GS Jagdeo dismisses AFC’s “Dutch Disease” claims

General Secretary of the People’s Progressive Party, Dr Bharrat Jagdeo claims that the mining sector has been negatively impacted by Guyana’s burgeoning oil and gas industry.

Dr Jagdeo was at the time responding to a concern posed by the Alliance for Change (AFC), that the mining sector has been plagued by the ‘Dutch disease’ due to Guyana’s newfound oil wealth.

During his weekly press conference on Thursday, the GS said these concerns lack logic, and expressed bewilderment at the outlandish claims by the political party.

Dr Jagdeo addressed the AFC’s plummeting production of gold, diamonds, manganese and bauxite”.

However, Dr Jagdeo explained that the issue is with compliance, and not lower production. He pointed out that the escalating price of gold warrants higher royalty payments, and this dissuades persons from declaring their gold.

“There is a greater incentive to evade. So, more evasion or some evasion is taking place, and it’s not a new phenomenon. But it’s a far stretch of the imagination to link that to the Dutch disease. So, I don’t know which person advised them,” he said.

The general secretary spoke of the broken promises and the blatant neglect that the mining sector had to endure under the previous government.

“Miners around the country were told they would remove all the taxes; they would assist the mining sector. So, first thing that APNU did was they increased the tributers tax. They increased their royalty rate. They put the VAT on machinery and equipment,” the general secretary reminded.

The GS pointed out that upon assuming office, the government removed the 10 per cent tributers tax imposed on miners, as well as the VAT on machinery and equipment.

This adjustment also reduces the final tax on the income of miners by one per cent bringing it down from 3.5 percent to 2.5 per cent.

“We removed the VAT on all-terrain vehicles, ATVs. We removed the VAT on hinterland travel that was affecting the miners. We removed the VAT on the lubricating oil that they used to use,” he added.

Dr Jagdeo further continued, “The miners made a case where they introduced a system that you had to get police clearance for the miners to transport fuel in their own vehicles, we removed that. We remove the requirement that APNU put in place the register and obtain road licenses for mining equipment.”