Budget Speech Hon Robert Persaud- 20122225 12 Apr, 2012
April 12, 2012
Minister of Natural Resources and Environment [Mr. Robert Persaud]: First of all, allow me to join in commending and congratulating the Hon. Minister of Finance, my colleague, for presenting to us yet a national budget which will certainly take our country and our people forward. Also, allow me to join others in congratulating and welcoming new Members, particularly, the young Members of Parliament, male and female… [Mrs. Backer: Thank you very much.] Well, youth is a state of mind too Mrs. Backer… in being part of, certainly, which all of us have termed, this historic Parliament.
The Budget 2012 has been framed, as all of us recognised, in uncertain and certainly new political circumstances, but also in very tough global financial situations. When we go through the national budget, as some us have done and made presentation, we will see that there are certain underlying themes; that there are certain underlying or consistent thrusts of the budget and these include fulfillment of promises and programmes that the PPP/Civic administration would have made in successive elections and more recently for the 2011 Elections; also looking in terms of modernising, transforming, the traditional sectors of our economy; also creating new opportunities and opening, as it were, new economic growth poles in our society. Very importantly too, an important thrust of the Budget 2012, has been creating or developing and enhancing a society in which we see is much more caring, much more compassionate and providing opportunities for all of our people. These elements stand out as part of the Budget 2012.
I want to quote His Excellency, our President, Donald Ramotar who said, and a theme that was repeated when he came here to the National Assembly for the opening, that “development for us is an all encompassing process and while over the years significant progress has been made in deepening and entrenching an inclusive constitutional democracy, the PPP/C remains open to working with all stakeholders including political parties, civil society and labour.”
Certainly, in pursuant of that statement and that objective of His Excellency, the Budget 2012 was also framed within that context. Within this budget and the programmes and projects adumbrated here give us, all of us here, and those outside who are also part of the national stakeholder, an opportunity to work together for us to deliver that better life for people and to create a more stable secure and just society.
Listening just now to the usual eloquent presentation of one of Guyana’s renowned scholars and national debaters, Dr. Rupert Roopnarine, I am quite sure all of us would have been treated to that, what I consider, literally excursion into the national budget, particularly the dissecting of the Minister’s opening remark. Certainly, there are some themes that the Hon. Member would have highlighted and we would have few disagreements in terms of his interpretation of some of what the Minister of Finance had said. But it is always nice and it is always easy to come and paint this picture of togetherness and one’s resolve and one’s commitment. It is also dishonest too if we do not take into account the progress we have made, the efforts we have made and also the lack of commitment we have seen from some.
I say that, not that we have arrived in our quest to build and to shape and to fashion…
Mr. Speaker: Hon. Member, were you imputing dishonesty? Or are you speaking rhetorically?
Mr. R. Persaud: It is rhetorically. Even if I impute, I am willing to apologise, but it is meant to be rhetorically.
If we look, in terms of constructing the society, I am sure all of would agree that it is still a work in progress, but to create that impression that we have not made that considerable effort and made considerable achievement in this regards, I think would be far from the reality. I think it would also do a disservice, not only to those in the PPP/C or the PPP/Civic Government, but all others, from other political parties and other stakeholders, who have participated in processes and who have been a part of, as I would have want to term, that national project.
Without not going back, let us look at some recent developments, and reference was made to the Inter-parliamentary Parties Dialogue process that is ongoing and the efforts to reach out. The Hon. Member pointed in this discourse on governance, and the number of institutions which are not adequately functioning or yet to be composed, omitted some important facts in this regards and I wish to restate that just for the record. In fact from June 2011, His Excellency, the President, through the Head of the Presidential Secretariat, would have written to the Leader of the Opposition for the names to chair the Human Rights Commission, and also there was no response. More recently, His Excellency, the President, the current President, would have invited and met the Hon. Leader of the Opposition to look at all outstanding constitutional appointments with required consultations and interactions. These include the Chancellor and the Chief Justice, and also looking in terms of the composition of the National Broadcasting Authority and the vacancy at GECOM, to date there has been no response from the Hon. Leader of the Opposition.
Also as part of the dialogue process that was taking place, the issue of GECOM reform was raised and that was also put on the agenda. It was anticipated that the political parties and those who have raised the issue and wanted it to be in the agenda, once it was agreed to by all, namely APNU and the AFC, were supposed to have provided submissions on the reform. That too is outstanding. So when we talk about ensuring and we build and we enhance the governance structure, when we want institutions to work, it requires participation; it requires involvement, as it is provided for in our Constitution.
I cite these examples because if we are going to talk about constructing and building a society of inclusiveness, of involvement of participation, we must be genuine and consistent. Not consistent in our speech, not consistent in lips service, but also consistent in action, in delivering for what we want for our nation. As our President has committed publicly, and he has done so consistently over the period, he has made it absolutely clear that the PPP/Civic Government, and the PPP/Civic, remains open to suggestions, to ideas and to be involved in a dialogue mechanism, to be involved in processes that will see us deliver the type of society that we all yearn for, and certainly need.
I would not want to suggest that the Hon. Member was engaged in rewriting or in some way attempting to be a revisionist, in terms of our history, in looking back at some of the other events. Certainly, over the course of these few days, and I am quite sure other issues that he would ventilated on, in terms of what is being done, and the efforts that have being made in ensuring participation in inclusiveness, that these are strengthened, will be reiterated and emphasised by persons who will follow me.
Going back to the general thrust of the budget, and that is, in terms of creating opportunities and constructing that society we all yearn for, it is looking in terms of inspiring hope and creating in our country a sense of pride too. But we can only inspire hope and create that sense of pride if we provide our people with the opportunities that they need; if we continue to ensure that the traditional sectors of our economy and traditional activities - be it in agriculture; be it in bauxite and be it in forestry - continue, as it were, to record growth and also to be in a position in which they can withstand internal as well external dynamics. In achieving this goal, we also need to look at the new areas.
The Minister of Finance, in his presentation, pointed to these new growth areas and the significant amount of these new growth areas are taking place between the natural resources and the environment sector. I say so, Mr. Speaker, because take for instance, if you look at what is happening in the area of the extractive industry, we have seen that the gold industry has been doing very well. In fact, from 2006 to present, the entire mining sector has increased output by as much as forty-two per cent and in one year alone we have seen what gold production has risen considerably in this regard. Also we have seen what has been taken place in the area of bauxite, in terms of production, when in 1991, bauxite production was just around seven hundred and eighty thousand tons per annum. Last year bauxite production was above 1.8 million ton. This year it is set to be in excess of two million tons.
It is not only about gold and bauxite, we have seen the growth too in quarry due to construction activities and also what is taken place in sand mining, but we want to ensure that we make use of our other natural resources. There is other wealth that we have possessed. Take for instance what is taking place. Reference was made to manganese. Just yesterday the company Reunion Manganese announced that it was drilling results to date and it was able to conduct diamond drilling in about five hundred and seventy-six holes and the majority of the drilling results, to date, have provided excellent correlation, in terms of its trench intersection, meaning that it has the deposits that it was forecasting. Certainly, the work that it is doing, the technical work that it is doing, will ensure not only would there be a manganese operation which was there in previous time, but it is one that is much larger and one that will have a mine life in excess of twenty years.
In terms of diversification, and looking at new areas, there are a lot of exploration activities which have started, in terms of uranium. Already the companies are showing some positive results in this regards. Just about a month ago we advertised and invited proposal for the exploration and also eventual development of rare earth deposits - be it in the Muri Mountain area, in the New River Triangle area, with Brazil, or also looking at some other areas where we believe there are considerable deposits. So we are looking, as the budget reflects, at new areas where we can create the type of opportunities.
Going back to the two main areas of activities within the two larger mining sectors, gold and bauxite, not only looking in terms of regular bauxite output, but also looking in terms of the diversification of products using our bauxite deposits… Starting very soon - the construction has started, feasibility study was presented, financing has been concluded - in Linden, there will be the engaging in the construction of what is considered to be a very important ingredient in terms of oil sector, propane and mullites which will be new products that will be produced right here, and also it will allow the bauxite industry, particularly in Linden, to create new opportunities and new jobs. Also, right in Linden, the company will be constructing, and has already started work, on a new kiln that will allow the company to engage and to expand production in this regard.
I was taken aback by the fact that the Hon. Member who would, on the one hand, suggest that at Linden, perhaps our Lindeners feel, there is some level of marginalisation, to use his word, and he was making reference in terms of communication and broadcasting, but not across the board. In that thrust here there is an effort to expand the industry - an industry in the bauxite sector in Linden in which in the 1980s and just about the turn of 1990s everyone thought that it would have been history. Here it is now the industry has been resuscitated, revitalised with hundreds of new jobs already created. The fact that he can suggest that we should not deal, with some level of urgency, the approval of the Block 37 area which has considerable deposits to facilitate that expansion to engage a new product, but also to make use of the market opportunities out there, given certain developments, which time will not permit me to expand on. To hold back that development, a delay in terms of issuing first, and we are about to issue the prospective licence for Block 37 and then subsequently the mining permit, would in fact tell close to six hundred Lindeners…, and deny six hundred Lindeners the possibility of early employment. I am quite sure that is not what the Hon. Member would want.
For one to be qualified for those areas, feasibility work will have to be done, the necessary environmental work will have to be carried out and the necessary safeguards and the assurances too of the company to ensure much as possible that maximum benefits are derived by the people of Guyana through those activities. It may not be immediately, in terms of a construction of an aluminum plant, but certainly looking at other interventions, hoping that we soon get to that point. So I do not want us, from this National Assembly, to tell investors and persons who are making considerable…, and the planned investment for Linden alone would be in excess of US$120 million over the next two years. Are we telling the investors …? That investment too is linked to the Block 37, because if they do not have the deposit they will not need to invest in the mullite plant. They will not need to construct the new kiln plant to engage in these activities. So we have to be consistent; we have to be clear. If we want opportunities for our people, and particularly vulnerable communities, take for instance what Linden has been going through, we have to ensure that we support initiatives such as that.
Also within the bauxite sector too, Mr. Speaker, in the upper Berbice, we have seen the work done by the Bauxite Company Guyana Inc. (BCGI) which is owned by RUSAL. In 2010, it produced just about a million tons. Last year it produced 1.475 million tons. The projection this year, the conservative estimate, is 1.8 million alone with the possibility of going up to two million. Just two weeks ago, the company brought in US$30 million worth of equipment. The only fleet of equipment of that type, which exists in this part of the world, it imported, so as to take care of that expansion. Again, we are in the process too of opening up new deposits to facilitate that expansion because the expansion is based and is driven by the existence of the deposits. We are at the final stage of opening up what is considered as the Kokerit deposit, so that the company can also engage in those activities and, there too, to the people of Region 10, living in the Upper Berbice area, providing another four hundred and fifty jobs over the next year, or there about.
We do not ignore any concerns that workers and other stakeholder would have. In fact, we have not been treating those lightly and we insist that the company adhere to the laws of our country, but, more so, ensure that it carries out and executes its corporate social responsibility in this regard. Those disputes which were referred to are matters… The Minister of Labour, himself, recently, would have taken a certain court course of action to deal with a matter and, as you know, the matter is currently in the court and I cannot say much more on that due to that fact. But to suggest that there was negligence, or we are only in this urge to have investors come and develop and not looking at the welfare of the communities or the workers, I think, is not true.
Turning, in terms, to gold mining, the Hon. Member and all of us are aware that mining and natural resources activities bring with them, not only the challenges of opportunities, but also they bring with them challenges in terms of social and economic issues that we have to confront. Also if we look at gold mining we can all boast. I wish to encourage the National Assembly that we should salute and applaud the mining communities in our country for their perseverance. All of us know that when gold prices went down they were at the level of three hundred and forty-something, even when OMAI was in its peak, three hundred and fifty, it caused a lot of hardship. It was only two hundred and forty. It went all the way down and mining communities, and miners themselves, had to persevere. It is only over the past several years we have seen the resurgence in gold price and certainly creating those opportunities. But they have been able to mobilise, to rebound, to make the investments and certainly to turn around a sector as to today that is making considerable contribution to our wealth, so much so that last year that we saw gold mining and gold export proceed contributing in excess US$510 million. We need to applaud that.
We will not be complacent on the challenges that are out there. We have to deal with the issues, the environmental issues. I will come to that in terms of how we will address that in a very holistic way. We have to deal with the issues in terms of the social issues. We also have to deal the matter in terms of human resources, ensuring the right technologies so that the miners themselves can get the best returns. They can improve recoveries, recoveries at the levels of thirty-five to forty-five per cent, when in fact there are technologies out there that can take it all the way to sixty and seventy-five per cent. We all know what that can mean, not only for the miner themselves, but also in terms of our natural environment, putting less pressure and reducing the demands for more areas. So there are these challenges that we have to deal with. We know about the many social issues. We have been working, engaging the Ministry of Human Services and Social Security, and even the Non-Governmental Organizations (NGOs), in dealing with those matters. So no one is oblivious to this reality as we move in this direction. This becomes much more urgent because we are also on the flows of some major investments and major developments in this regard. We know that the largest gold mine is OMAI Gold Mine and that mine produced, over a ten-year lifespan, about 3.4 million ounces.
Currently, there are two major gold mining projects where exploration work, prospecting work, has been completed. Just yesterday we were able to receive the final feasibility study of one of those. That is, the Guyana’s Goldfield Inc. and this mine will in fact be much larger and the potential of it is close to 5.4 million ounces with a longer lifespan initially in this regard. There are also two other similar size gold mines which will be coming on stream. What that tells us is that there is an urgency in which we need to ensure that the necessary safeguards are there, at the community level, but as well as the necessary safeguards are at the national level, so that the sector, the development and the growth of it, can be done in a way in which we are not inflected by what is commonly referred to as “the resource curse” and the problems that could afflict resource rich country. That is the thrust in which we are moving. That is certainly the direction.
Again I am very happy that the Hon. Member has indicated his party’s willingness, in terms of us working together, in resolving these issues. These are not issues of a partisan nature; these are not issues in which we want to score political points; these are issues which are required to be resolved. Sometimes it requires the collective political will so that we can address the challenges so that the people of Guyana, the supporters of all political parties, and more particularly the mining communities and the immediate stakeholders, can enjoy the maximum benefits in this regards. Certainly, we welcome that type of outlook and approach.
In terms of the wider aspect of the development of natural resources and how do we deal with the challenges to the environment…The Hon. Member in his presentation suggested that perhaps the Minister of Finance’s budget was weak, in terms of strengthening and reinforcing and, perhaps, building the institutional as well as the policy framework for us to deal with the environmental challenges. I want to advise the Hon. Member that the creation of the Ministry of Natural Resources and Environment, itself, is in fact a recognition of the PPP/Civic that we needed to ensure that there is better coordination, that there is better oversight and there is harmonisation in terms of policies within the natural resources sector and also in terms of the interface with the environmental sector. So that policy decision alone which was taken was a considerable step, a significant movement, in terms of dealing with that, as one can say, perceived weakness.
If we look in terms of the allocation, reference has made that there was none, or not much allocation made to in the area of environmental enhancement and solid waste, the budget speech itself points to two areas. There is in excess of $600 million which has been allocated and provided for the Solid Waste Disposal Project. If we look in the wider area of solid waste too, there is another project that is being implemented by the Hon. Minister of Housing and Water which comes up to another excess $500 million, which looks in terms of revamping the sewage system. So in terms of environmental enhancement, there are some provisions.
With specific reference to the EPA, we all know that it was created particularly in the context of the challenges that we face, more so in mining and in the new areas. Yes, the EPA will have to be strengthened. Yes, the EPA will have to be equipped and resourced to deal with some of these new areas. I would refer to not only to the expansion in the traditional activities which are taken place within the natural resources sector, but also there are some new areas. Take for instance, currently, there are two rigs which are carrying petroleum exploration activities in Guyana. It is the first time that there will be two rigs, at the same time…
The Environmental Protection Agency (EPA), certainly, will have to be equipped in terms of dealing with these challenges. However, what we have taken in this context, given our constraint, is that we have sought to have a much more integrated and a much more collaborative approach in dealing with those new challenges. And whilst, over time, building the right institution with the right capacity will take some time and resources, we are looking at innovative ways in which we can deal with these matters, but, more so, with a lot of emphasis on mitigation because we have to mitigate those environmental risks. That is why mining companies, be it gold, diamond, bauxite, quarry or petroleum exploration, have to go through a very tedious, comprehensive environmental impact assessment process. They have to provide also their disaster risk reduction plan and their disaster management plan. They also have to show the resources that they have and the capability to respond. And that is why if one goes to the Ogle International Airport, he or she will see helicopters there just waiting, and will also see other resources at other points. If one goes to CGX’s location in Berbice, he or she will see that it is equipped to deal with the situation of emergency response, similarly, with other companies in this regard. So recognising the fact that the EPA will have to be advanced – and we know that – the allocation that has been provided to the Ministry for the EPA will certainly look into improving its capacity and improving its capability in this regard.
Whilst we can talk about our thrust in advancing and developing a very vibrant and very competitive extractive industry, we also want to ensure that this industry not only satisfies, as is important, our national requirement but also ensures that it meets the best international standards and practices. And this is given much more focus and emphasis in the context of our Low Carbon Development Strategy, and, more particularly, the engagement that we have with the Kingdom of Norway where there are specific requirements. What that shows and provides to the international community is that here it is that a country with vast natural wealth can pursue its development but at the same time can offer itself as a model in which we are able to preserve, enhance and ensure that our eco-systems are not compromised. That is the type of balance that we have been pursuing and that is the type of approach we will be taking in terms of the development of the natural resources sector and in terms of the management of the environment. And that is why we will continue to reach out to international bodies and international institutions. We have just started and engagement with the Commonwealth Secretariat to improve the institutional framework in terms of the overall management of the mining sector with a focus on the Guyana Geology and Mines Commission (GGMC). We are in the process of engaging the Extractive Industry Transparency Initiative (EITI) and a team will be visiting Guyana in another two weeks to commence negotiations. These are things that we are doing voluntarily because, at the end of the day, we want to ensure that not only our outreach to local stakeholders, as we have done, but also to reach out to competent international and multilateral agencies so that we get the best arrangement and the best system for the people of Guyana.
Our work in the area of climate change, our work in terms of developing a world class model in terms of talking about avoiding deforestation and in promoting our Reducing Emissions from Deforestation and Forest Degradation (REDD)+ Initiative, work continues. In fact, it has been accelerated. And over the last year, we have seen considerable progress. We have been able to benefit from the two payments from the Kingdom of Norway which are in the Guyana REDD+ Investment Fund (GRIF) account and very soon my colleague Minister of Finance will be, in fact, initialling project documents, which have already been improved, which will see us benefiting from these funds - the US$70 million. So we are already at the point of making the people of Guyana enjoy benefits with specific projects.
There are other projects which will soon be going to the GRIF Steering Committee. Also, as we are meeting here, there is a representative, from the Government of Norway, in Guyana. That representative is here assessing the work we are doing. We are working into our third evaluation of our third tranche of another US$40 million. And so far, all the work we have done has shown that we are able to maintain those commitments so that we can, whilst maximising our returns and benefits in terms of utilisation of natural resources, at the same time benefit from our eco-systems and services. Our work continues very aggressively in this regard.
In some other areas, in terms of wild life management, we will continue in terms of looking at updating our regulations and even bringing to this National Assembly, some important pieces of legislation. In terms of our national parks, there are lots or work that we will have to do. Certainly, we will be putting a lot of emphasis on this and just recently we concluded an arrangement with the Government of Germany whereby we have benefited already from a €4 million grant and another €5.4 million has been allocated and that has allowed us to create the first Protected Areas Commission, again not only satisfying a national commitment but also ensuring that, internationally, we are able to fulfil our obligations.
Land management, too, is a very critical area and we know that it is not only across he Coast but also the Hinterland. Reference was made to the dispute we have from time to time whereby activities would take place in areas which have to be identified for Amerindian land areas to be expanded...but also in areas that have been identified for titling. The Guyana Lands and Survey Commission has been provided with resources. And we also know through the REDD+ Initiative and the Memorandum of Understanding (MoU) with the Kingdom of Norway we will look in terms of resources, to enhance and accelerate that process of demarcation. Also on the Coast, too, the Guyana Lands and Survey Commission is working with the European Union (EU) in implementing a €3 million project to create a national integrated land management system. We are constantly seeking to modernise the system and have an institution that is responsive, an institution that is so resourced and developed that it ought not only to be in a responsive mode but also to be in a position in which it can address issues where there are conflicts and so forth.
Looking at the 2012 Budget, we have made provisions in terms of addressing these very critical issues in terms of taking our country forward and we can all look forward to these initiatives bringing about a type of development and the type of returns that all of us would want. Going back to the thrust of the Budget, that is creating that environment for modernisation, for transformation, for new opportunities, creating that environment for care, compassion and opportunities, it also requires firm commitment by all of us in this National Assembly and not only firm commitment and our speech and statements here, too, but also that when we go out to our supporters and we go out to the communities that we are also constructive. If we are serious about development and if we say that we support particular initiatives, we must also ensure that the message in the work we do out there is consistent. Take for instance, the Hon. Leader of the Opposition, perhaps, was in Fryish and the way in which he presented the Government tax measures suggested that it was bias and that it was only there to benefit a certain segment of the community, when, in fact, I have not heard a single Member of the Opposition, particularly of APNU, say that the Government’s decision to increase the income tax threshold was a bad one. We did not hear anyone saying that the Government’s decision not to introduce any new tax was a bad one or the other measures we have taken previously to reduce and to ease that tax burden on the Guyanese people were bad ones. Or take for instance Linden: just yesterday the Hon. Prime Minister referred to the issue of electricity and the plan to integrate Linden’s electricity into the national system. And yet we know that there are certain elements that will go to the community...and even this morning there was a protest activity suggesting to the community that the Government has ended subsidies and support for the people of Linden when, in fact, even just yesterday, the Prime Minister reminded us that close to $1.86 billion has been allocated to support electricity supply. Also in terms of going into the sugar industry and suggesting that the Government was not doing enough to help the sugar industry in this regard also does not reflect the type of rhetoric that we hear here of working together. If we want dialogue and to work together and, as it were, to create and construct that society, we must do that on the basis of facts; we must do that on the basis of truth. We must be honest and sincere in this regard. That is why I want to appeal to all Members that we... [Mrs. Backer: You cannot appeal. The Chief Justice said you cannot appeal.] The Attorney General... I want to urge all Members of the National Assembly that we have a golden opportunity before us. We have a situation that is pregnant with opportunities to bring our people together. We have an opportunity here for us to ensure that especially for our young people...and I am very happy that we have many more young people than we have had in the previous Parliament amongst us. We have this golden opportunity to take our country to new heights, certainly to heights in which we can all look forward to a Guyana that we are proud of and one in which we can be very hopeful and confident for the future of all our people.
With those few words, Mr. Speaker, I wish to join my colleagues in commending the 2012 Budget to the National Assembly. [Applause]
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