Budget 2004 At A Glance

Infrastructure | Sea Defence | Education | Health | Housing & Water | Investment | Job Creation | Agriculture | Bauxite | Tourism | Crime Fighting & Security | Amerindian Development | Public Sector Management | Local Government | Poverty Reduction | Targets for 2004 | 2003 Indicators

The National Budget 2004, presented under the theme, “Investing for Sustained Growth and Enhanced Social Development,” amounts to $75.6 billion, an increase of 5.3 percent from last year’s Budget. Minister of Finance, Saisnarine Kowlessar presented the Budget to the National Assembly on March 29, 2004.
Consistent with its theme, this year’s Budget focuses on sustained economic growth and development and enhancing social development.
This year’s Budget addresses critical development problems: identifying and removing bottlenecks and sources of vulnerabilities; as well as tackling longer term and structural issues; reinforcing macroeconomic fundamentals; retooling the economy to enhance competitiveness; supporting private investment initiatives; venturing into new growth activities; improving the social and economic infrastructure; enhancing human resources development to meet the demands of the expanding economy and job creation.
In the face of slowdown in the global economy, which was caused mainly by the war in Iraq and the Severe Acute Respiratory Syndrome (SARS) virus, in spite of challenges faced by global and domestic difficulties, the economy contracted by only 0.6 percent. The fiscal deficit remained within prudent limits, despite increases in public expenditure that were occasioned, in part, by higher spending in the social sectors and by the fight to repel the growing crime wave. Improved access to and better delivery of education and health care services were also attained in 2003.
Government remains committed to implementing the broad policy reforms outlined in the Poverty Reduction Strategy Paper (PRSP) and is recording significant progress in this regard in implementing the PRSP as documented in the progress report of 2004.
The economy is expected to grow by 2.5 percent in 2004 with increased spending in major sectors.

Infrastructure

This year, work will be completed on the rehabilitation of the Mahaica/Rosignol road; the construction of the four-lane highway; rehabilitation and expansion of the West Demerara main road and the designs for the rehabilitation of the New Amsterdam/Molson Creek Highway and the southern entrance to Georgetown. Almost $700 million has been allocated to refurbish community roads countrywide.
This year $3.4 billion will be spent to increase and improve the network of highways, roads and bridges. Almost $700 has been allocated to refurbish community roads countrywide. Discussions are continuing on the most feasible options for constructing the Berbice River Bridge.

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Sea Defense

$955 million will be spent to improve sea and river defense , including rehabilitation of structures at Johanna Cecelia, Lower Pomeroon, Maria’s Pleasure, Blenheim, La Grange, Hyde Park, Grove, Turkeyen, Buxton/vigilance, Belladrum and Cornelia Ida.

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Education

Government has increased spending in this sector from 8.4 percent of GDP or 12.1 billion in 2003 to 9.4 percent of GDP or 14.5 billion in 2004. Priority spending will be in the areas of curricular and pedagogical reforms, teacher’s training, recruitment, reducing overcrowding, improving facilities and their management, functional illiteracy among out of school youths and institutional strengthening.

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Health

Spending in the health budget has been increased to $6.7 billion. Additionally, the Basic Nutrition Programme, intended to reduce malnutrition among women and young children in poor communities, will commence this year. HIV/STDs prevention and control programmes will continue this year. Government is currently negotiating to finance a new five-year, US$15.6 million Health Sector Programme. Construction works will continue at the New Amsterdam Hospital.

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Housing and Water

Almost $1.4 billion has been budgeted to accelerate the housing programme, and $1.5 billion has been budgeted to improve and upgrade the water systems.
Government will continue its programme to improve land titling and allocation. Priority actions in 2004 will center on the implementation of land tenure regularization in the riverain areas of Essequibo, Berbice and Demerara, completion of systems development in land administration; and improving revenue management within the Guyana Lands and Survey Commission.

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Investment

Given the annual CARICOM food import bill of US$3 billion , Government will seek to increase it exports and with Guyana’s comparative advantage in agricultural production, seek to encourage and promote investment. Government’s investment strategy will continue to focus on attracting and supporting existing and potential local and overseas investors to invest in manufacturing and the creation of value added products and services for export.
Additionally, legislative reform, such as the Investment Act, Small Business Act and hosting an investment conference will be undertaken this year.

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Job Creation

In the wood sector, over $300 million will be invested in two projects for sale to the Caribbean. It is anticipated that new jobs will be created with a cocopeat project coming on stream this year on the Essequibo Coast. Two other projects in the Intermediate Savannahs are expected to create more jobs, while new jobs will be created in the Linden area through the Linden Economic Advancement Programme (LEAP). Other private investment projects, which will produce hundreds of jobs, are slated for this year.
In addition to other financial assistance, Government will also focus on the rice industry and will push for an early and rapid disbursement of $11.7 million Euros, which has been granted by the European Union to enhance competitiveness of the industry. In addition to restructuring the traditional sectors, Government is pursuing new growth areas and opportunities for expanding the economic base. The focus is steadily moving towards services, tourism, non-traditional agriculture and petroleum exploration.
Government will facilitate projects in the information and communications technology sector to the tune of $800 million for the establishment of a call centre at Linden, creating several jobs for Lindeners.

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Agriculture

The Guyana Sugar Corporation’s strategic plan will continue to be implemented in 2004. This plan envisages increasing production to about 450,000 tones of sugar and lowering costs. Additionally, Government secured a soft loan of US$25.2 million to restructure three estates in Berbice.
Drainage and Irrigation systems will continue to receive attention, including rehabilitation of the Dawa pump, replacement of sluices at Golden Fleece and West Burary on the Essequibo Coast. Efforts will be undertaken to expand aqua-culture and increase beef exports in light of new markets.
Further, an IDB-funded agriculture support service system project, amounting to US $3.4 million , will be made available to sustain the Drainage and Irrigation system through water users’ association.

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Bauxite

As part of measures to reduce cost, Government will relieve Aroaima Bauxite Company (ABC) of all historical, social and community responsibility. Privatization of Limmine, which will pave the way for increased investment and production, is slated for the first half of 2004. In addition, Government will pursue other initiatives to revitalize the bauxite sector.

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Tourism

Tourism is emerging as one of the new areas with the biggest potential to contribute to foreign exchange earnings, employment and growth. Government/Private sector collaboration will be enhanced and training, to equip tourism-based workers, will be increased. Government will undertake further measures to promote tourism.

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Crime Fighting and Security

Government will continue to provide the necessary legislative, financial and technical support to the Guyana Police Force and other law enforcement bodies in the fight against crime. Funds have been budgeted to rehabilitate buildings; purchase equipment and vehicles; and recruit additional police officers, among other things.

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Amerindian Development

In addition to a $30 million Amerindian Development Fund, Amerindian Communities will benefit from an exercise and text book programme, and school feeding programme for nursery and primary students. A subsidy programme, among other programs. The expanded infrastructural development and rehabilitation measures will benefit Amerindian communities.

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Public sector Management

Government is negotiating for US$32.8 to support the rational and transparent management of its fiscal and financial affairs. Additionally, all sections of the Fiscal Management and Accountability Act will become fully operational and regulations to accompany the new Procurement Act will be drafted this year. Regulations to accompany these Acts will be drafted.

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Local Government

An additional $519 million has been budgeted under the Urban Development Programme to execute works on and around the six municipalities of Guyana. NDCs will continue to receive subvention of $3 million.

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Poverty Reduction

Consistent with the poverty reduction strategy, increased funding has been allocated to target key poverty alleviation programmes. The continued emphasis on the social sectors and job creation activities are expected to have a positive impact on the ongoing fight against poverty.
Increased spending on poverty alleviation programmes and on the social sectors will continue in an effort to achieve the Millennium Development Goals. Nursery and primary school children will benefit from a $100 million exercise and text book programme; a $250 million school feeding programme; a $350 million school uniform programme; a $47.5 million CXC subsidy programme; a $50 million oral and optical health programme and a $109 million nutrition programme for children and pregnant and lactating mothers.
Under the SIMAP III programme, over $900 million has been allocated to finance community development, drainage and irrigation and health projects. Under the BNTF V, $385 million will be used to rehabilitate roads, construct and/or extend schools. Also LEAP is programmed to spend $450 million.
Under the Old-age pension and social Assistance programme, approximately 50,000 people will benefit.

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Some Targets for 2004

- Real GDP is expected to grow by 2.5 percent.

- Inflation Rate projected at 4.5 percent.

- The Exchange rate is expected to remain stable.

- Hundreds of jobs are to be created through new and expanded investments.

- Merchandise exports are expected to increase by 6.9 percent.

- Overall Balance of Payments is expected to improve.

- Investment in infrastructure is expected to increase.

- Spending in the social sector is also expected to improve.

 

 

2003 Indicators

- Despite unfavourable economic conditions, locally and internationally, the economy contracted by only 0.6 percent.

- Inflation rate was only 4.9 percent, below the projected figure.

- Exchange rate remained stable

- Merchandise exports recorded a 4.3 percent increase from the previous year.

- Public Servants received a 5 percent across-the-board increase in wages and salaries.