources at the Minister’s disposal and the fact that a Budget always is a choice from several and often competing objectives, Ram & McRae is in the camp of those who have endorsed this Budget.



Appendix A1: Acts Passed in 2014

Legislation Act No. & Title Description Date Passed Date of assent Bill 1 of 2014 Evidence (Amendment)

Act 2014 Amends the Evidence Act to include as evidence a certificate or report signed by an analyst who has examined or analysed evidence, for example, a firearm or human blood. Analyst now includes an analyst of the Guyana Police Force or other qualified person.

January 16, 2014

May 8, 2014 23 of 2013

2 of 2014 Firearms (Amendment) Act 2014

Amends the Firearms Act to create a new offence of trafficking in firearms and ammunition.

January 16, 2014

May 8, 2014 24 of 2013

3 of 2014 Summary Jurisdiction (Procedure) (Amendment) Act 2014

Amends section 8 of the Summary Jurisdiction (Procedure) Act permitting a person who is issued with a traffic ticket for an offence to pay to the clerk of the court of any magisterial district the penalty prescribed by the Minister.

January 16, 2014

May 8, 2014 25 of 2013

4 of 2014 Land Surveyors (Profession) Act 2014

Provides the statutory framework for the regulation of the profession of Land Surveyors, including a Board of Land Surveyors.

January 16, 2014

May 8, 2014 16 of 2013

5 of 2014 Deeds Registry (Amendment) Act 2014

Amends the Deeds Registry Act to elevate an agreement of sale of immovable property to the status of a bond, a lease or other encumbrance to clothe a purchaser of land held by transport with some form of protection until the transport is conveyed.

January 16, 2014

May 8, 2014 11 of 2012

6 of 2014 Supplementary Appropriation (No. 2 for 2013) Act 2014

Provides for the year 2013 further sums of $1,055,522,166 under the Current Budget and $419,438,288 under the Capital Budget, a total of $1,474,960,454.

March 12, 2014

March 12, 2014 2 of 2014

7 of 2014 Recording of Court Proceedings Act 2014

Provides for the recording of Court Proceedings and for matters incidental thereto.

February 10, 2014

May 8, 2014 1 of 2014

8 of 2014 Local Authorities (Elections) (Amendment) Bill 2014

Provides for the postponement of Local Government Elections to December 1, 2014. Passed with August 1, 2014.

February 10, 2014

Not assented to 3 of 2014



Legislation Act No. & Title Description Date Passed Date of assent Bill 9 of 2014 Caribbean Community

(Free Entry of Skilled Nationals) (Amendment) Act 2014

Amends the Caribbean Community (Free Entry of Skilled Nationals) Act to provide for a person, who is issued with a certificate from a qualifying State, to make application to the Minister to have that certificate verified. The first version of this Act published on April 14 was withdrawn.

February 27, 2014

April 16, 2014 5 of 2014

10 of 2014 Appropriation Act 2014 Authorises the issue from the Consolidated Fund the sum of $168,624,384,000 as the Budget for the year. Of this sum $122,840,978,000 was for Current Expenditure and $45,783,406,000 was for Capital Expenditure.

April 16, 2014 April 30, 2014 6 of 2014

11 of 2014 Married Persons (Property) (Amendment) Act 2014

Amends the Married Persons (Property) Act to stipulate that applications made under section 6A and section 15 to be made within three years after the dissolution or annulment or marriage or the end of a union.

May 15, 2014 June 17, 2014 9 of 2013

12 of 2014 Motor Vehicles and Road Traffic (Amendment) Act 2014

Amends the Motor Vehicles and Road Traffic Act to provide for a regime for the administration of the demerit points system and to create a new offence for the registered owner of a motor vehicle that is lost or stolen where he fails to make a report within seven days.

May 15, 2014 July 14, 2014 4 of 2014

13 of 2014 Summary Jurisdiction (Appeals) (Amendment) Act 2014

Amends the Summary Jurisdiction (Appeals) Act to remove the provision where an appeal from a magistrate acts as an automatic suspension of an execution of a decision unless the appeal is determined by the Court or is abandoned.

July 10, 2014

August 6, 2014 9 of 2014

14 of 2014 Guyana Cricket Administration Act 2014

Provides for the incorporation of an autonomous national cricket administrative organisation as the supreme cricket administrative organisation and for separate Cricket Boards for Demerara, Berbice and Essequibo.

May 15, 2014 August 4, 2014 31 of 2012

Passed and assented: 13 Billed passed but not assented: 1



Appendix A2: Principal Orders Made in 2014

Order No. & Title Principal Legislation Nature of Order Date of Order 1 of 2014 Conversion (Mineral Property) Exemption Order 2014

Mining Act (Cap. 65:01)

To exempt an applicant from for a Special Mining Permit from the provisions of the Act.

January 29, 2014

2 of 2014 Puisne Judges (Maximum Number) Order 2014

High Court Act (Cap. 3:02)

To increase the maximum number of puisne judges to twenty. February 3, 2014

3 of 2014 Law Revision Order 2014

Law Revision Act (Cap. 2:02)

To bring into effect the publication of new volumes of the Laws of Guyana bearing the words L.R.O. 1/2012, referred to as the Purple Volumes.

February 3, 2014

4 of 2014 Guyana National Trading Corporation Limited, (Transfer of Property) (No. 1) Order 2014

Public Corporations Act (Cap. 19:05)

To transfer a parcel of land from Guyana National Trading Corporation Limited (GNTC) to National Industrial and Commercial Investments Limited (NICIL).

January 30, 2014

5 of 2014 Guyana Geology and Mines Commission (to an offshore Seismic Survey) Reservation Order 2014


To reserve an offshore area of 1,427,000 acres for exploration by the GGMC.

February 25, 2014

6 of 2014 Prospecting Licences (Exemption) Order 2014


To exempt Aranka Gold Inc. from the application procedures for Prospecting Licences in respect of previously held Prospecting Licences nos 12, 13 and 14 of 2006.

March 10, 2014

7 of 2014 National Registration (Residents) Order 2014

National Registration Act (Cap. 19:08)

To provide for the registration of persons qualified to vote and others over the age of 14.

March 20, 2014

8 of 2014 National Industrial and Commercial Investments Limited, (Transfer of Property) (Linmine No. 1) Order 2014


To transfer a small parcel of land from NICIL to a purchaser. March 13, 2014



Order No. & Title Principal Legislation Nature of Order Date of Order 9 of 2014 National Industrial and Commercial Investments Limited (Transfer of Property) (No. 1) Order 2014


To transfer a small parcel of land acquired by NICIL via Order 4 of 2014 to a purchaser.

April 4, 2014

10 of 2014 National Industrial and Commercial Investments Limited, (Transfer of Property) (Linmine No. 2) Order 2014


To transfer a small parcel of land from NICIL to a purchaser. April 4, 2014

11 of 2014 National Industrial and Commercial Investments Limited (Transfer of Property) (Linmine No. 3) Order 2014












15 of 2014 National Industrial and Commercial Investment (Vesting of Property) (No. 2) Order 2014


To transfer a parcel of land from the Guyana Lands and Surveys Commission to NICIL as a gift.

April 4, 2014



Order No. & Title Principal Legislation Nature of Order Date of Order 16 of 2014 National Industrial and Commercial Investment (Vesting of Property) (No. 3) Order 2014


To transfer by way of gift one acre of land acquired by NICIL from Guyana Lands and Surveys Commission via Order 15 of 2014 to China Railway First Group (Guyana) Inc.

April 4, 2014

17 of 2014 Deeds and Commercial Registries Authority (Commencement) Order 2014

Deeds and Commercial Registry Authority Act 2013

To appoint April 30, 2014 as the date on which the Act comes into operation.

April 23, 2014

19 of 2014 Substitution of the Third Schedule to the Act

Medical Practitioners Act (Cap. 32:02)

To replace the Third Schedule to the Act with a new list of hospitals or institutions approved by the Medical Council for internship, part-internship and institutional registration.

May 14, 2014

20 of 2014 Consumer Affairs Act (Commencement) Order 2014

Consumer Affairs Act 2011

To appoint June 30, 2014 as the date on which the Act comes into operation.

June 11, 2014

21 of 2014 National Registration (Residents) (Revision of Registers) Order 2014


To set the qualifying date with reference to which a register of electors shall be compiled.

July 23, 2014

22 of 2014 National Industrial and Commercial Investments Limited (Transfer of Properties) (No. 4) Order 2014


To transfer land at the Ruimveldt Industrial Estate from NICIL to purchaser Modern Industries Limited.

June 16, 2014

23 of 2014 Consent to Change of Control of Body Corporate (Not To Be Given Without Consent Of Minister) And the Right To Transfer Licences, Exemption Order 2014


To exempt AGM Inc. from restrictions on the Company transferring control without the prior consent of the Minister.

September 5, 2014

24 of 2014 Prospecting Licences (Exemption) Order 2014


To exempt Precious Metal Mines Inc. from application procedures for Prospecting Licences in respect of areas totaling 22,302 acres.

September 30, 2014



Order No. & Title Principal Legislation Nature of Order Date of Order 25 of 2014 Medical Practitioners (Amendment) Order 2014

Medical Practitioners Act (Cap. 32:02)

To amend the Third Schedule to the Act by adding Anamayah Memorial Hospital.

October 16, 2014

26 of 2014 Guyana Electricity Corporation Inc. (Transfer of Property) (No. 1) Order 2014


To transfer a parcel of land from Guyana Electricity Corporation to a purchaser, A.H. & L. Kissoon Limited.

October 21, 2014

27 of 2014 Income Tax (Approved Small Business Lending Company) Order 2014

Income Tax Act (Cap. 81:01)

To designate the Guyana Bank for Trade and Industry Limited as an approved small business lending company under which the bank will inter alia make available a loan facility totaling $60,000,000 to local and indigenous community based enterprises in the Rupununi.

November 7, 2014

28 of 2014 Income Tax (Approved Small Business Lending Company) (No. 2) Order 2014


To designate the Guyana Bank for Trade and Industry Limited as an approved small business lending company under which the bank will make available loan facilities with a maximum of $30,000,000 per registered business to micro and small enterprises and vulnerable groups under certain conditions.

November 7, 2014

29 of 2014 Income Tax (Approved Small Business Lending Company) (No. 3) Order 2014


To designate Republic Bank (Guyana) Limited as an approved small business lending company under which the bank will make available loan facilities with a maximum of $30,000,000 per registered business to micro and small enterprises and vulnerable groups under certain conditions.

November 7, 2014

30 of 2014 Value Added Tax (Amendment) Order 2014

Value Added Tax Act (Cap. 81:05)

To zero-rate a supply of imported stone of a type and quality used for construction and a supply of live chicken and baby chicks.

November 7, 2015




November 20, 2014

32 of 2014 Guyana National Bureau of Standards (Compulsory Standard Specification) (Specification for gold articles) Order 2014

Guyana National Bureau of Standards Act (Cap. 90:16)

To make the CARICOM Regional Standard “Specification for gold articles” compulsory.

December 6, 2014



Order No. & Title Principal Legislation Nature of Order Date of Order 33 of 2014 Ministers, Members of the National Assembly and Special Offices (Emoluments) Order 2014

Ministers, Members of the National Assembly and Special Offices (Emoluments) Act (Cap. 1:07)

To increase salaries as per the Schedule to the Act by five per cent with effect from January 1, 2014.

December 1, 2014

34 of 2014 Constitutional Offices (Remuneration of Holders) Order 2014

Constitutional Offices (Remuneration of Holders) Act (Cap. 27:11)

To increase salaries as per the Schedule to the Act by five per cent with effect from January 1, 2014.

December 1, 2014




December 11, 2014

36 of 2014 Mining (Exemption) (No. 2) Order 2014


To allow an application for a mining licence to be considered once notice of the application has been given in writing by the applicant to the holder of a permit over the area and to exempt the Commission from the obligation to publish a notice of the intention to grant the licence.

December 31, 2014

37 of 2014 Mining (Exemption) Order 2014


To allow an application for a mining licence to be considered once notice of the application has been given in writing by the applicant to the holder of a permit or claim over the area and to exempt the Commission from the obligation to publish a notice of the intention to grant the licence.

December 31, 2014



Appendix A3: Regulations Issued in 2014

Regulation No. & Title Principal Legislation Description Date 1 of 2014 Credit Reporting (Cross Border Transfer and Storage of Credit Information) Regulations 2014

Credit Reporting Act (Cap. 84:01)

Provides requirements for approval to transfer and store outside of Guyana information collected under the Act, requirements for protection, security measures and reporting of breaches.

January 20, 2014

2 of 2014 Money Transfer Agencies (Licensing) (Amendment) Regulations 2014

Money Transfer Agencies (Licensing) Act (Cap. 85:10)

Replaces Forms 1 through 9 and introduces Form 12, in respect of monthly reporting, under the 2009 Regulations.

January 20, 2014

4 of 2014 Defence (Summary Jurisdiction) Regulation 2014

Defence Act (Cap. 15:01)

Provides for the appointment of Appropriate Superior Authorities, Commanding Officers and Subordinate Commanders, types of charges which they may deal and punishment which they may award.

April 12, 2014

6 of 2014 Procurement (Amendment) Regulations 2014

Procurement Act (Cap. 73:05)

Provides tender limits in respect of District Boards. May 20, 2014

7 of 2014 Broadcasting Regulations 2014

Broadcasting Act 2011 Provides Form and fees in respect of applications for broadcasting licences. Repeals the 2013 Regulations.

June 11, 2014

8 of 2014 Firearms (Application Process) Regulations 2014

Firearms Act (Cap. 16:05)

Provides procedures, requirements and fees in respect of applications for firearm licences.

November 22, 2014

9 of 2014 Mining (Special Mining) Regulations 2013

Mining Act (Cap. 65:01) Provides requirements for public auctions, lotteries and invitations in respect of reserved, previously cancelled areas, otherwise reserved areas, and areas published from time to time as cancelled.

May 4, 2014

10 of 2014 Petroleum and Petroleum Products Regulations 2014

Guyana Energy Agency Act (Cap. 56:04)

Provides procedures, criteria and conditions in respect of applying for, granting, withholding, displaying, and cancelling licences to importers, retailers and others in respect of petroleum and petroleum products. Also provides for prohibitions, duties, specifications and standards in respect of safety and the environment. Repeals the 2004 Regulations.

December 10, 2014



Appendix B: Selected Socio - Economic Indicators

2014 2013 2012 2011 20101 National Accounts Aggregates (2006 Base)

1.1 Growth Rate of Real GDP 3.80 5.20 4.80 5.40 4.40 1.2 GDP at current basic prices (US$M) 2,685.20 2,611.30 2,506.80 2,265.10 1,970.10 1.3 GNP at current basic prices (US$M) 2,711.90 2,582.70 2,530.80 2,255.80 1,982.90 1.4 Per Capita GDP (US$) 3,606.40 3,248.20 3,347.30 3,017.50 2,619.50 1.5 Per Capita GNP (US$) 3,642.10 3,212.70 3,379.30 3,005.00 2,636.50 1.6 Gross National Disposable Income (US$M) 3,169.50 3,170.40 3,182.90 2,879.90 2,644.30 1.7 Private Consumption as % of Gross Domestic Expenditure 64.40 72.80 70.30 69.80 68.30 1.8 Public Consumption as % of Gross Domestic Expenditure 13.20 12.40 10.30 11.80 11.80

2 External Trade and Finance (US$M)

2.1 Bal of Payments Current Account Balance (385.20) (456.00) (366.70) (372.20) (247.40) 2.2 Imports of Goods and Non- Factor Services (G&NFS) (2,217.50) (2,377.60) (2,523.10) (2,204.80) (1,762.90) 2.3 Exports of Goods and Non- Factor Services (G&NFS) 1,348.40 1,539.90 1,713.20 1,426.40 1,133.00 2.4 Resource balance 869.50 (837.70) (809.90) (778.30) (629.90) 2.5 Imports of G&NFS/GDP(%) at 2006 Base 82.60 91.10 100.60 97.30 89.50 2.7 Exports of G&NFS/ GDP (%) at 2006 Base 50.20 59.00 68.30 63.00 57.50 2.8 Net International Reserves of Bank of Guyana 652.20 751.20 825.20 749.70 724.40 2.9 External Public Debt Outstanding 1,216.40 1,246.50 1,358.60 1,205.60 1,040.30

3 Prices, Wages and Output

3.1 Rate of Inflation (% change in Urban CPI)1 1.20 0.90 3.50 3.30 4.50 3.2 Public Sector Monthly Minimum Wage in G$ (e.o.p) 42,703.00 39,540.00 37,657.00 35,864.00 33,207.00 3.3 % Growth Rate 8.00 5.00 5.00 8.00 5.00 3.4 Electricity Generation (in MWh) 716.70 711.00 690.50 645.20 627.40

4 Population & Vital Statistics

4.1 Mid- Year Population ('000) 744.60 746.90 748.90 750.70 752.10 4.2 Population Growth Rate (e.o.p) (3.10) (2.70) (1.50) (1.90) (1.50) 4.3 Net Migration ('000) (13.50) (13.50) (13.40) (13.40) (13.60) 4.4 Visitor Arrivals ('000) 205.80 200.10 176.60 156.90 151.90 4.5 Crude Birth Rate (per 1,000 persons) 19.80 18.50 18.40 18.80 19.00 4.6 Crude Death Rate (per 1,000 persons) 7.30 6.60 6.90 6.90 7.00 4.7 Crude Marriage Rate (per 1,000 persons) NA NA 6.40 6.10 5.40 4.8 Infant Mortality Rate (per 1,000 live births) 23.30 12.90 13.80 14.40 14.70 4.9 Under 5 Mortality Rate (per 1,000 live births) 23.90 15.80 16.20 17.90 18.20

5 Health and Education

5.1 Public Expenditure on:5.1.1 Education as % of National Budget 14.80 13.60 13.80 15.20 15.30 5.1.2 Health as % of National Budget 9.90 8.50 8.90 9.00 9.40 5.2 Number of Physicians Per Ten Thousand Population 13.30 9.50 7.70 7.00 6.80 5.3 Number of Nurses per Ten Thousand Population 30.50 15.30 14.20 13.00 10.10 5.4 Number of Hospitals Beds per Ten Thousand Population 25.40 25.40 25.40 25.20 25.00 5.5 Low birth-weight babies (<2,500g.) as a % of live births 11.70 8.90 9.60 9.30 10.90 5.6 Severely Malnourished 0.30 0.20 0.30 0.30 0.50 5.7 Moderately Malnourished 1.90 2.00 2.20 2.70 2.10 5.8 Overweight 7.80 7.60 5.70 4.90 3.70

6 Immunisation Coverage

6.1 1 year olds Immunised against DPT/(Pentavalent) (%) 98.00 98.00 97.40 92.60 95.00 6.2 1 year olds Immunised against MMR, Yellow Fever (%) 100.00 97.50 99.10 97.40 94.50 6.3 1 year olds Immunised against Polio (%) 97.00 97.50 97.40 93.30 94.80 6.4 1 year olds Immunised against TB, BCG (%) 99.00 97.80 98.00 97.40 97.60

ITEM



2014 2013 2012 2011 20107 Crime

7.1 Reported Serious Crimes2 3,688.00 4,204.00 3,760.00 3,789.00 3,574.00 7.2 of which: Murder 149.00 155.00 139.00 130.00 140.00

8 Exchange Rates

8.1 G$ to US$ 206.50 206.25 204.50 203.75 203.50

9 Interest Rates

9.1 Commercial Banks' Lending Rate3 10.86 11.16 11.08 11.68 11.959.2 Small Savings Deposit 1.23 1.33 1.69 1.99 2.679.3 Three Months Time Deposits 1.10 1.09 1.39 1.83 2.289.4 Treasury Bill Rate (91 days) 1.67 1.45 1.45 2.35 3.78

10 Debt 326,238.00 355,890.63 379,761.90 349,437.20 311,672.70

10.1 External Public Debt (G$M)4 247,800.00 257,090.63 286,300.00 244,500.00 211,183.20 10.2 Public Domestic Debt (G$M) 78,438.00 98,800.00 93,461.90 104,937.20 100,489.50

2: The category 'Reported Serious Crimes' now includes the reclassification of certain offences.

3: The average prime lending rate actually used by commercial banks applicable to loans and advances.

4: Amount denoted in US$ - converted using exchange rate in 8.1

NA: Not Available

Source: Bureau of Statistics, Ministry of Finance, Ministry of Public Security, Ministry of Public Health and BOG Statistics

ITEM

1: Rate of inflation in 2010 is presented under the New Series with base year December 2009, while for 2009 data is presentedunder the Old Series with Base Year December 1994.

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