Budget Speech - Mr Irfan Ali—20142131 08 Apr, 2014
Mr. Ramjattan: Thank you very much, Mr. Speaker. We are here gathered again in this august Assembly to debate the 2014 Budget. I must state, at the very inception, that it is necessary that the necessary protocols be announced, and that is largely that our Minister of Finance must be congratulated for managing, in a very difficult and challenging set of circumstances, nationally and internationally, for presenting the Budget, as he did. That does not, however, mean that there will not be criticisms, and constructive criticisms at that, from this side, from the Alliance For Change, that is going to endeavour with the purpose of ensuring that we all come to, what I would regard as, a national consensus that will make the life of ordinary Guyanese a better one - all Guyana, as the theme is, having their lives far more improved than what exists as of today.
That is why I want initially to make a preambular point that we like to boast as to where we are today as against where we were some years ago. But it is still important to point that the important question that should be asked is: “Are we where are supposed to be?” That is the important question.
On the last occasion I stood here and spoke in the National Assembly about the Budget was last year. I have been doing so for some 20 years or more now. I indicated that if this Government were to tighten up, the Opposition would lighten up. Over the years, however, we have seen a total lack of that tightening up and it is in that activity of not tightening up that the Alliance For Change and, I know, APNU have done what they have done. They have the national interest at heart, fundamentally. It is not as if we are grandstanding politically and would shout down simply because we see persons across the aisle as people who we do not appreciate. This country belongs to all of us and all of us must be participants in its glory.
I feel that this Budget could have been a far superior budget had there been the incorporation of the views of the Opposition, and it is not as if the Opposition’s views are not known. We have indicated to the Government side a number of things we would like to see, since last year, when we had our tripartite talks and indicated so many things in that list of items the AFC and APNU gave to the Government side. We are of the view that by virtue of this exclusion from the process, and I concede, as mentioned yesterday and quoted from Mr. David McGee, that it is the right of the Government side to prepare the budget.
But when we do have a dispensation where there is a majority on the Opposition side, because of that newness and novelty of the circumstance, it is incumbent on a government that would like to see things happen that there be, what is called, inclusiveness on the part of the government of opposition views. In a minority government, there must be multi-party governance by necessity. It is not multi-party governance that is of the status that we have to be as Members of the Cabinet... No! We will sit just here and make our points. But we want our points to be considered, we want our points to be deliberated on. And, to that extent, the non-incorporation of the views of the Opposition has sunk this Budget to the level of one which there are tremendous criticisms.
I want to make the very first point. It came on the very first day when Dr. Vindhya Persaud asked what is wrong with this Opposition that is going to use the scissors on the Budget to deny people of Guyana certain benefits. Well I want to tell the House, and especially direct this remark to the Hon. Member, that we must appreciate that even if the Opposition is going to use its scissors, this Budget, at its preparatory stage, has had a hatchet and shears used on it prior to its coming here. The cuts were made because of old revenue streams not coming in to the Consolidated Fund so we can have a fair grasp of how much revenue we have to disburse and expend; it was never accurately represented in this Budget. I have made this point since 2012 and, indeed, because it continues to happen, I have to continuously make it. We are told that we largely have approximately $208 billion to spend, but, if we were to put all the revenue streams into this Budget, we would have a lot more than that. In the approximation of the experts that have indicated to me what it should be, it is in the vicinity of more than $50 billion that was cut prior to this Budget being laid here in this honourable Assembly.
Moneys are being hived off into certain accounts that belong to certain statutory agencies, statutory bodies. The Guyana Forestry Commission’s balance - and at page 597 one is going to see this - as of 31st December, 2013 totalled some $1.034 billion. That was never put into the Consolidated Fund. The Guyana Geology and Mines Commission’s bank balance at the end of 2013 is $12.625 billion. The Guyana Lands and Surveys Commission - an additional $365 million, and this is at page 600 of Volume 1; the Guyana Civil Aviation Authority - $742 million, page 605 of Volume 1 again; the Central Housing and Planning Authority - $2.7 billion, page 616; the Lotto Funds - $1.1 billion; and, of course, the National Industrial and Commercial Investments Ltd. (NICIL), always - $9 billion and even more.
These bodies have Government moneys, what is called public moneys under the Constitution and the Fiscal Management and Accountability Act. That alone totals some $27.7 billion that is not there in our Treasury. I want to give this analogy. It is like a husband, who is the income earner, giving the housewife not the total sum that he earns. He actually earns $100,000 and goes and says he only earns $60,000. With that, the housewife has to pay rent and do all the necessary things to the extent of only $60,000 because he hived off the further $40,000. This is what we have here in this Budget. In addition to that, we will then not be in the position to know what is there in the Consolidated Fund so that we, in this National Assembly, in accordance with constitutional provision and Standing Orders, will be in a position to know how much we can spend and on what.
So when the Government goes and does its propaganda on the National Communications Network (NCN) and the Government Information Agency (GINA), they must understand that when the Opposition is saying they will use their scissors, a big chop on the wings, literally, of this economy and how much it really has in the Treasury has been made at the preparatory stage. [Mr. Nagamootoo: How brutal!] It is very, very brutal to the extent that so much has been chopped off. Then I ask the question: what is wrong with a government that is going to do that kind of axing of a huge set of moneys? Everything is wrong.
In addition to those sums I spoke about just now, we have, from the Auditor General’s Report of 2012, a number of agencies that have bank balances that have not been put into the Consolidated Fund, although the Hon. Auditor General makes it clear that these sums ought to be put in there because they are transferable into the Consolidated Fund. I want to quote from the Auditor General’s Report of 2012. In his Executive Summary on page vi, he makes mention of it, but it is expanded at page 9, paragraph 21:
“The Auditor Office’s assessment of the balances held in special accounts at Bank of Guyana indicated that eleven accounts with balances totally approximately $4.140 billion appear to be funds that were transferable to the Consolidated Fund.”
But they have not been transferred. And these include the Infrastructure Development Fund Account, the Accountant General-GEC Wartsila Account, the Agriculture Sector Loan Account, SIMAP Account and the Financial Sector Reform Programme Account. Then there are some other static accounts, the Japanese Non-Project Grant Aid, CARICOM Headquarters Project and so on. That is at page 10.
The Ministry’s response - and this is 2012 because we have not received the 2013 Auditor General’s Report as yet - was that they are making considerable efforts to transfer these moneys into the Consolidated Fund. What is it that is such a big effort to transfer these moneys when, at the behest of the Auditor General, it is a requirement and an instruction from that higher authority, in relation to our revenues, that it be done? The recommendation of the Auditor General was that the Audit Office, once again, recommends to the Ministry of Finance to urgently review the status of these accounts with a view to paying it into the Consolidated Fund. So apart from the $28 billion I mentioned of NICIL, Lotto, GGMC and all those, we have an additional $4 billion in bank accounts at the Bank of Guyana.
It is not the there in the Consolidated Fund, so that we now in this August Assembly, like the board of directors in a corporate entity, having the treasurer come forward and saying that this is the income we have, and then the members of the board as a matter of policy makes the disbursements based on that true genuine reflection of the state of revenues... So the cut is made long before we come here and that must be appreciated because, unless we have all that is in the Consolidated Fund, we will not have a true representation of the state of our finances. For Members who are going to be critical of us, who are going to run to the television station and do the hue and cry that the AFC and APNU have cut the Budget, I want the point to be made that billions have been axed and shared. This is very important, and is not for want of the governing party, Cabinet, not knowing about these things; they know. And that is, first of all, a huge flaw of this Budget - no true depiction of what the state of our revenues is to the extent then that we can have an ability to make the assessments as to where the priority should go.
This Budget will have a deficit in the vicinity of some $32 billion. It was always the pride of the founder leader of the PPP that budgets must, as best as possible, be balanced. If we had these incomes from those sources coming in that will total in the vicinity of approximately $32 billion – $28 billion plus the $4 billion that is in the static accounts – we could have had a balanced budget. But “no” says the Minister of Finance; “no” says the Cabinet; leave it there in the static accounts and leave it there in the statutory bodies. These, apparently, are not public moneys anymore for the public, through its representatives in this Parliament, to spend. No; they are going to spend it as they want.
And that is why recognised academics and even one who was there as an Auditor General recently made the remark that we have a parallel Treasury in the form of these sums of moneys. Dr. Goolsarran indicated in a publication only about two or three days ago how we are having the creation of a parallel treasury. This is wrong. Articles 216 and 217 are stating that all these moneys must go into the Consolidated Fund, as I have been urging, so that we can have a better hand at what will be spent and what will be known. It is through these funds, I would want to deduce, that a lot of additional spending without the National Assembly’s approval is being carried out. It is through the moneys in these bank accounts that we probably have the Marriott Hotel construction still going on, because, obviously, we do not know how it is they are carrying on with the project as is.
And that is wrong. Every major capital project in this country, which is going to utilise public moneys, must have the National Assembly’s approval. But we do not have, let us say in relation to the Marriott Hotel. And a whole lot of moneys from the public purse have gone there without the approval of the National Assembly. Now when you are going to do bypass mechanisms like these, you are going to anger your legally elected representatives of the National Assembly which is then going to cause vexation of the spirit to demand scissoring in relation to other items. It is like a con game on the housewife with that deceptive husband. It is going to anger the housewife when she has to struggle with $60,000 when the income is $100,000. I want that point to be brought. I am going to bring it constantly here and especially as we see our constitutional office holder, the Auditor General, making these claims that these moneys must be placed in the Consolidated Fund.
We see, in addition, other revenue streams that are being denied the budgetary process. Take for example - and we read about it recently in Jamaica – the spectrum was sold for US$25 million. That is money that will go into the Consolidated Fund of Jamaica. But what do we have with our spectrum here in Guyana? We put in the Telecommunications Act who and who will get licences for these things without any payment. What we are saying is that friends, family members and close associates are going to be beneficiaries when indeed if it is something of value that ought to be sold and so when the sale price is gotten, the moneys will come into our Treasury. There is a denial of the Treasury collecting that which would have raised the Consolidated Fund even more.
We see also going on in natural resources - and I will come to that later on - in connection with forestry and mining resources, extraordinary low rates in relation to concessions which are going to deny the revenue streams that would ordinarily have been there to the quantum that the market rates would have demanded. That is important.
We have a huge set of other areas where moneys are denied. One of which is billions of dollars out of exemptions and tax concessions granted to certain investors. When one asks the question as to why certain investors are getting these tax exemptions and concessions in a number of areas, duty-free this and duty-free that,... Of course, I appreciate that for incentivising our foreign and local investors, it is yes indeed, but it is not rational. We notice a whole set of exemptions and concessions being granted, which are denying Guyanese a better day for them.
It is but a huge flaw in this budget presented, again, in 2014. We feel that it must come to an end. It must be brought to an end simply because our Constitution says that all public moneys must go into the Consolidated Fund. Of course, as the very garrulous Attorney General would state, “The Constitution is supreme”, but when it comes to the finances, it could be scattered about for them to spend as they want, and that which indicates it should be in the budget is to be hived off.
We must not have parallel treasuries in Guyana, not from the year 2014. It must stop. When the Opposition is going to make the point that it should be halted, please, Members of the Government side, listen up. Do not go and say we are chopping the budget, when we know that you are chopping it 10 times more – tenfold more. That is why we cannot have moneys for the Old Age Pension increasing to $15,000, as we demanded. With that $50 billion and more, which I think is all across in bank accounts, National Industrial & Commercial Investment Ltd. (NICIL), and whichever, it is denying the people their rightful due that can make Guyana a better place.
A lot of talk also was done by Members of the Government, indicating how great we are as a nation today as against what was before. I want to say that the point must be made that a lot of Guyanese are leaving this country. Their migration levels are so high today that the Government does not want to bring out the census report to show what really our population is. It is very opaque when it comes to giving that information so that we can know where we really stand. There is a page in the budget speech, I think it is page 79, “Net Migration” per month, in which there are almost 1,000 persons leaving Guyana per month – net. We then have a population growth that is obviously declining - 2.7%. It is in the budget speech of the Hon. Minister, to that extent. The whole point of it ... [Dr. Singh: It is disclosed there. You cannot say that we did not disclose it. Make up your mind.] Make up what mind? You do not want to give us the census because it will give a lot more information as to the poverty levels of Guyanese. Do you see how he is jumping like a kangaroo already?
Mr. Speaker: Okay gentlemen. Mr. Ramjattan, stay to you speech please.
Mr. Ramjattan: Yes. We would know whether indeed the poverty rates...
Mr. Speaker: In Guyana the appropriate analogy would be “like a howrie,” but we are not going to have none of that here.
Mr. Ramjattan: We do have this very damning figure coming out because the Hon. Minister had to state something about our net migration rate. It has always been there. The census will obviously give us a lot more information, as to a number of other things, so that we can make better assessments in conveying to the population what the priorities on spending should be. I think it was the economic forum that mentioned the high migration of skilled labour from Guyana. When they regale themselves that we are doing fantastic in relations to job creation and all of that, we are not getting the true picture. Though our declined population is the highest in the Caribbean, at 2.7%, we cannot progress as a nation when so many skilled workers are leaving to the extent of about 1,000 per month. That is why in the sugar industry and in so many other spheres of activities we are not getting the quality people because they are overseas.
There is a previous speech, which I had made, in which it would appear that we are just manufacturing skills for other countries. We are outsourcing our greatest assets, that is, our human resource. That is why a number of the industries, especially sugar, are in the state where they are. I will come back to sugar just now.
These kinds of facts cannot be disputed, as are in the Estimates, the budget speech and those schedules attached to them. They cannot be disputed. It does go to show what it is that an Opposition, duly elected, is being denied of, to the extent that its inputs into it are going to be somewhat incomplete as it were.
I want to indicate too that there were lots of talks about this job creation and all of that. We have to do a lot of research to find out if that is true. One of the indicators to know whether so many jobs have been created is to go to our National Insurance Scheme (NIS) data and we have gone there. The NIS registration data would tell us. Indeed, it logically flows that if there is plenty of employment - they are saying that it is good quality employment with big moneys and middle class size, moneys are coming from the jobs that are being created - why then in the NIS registration data there are only literally 1,000 employed persons being the number for each year since 2009? In 2009, active, at the end of the year, for persons paying national insurance was 1,000, then it was about 1,100 from 2011 and another 1,000 more for 2013 from 2012.
What is here is an indicia or an index in relations to how much employment is being created. Unless of course, the Members are saying that the NIS is not collecting its dues and those are still not being active, they would tell me that these figures are all statistics and statistics on stilts. They are not of the first category of what we would call lies.
It is “1,000, as per active at the end of each year”. I have got these numbers in this document, from 1990, which was taken from NIS. This hue and cry, again, that we are doing wonderful is not reflected in an institution that it ought to be reflected it. You are going to say, “but they are not paying” and that now comes to another question which I would want to develop a bit later on our rule of law. Why then are there many non-registered...? What is the NIS doing? Why then is the actuarial report is stating that the Minister must at least go after people who have to pay their NIS and he is not doing it? We will have statistics here that is going to show something otherwise, but in the Minister’s rebuttal he will be saying, “They are not actually paying up.” This is very wrong.
This is all budget because we want to be a constructive critic here as to what the Minister is talking about. What the Minister is talking about obviously then, by a logical deduction, is a misrepresentation. It is important... [Mr. Nandlall: You have the 1990 records, Comrade. Get 2014 record.] Well, we do not have the records for 2014. You cannot have the records for 2014 on the NIS registration data. It is important that this be the record. You are going to say whatever you want Mr. Attorney General. Do you see how garrulous he is? He has a sharp tongue to respond, but it is if he could only pay attention, with that sharpness, on actual facts as to employment rates, actual facts in relation to the revenues, our country would have been a better one. Obviously, it must not be allowed to work here.
It is important... [Ms. Manickchand: Mr. Nandlall, if you do not pay NIS... He does not pay NIS, he or his staff.] Well, you see it is going to get personal now to the extent. The NIS that is paid... [Interruption]
Mr. Speaker: Hon. Members, order.
Mr. Ramjattan: I would have been the first that the NIS would have come to, knowing that I am an Opposition that it feared badly and it would have come and charged. I and my staff pay the highest rates of NIS in this country. If it is one person who should know that, it is Ms. Priya Manickchand because she worked and came from that stable. [Interruption]
Mr. Speaker: One second Mr. Ramjattan. Members, this is going in a direction that is bringing disrepute to the House. I would ask that we do not go down this road please. It is becoming personal and with that comes emotionalism.
Mr. Ramjattan: That comes with resignation. She probably wants my resignation.
Mr. Speaker: Let us please allow Mr. Ramjattan to make his presentation, as he intended to, originally. Proceed Mr. Ramjattan.
[Mr. Nandlall: Please do not resign.] I will not. Even heckles from my learned friend are not going to make me resign.
I come now to a very important aspect of this sojourn to accountability and that is the Procurement Commission. We know that this country has a lot of corruption. The corruption is stated in the Auditor General’s report. Corruption, not only in relations to what the Ministry of Finance has done with hiving off the moneys, but dealing with a lot of things such as the Contingencies Fund, at page vii of the Auditor General’s report, “Advance continues to be issued from the Contingencies Fund which does not meet the required criteria for such advances...”
He went on to say that there were massive overpayments to contractors, at page vii - “A significance amount of overpayments to contractors has occurred on works.” This is 2012 report, the latest one, page vii. Do you see it? You have it there, paragraph 9, page vii. Mr. Minister, do you see it?
Mr. Speaker: Mr. Ramjattan, speak to the Chair please. Go ahead, Sir.
Mr. Ramjattan: Yes. At paragraph 6, page vii, what is the Ministry of Finance doing in relations to the Contingencies Fund? “Key findings relating to Ministries/Departments/Regions, overpayment to contractors”. I hope that a second look might be taken by the Minister of Finance on these issues.
It is also talking about compliance with stores regulations. A number of Ministries, Departments and Regions have been found in breach of the store regulations. It would appear that this Government just cannot store properly. They put it all over the place. The inventory to do with what Government’s property is not reflected. Again, other specific findings have to do with a number of moneys that are not collected – huge sets of moneys. In one case, there is over US$2 million for Guyana Stores Ltd., as he mentioned. Of course, there is litigation going on. He said that. Guyana Stores Ltd. was sold for some money and it is here that certain moneys have not been collected.
Extending and developing these executive summary points of the Auditor General there are pages thereafter in which he stated clearly. I do not want to go into them because they give greater amplitude to that which was in the executive summary.
We will come back now to a Procurement Commission, which is but another aspect, that has to deal directly with moneys and how moneys are spent this time. It is not how the revenues streams come into the country. This country literally went into a civil war in the 1999/2000 era. It came as a result of elections, as we all know, then the Herdmanston Accord, where Caribbean leaders had to come to our country and then they developed constitutional reform, one such reform being the establishment of the Procurement Commission. It came as a result, as we all know, because we have lived through the experience, of the stone scam, the milk scam and a number of scams that occurred in the 2001 era.
We have the scenario, where again, as the Attorney General would want us to be heckled off, the point I am trying to make,... [An Hon. Member: The lotto scam.] That was another one. We fought for that, it was included and provided for in article 212W of the Constitution. That Government, of which I was a part, in 2001, indicated that later down in the year it was going to establish and make operational that Procurement Commission because that Procurement Commission was going to be body to police procurement matters - all matters.
What do we have today after some 13 years? It is that none of those provisions have become operational by virtue of the establishment, that is, the operationalisation of the Procurement Commission. Today, we have, however, the junior Minister of Finance saying that it is too pricey. It would be something too pricey to establish and operationalise. Well, if we were to do a comparison...
Minister within the Ministry of Finance [Bishop Edghill]: Mr. Speaker.
Mr. Speaker: One second please, Mr. Ramjattan.
Bishop Edghill: Mr. Speaker, while I notice that it was a headline in the newspapers I never said that in this House.
Mr. Speaker: Very well. If you did say it outside of the House then it could be referred to. For example, we quote from newspapers.
Bishop Edghill: I never said so.
Mr. Ramjattan: He said it was too expensive. His words were “too expensive”.
Mr. Speaker: But then Mr. Ramjattan...
Ms. Teixeira: Mr. Speaker, the point Bishop Edghill is making is that this was a newspapers headline, it is not quoting him. It was the editorial choice of words.
Mr. Speaker: I do not know; I have not seen it. Mr. Ramjattan, is it that the Hon. Member Bishop Edghill used those words?
Mr. Ramjattan: The Hon. Bishop Edghill used words that it was too expensive to go and have that established now. I want to tell him because I can withdraw the word “pricey” if he is saying that he did not say so.
Mr. Speaker: Well, that is a euphemism for the word “expensive.” It is like a substitution.
Mr. Ramjattan: That is right. It is a substitution for the word “expensive.”
Bishop Edghill: Mr. Speaker, we can go back to the transcript. This is what I said to the House. I brought the figures and said it would have been 24 cases that the Procurement Commission would have been handling for the period.
Mr. Ramjattan: Well, you did say that it was too expensive.
Mr. Speaker: Mr. Ramjattan, find a choice of words and proceed please.
Mr. Ramjattan: Yes. It is important to understand that from since those days, in 2001 and then in 2003, when we passed the Procurement Act to give teeth to the constitutional provisions, we have not seen the establishment and the operationalisation of the Procurement Commission. That is a constitutional mandate; that is a constitutional requirement: “There shall be a Procurement Commission...” What is there of recent times, since we have been making the call that it must be established and operationalised, is, first of all,... We do not want to deny ourselves the “no objection” clause and after 10 years, or more, they are now coming with that, that they have to have this “no objection” clause. The Procurement Commission states clearly in section 54..., as we all know, I debated it here. Indeed, I had a role to play and that role was that after the establishment of the Procurement Commission and its operationalisation Cabinet’s role shall be zero to the extent of the awards.
Now they come and they say that they have to change that section 54. [An Hon. Member: Who is “they”?] It is the Government side. The whole point of it is that they do not want to have this Procurement Commission for the simple reason that they want the continuation of gorging at the trough. That is what they want. Imagine the thing being established in the 2001/2003 period for the simple purpose of ensuring that there is more transparency; that there is more accountability. Then in 2004, 2005, right up to 2011 when they were in Government, at a majority level, they did not put it up. When they are in a minority state now they come and say: “This policeman, called Procurement Commission, we do not want him.” That is what the Government Members were saying, recently. They do not want the policeman, because, as I said, more than now we are trying... We are always consensus building. We told them, in the Government, that we are going to do what is called an amendment to section 54 to give them a compliant status. “No” said the Cabinet, “We do not want that, we want the no objection,” which is doctrine, in accordance with section 54 of the existing Act. This is the new proposal as to why it should not be operationalised. It is because only 24 complaints, and 25, will come for the whole year.
The Hon. Member Bishop Edghill is going to say that 24 was now, but it is because we do not have the policeman, people are not complaining to it, otherwise we would have got hundreds of complaints. Little that the Hon. Member Bishop Edghill did not realise too was that there are other functions of the Procurement Commission. It shall rewrite the laws in relations to procurement and advise the National Assembly – literally that. The Constitution makes provision in a certain article, to review the laws and bring it to the National Assembly. That is an important one. Also, it is not only the laws, but guidelines, criteria, and so, for those that are going to bid for projects.
They do not like that too. They are going to get their tender boards to go and write up the guidelines, such as the one, which was recently done, that we brought to the press in relations to pharmaceuticals. Friends and family, and those who are very close to them, will forever be the ones who will benefit from those criteria. [Mr. Nagamootoo: They do not want to stop the gravy train.] That is right. They do not want to stop the gravy train.
The qualification in 2013, in relations to pharmaceuticals, was again changed so that the goal post could be narrowed, so that only one only footballer could stamp the ball inside. One has to get a $50 million revenue or income tax base; one has to do a whole set of other things. When it is looked upon there is only one person who will get it. We all know that person. They are then going to grant ... [Mr. Nadir: Do you know the man?] You know the man, I know the man, all of us know the man.
Mr. Speaker: Hon. Member, you will need an extension.
Mr. Nagamootoo: Mr. Speaker, I beg to move that the Hon. Member be given another 15 minutes to continue his wonderful presentation.
Question put, and agreed to.
Mr. Ramjattan: I want to make this point to close on the Procurement Commission that the losses we are making but its absence is tenfold greater than that cost, Bishop Edghill, you are talking about. Take for example, I see here the prices from Queens Atlantic or the New Guyana Pharmaceutical Corporation (GPC) in relation... I am not going to mention the one with the Ketoconazole. I am going to mention Depo-Provera. It is, and I am using here, the authorised document... I do not know what the medicine is, but whatever the medicine is it has indicated that its total cost for it is going to be $25 million – the New GPC. Thirteen thousand vials, at $495 each is what it could have been bought for from any other pharmaceutical provider. This one here, the unit, is literally $1,900. It is from $495 from any other person or where it is selling, even at the pharmacy, to $1,900 for one vial. Do you know how much it was that one vial of medicine came up to? It was $25 million and if it was tendered to anyone else it would have come up to literally $6,000,478. That is what we lost.
We have heard the story of Ketoconazole.
Mr. Speaker, we have to deal with that very important other industry because procurement is like an industry for that Government across there, a very profitable industry, without the Procurement Commission. One that is very unprofitable, notwithstanding we pour moneys into it for the last three or four years, some $11 billion, is the sugar industry. They are saying that it is too big to fail. Others have argued the case that it is too big to succeed.
I want to make the point that when it comes to sugar, it touches a chord in all of us – this side of the aisle and that side. It is important that we ensure that that sector succeeds, but it must succeed without with bail outs every year. The great President Obama, when he needed to bail out certain industries, car and whatever else, had made it a criteria that the industries have to pay back the money within 10 to 15 years and more over the big criteria was that the board, which is there that is now asking for the bail outs, should bail out. It is to get a new board because the Government cannot give good money to the same bad managers and board members. Then what they will do is to come and say that they want to close down the industry and they want to rear tilapia.
This mechanisation programme, which it has, is something that we feel is a good input into it because the workers today and their children of tomorrow are not going to want to do the back breaking work, which for centuries has been going on in that industry, cut and load. It has to mechanise. When it is mechanised we are going to see the displacement of workers. Workers are going to be displaced and I want to know if the deduction could be made that it is probably realising that there will be displacement, that the Government wants the money and then it is not going to mechanise for the purpose, as it is known, that there are certain special interest in the employment creation in that set of estates which is going to produce livelihoods for workers, which also, in a sense, is an advantage for Guyana Agricultural and General Workers Union (GAWU) to have lots more workers under its trade union membership. When the Government Members come here saying things to the effect that they have plans and strategic plans for the sugar industry, we have to check those things out thoroughly.
My good friend Dr. Ramayya indicated that we have to do a couple of things. We are not going to be paglees. We have to ensure that we are going to have all that, which they are talking about, to reduce the cost of production. We have been saying this for over eight years now, since the Alliance For Change (AFC) came into being, that you have to start doing best agricultural practices, you have to do the husbandry practices, you have to increase private cane farmers supplies, you have to get on with the business of mechanisation, notwithstanding that GAWU would probably have less trade union members. The Members have to talk about the rehabilitation of factories, not only the sugar factory at Skeldon, but it is to rehabilitate all. What is also very important is that we have to get the skills back into that industry. What we see now, especially at the middle and upper management levels and even lower down to the supervisory level, are a lot of people who want to make the proper assessments, that can get that industry going, literally are being asked to shut up or if they do not shut up they are being silenced. A number of managers have indicated, in the sugar sector, that a lot of what the board and the Government, through the Ministry of Agriculture, are doing is not the right thing. We have been telling them sugar is produced in the cane fields and there is where it is and not on the fancy boardrooms where there could be an analysis but the people are not being incentivised at the bottom there to do the hard work.
This sector must have a certain plan that will have to be supported by the Members of the Opposition, I speak here on the AFC behalf, and I am certain that is the position of A Partnership for National Unity (APNU), before we move forward. We are not going to take good money and send it off to bad. It is bad economics - terrible economics. I want to just forewarn the Members on that side of the House that our sugar industry, which is so important to all of us, must be managed better. That is what we are talking about. If we are going to move from where we are to where we ought to be then it is better governance; it is better management, and so on.
The other important point that I wish to talk on has to do largely with what I have to say on the natural resources sector. Sugar is important and it is not making a profit. Natural resources sector, gold and forestry, is making a profit and so to that extent we still have to ensure that we maintain that high profitability. I want to say this: we could make lots more profit if it is managed better.
Notwithstanding, the Hon. Minister Robert Persaud was indicating that this forest sector is doing well, I want to say no. In a sense, it is in decline. The Minister claimed that log exports have declined in 2013 compared to 2014 by 12%. When we tabulate the official information we are seeing export value being decline by 10% and the volume by 8%. The Minister also claimed that valued added export increased by 30%, information – this is information from someone who has been tabulating it, Ms. Janet Bulkan – based on Guyana Forestry Commission (GFC) data and GFC forest sector information, I have cross-checked these developments with its monthly reports and it is saying no - that it is not true. The only time there was ever a boom was when there was the Barama boom and that is when it was renting out, and, of course, we then penalised it because that was regarded as illegal logging.
There is also the point, which was made, that we are Asia phobia. We are not Asia phobia. Foreign direct investments, when they come here, must be abiding by the laws of the country, the labour laws, especially as Dr. Cheddi Jagan would have demanded. We also would want, not only that, but when they are conducting their businesses, that their accounting arrangements must not see, what is called, transfer pricing. They pay us in Guyana little or nothing but when we check what their invoices are in China and India they are hundreds of US dollars per cubic metre. Take for example the prime timber, royalty class special, not only has it been overcut by tremendous percentages but we are seeing also, high on the heel, what is called, severe transfer pricing where we are losing out. [Mr. Benn: Where are the invoices?] The invoices we have sought from out of those countries... [An Hon. Member: You want to... [inaudible].] That is the point. The point is whereas we would normally pay in Guyana approximately $560 for metric cubic metre when Malaysia charges more than six times that for the equivalent timbers. [Mr. Benn: Where is the invoice?] The invoices can be found... That is one of the reasons that transparency is what we require. If we did not go and check that the budget was cut at the preparatory stages..., but you now are telling me that... We have the invoices from the Guyana Forestry Commission as to what it is. We also have the invoices from China and India where they are selling timber per cubic metre for almost US$200.
The export of raw logs nets a profit of US$90 free on broad (FOB) from Georgetown. When it is taken into consideration a lot of other things which could be done, it is a profiteering through, what I call, transfer prices. Now we have to ensure that we create jobs here and job creation can come from tertiary production, from our forest resources. What are we doing about that? All we want is log exportation because it is easy and quite frankly there has been a lot of corruption in relation to the amounts and the pricing and we are losing. The AFC wants to provide an alternative and we are recommending... These were some things we had in our action plan. We want the rationalisation of the investments from the foreign investors to eliminate the absurd cost advantage given to Asian log traders through tax concessions when they provide no added value in Guyana. Tie it to the fact that when added value is given to tertiary production and manufacturing you are going to get the incentives. You do not, and you only want to have,...
Mr. Speaker: I recognise the Hon. Prime Minister, one second, Mr. Ramjattan.
Prime Minister and Minister of Parliamentary Affairs [Mr. Hinds]: I wonder if I could be allowed to ask the Hon. Member why he said...
Mr. Speaker: No Sir, with respect.
Mr. Hinds: We are not Asian phobic.
Mr. Speaker: Hon. Prime Minister, with the greatest of respect, you cannot ask a Member a question while he is presenting. More importantly, you are speaking immediately after him and you may make all of the points you wish to make after him. Go ahead please Mr. Ramjattan. Mr. Ramjattan, you will have to begin wrapping up.
Mr. Ramjattan: We have to also ensure that Guyana Office for investment (GO-Invest) and the Guyana Revenue Authority (GRA) operate a level playing field for tax audits and tax concessions in the forestry sector instead of political favouritism which is now evident.
We have to recreate a development bank, perhaps, similar to Guyana Agricultural and Industrial Development Bank (GAIBANK) to make use of the excess liquidity in Guyanese commercial banks for investing in the forest products industry, but learning from the bad experiences of loan defaults, and so on, earlier in the 1970s. Reduce the opportunity for corruptions in Customs and Trade Administration is something which has constantly been written about by Janet Bulkan, a very brilliant article, “The rule of law in efficiency and corruption in timber exports.”
Similarly, reduce the opportunities for corruption in the Guyana Forestry Commission, eliminating all opportunities for administrative discretion, negotiated penalties and the compound system they have under the old forest law. It is important that these be done. If they are not we are going to make grand losses, in which, if we had avoided them would make Guyana better.
There are lots of other things that I really wanted to talk on, but realising that the time is up would have to wrap up and state this: That indeed what is required to move us into that better position is to have genuine democracy. Economics depends on the comfort of the citizens seeing that justice is being done, fairness is being exhibited and when that happens there is confidence in the industry, confidence in all industries, confidence in the management of GRA and the customs authority. We feel comfortable, but when we see what we see and then when we make a cry about it and ask that it be remedied and it will be said say no it is good what it is, we are going to, as I said, not have that confidence. Young people, as I mentioned, are going to go away – migration levels, skilled levels – and corruption is going to persist.
Lord Acton said corruption... [Mr. Nagamootoo: Absolute corruption corrupts absolutely] Yes. Corruption corrupts... [Hon. Members (Government): Power corrupts.] Power corrupts but what we have here now is twist that I would like to bring to it, “absolute corruption empowers”. The thing is empowering them. They have the control of the National Communications Network (NCN) and the Government Information Agency (GINA) and everything and they could do what they want with that empowerment and the moneys. It is creating more political polarisation.
I want to end on this note that we must not do what is called democracy at the level of its minimalist position, that it only means winning the votes. In Guyana, if we can have democracy ensuring that we create better citizens, that would have meant going a far way, meaning men and women who strive to live in genuine freedom, who want genuine development and see genuine justice done to themselves and others. It must not simply be this democracy that we see in the minimalist fashion simply a regime. We must make it a political culture.
If we are going to criticise my good friend Mr. Neendkumar, he must go back and ask, “Is this criticism a genuine one?” “Is this something we could consider and deliberate on rather than simply coming off the high horse and start chastising us for making these...?” If this genuine democracy does not deepen beyond its current electoral form as the People’s Progressive Party (PPP) wants it, and wants it to be frozen like that so that poverty, inequality and corruption, and so on, are not remedied, I want to warn that this minimalist democracy in Guyana will not survive. Guyanese will perceive it to be irrelevant and worthless and the next generation will not have men and women to defend it much less nurture it. We will not have the men and the lieutenants such as Dr. Jagan and his other lieutenants and other men, such as Mr. Rodney and so many others, and even in the PNC, such as Mr. Hoyte. No. We are going to have a generation that will simply move away and not defend or nurture it.
In this minority Government, this dispensation, there must be multiparty governance. We each have to give a little so that our citizens will get much more.
Thank you very much. [Applause]
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