§ 50. Mr. Brockway
asked the Secretary of State for the Colonies if he will make a statement on the economic and political situation in British Guiana.
§ Mr. Profumo
Yes. The past year has seen continuing expansion of investments in industrial spheres. The two large overseas investments of the Demerara Bauxite Company in new alumina plant and of North West Guiana Manganese Mines, have progressed satisfactorily, although the rate of installing alumina plant has been slower than was originally expected because of the world recession in the aluminium industry. During the year, too, there has been offshore prospecting for oil by the Standard Oil Company of California, the results of which are not yet known.
As regards local investment in industry, the secondary industries which began in 1957, notably the brewery and the margarine factory, have successfully established themselves, and a chip board factory is under construction. Finance has been found for the necessary installations for bulk loading of sugar.
The rice and sugar crops in 1958 are both expected to prove records. The year's recession in aluminium, however, has resulted in the laying-off of workers in the bauxite industry, and this has had an adverse effect on indirect revenue and on revenue from export duty. The position in the middle months of the year was very unpromising, and it looked as if the budget outturn would be very disappointing.
The stimulus to the economy from the additional value of rice crops this year, which followed last year's bad harvest, has, however, altered the picture considerably, and the larger production of sugar has also helped. As regards 1959, present indications are that there will be some budgetary difficulties because of reduced world prices of sugar between 1957 and 181W 1958. There are, however, good grounds for believing that the difficulties of 1959 will be temporary ones in view of better prospects for the bauxite industry and increased production of agriculture crops.
The development in agricultural land is continuing very quickly; the large scale drainage and irrigation works at Black-bush Polder are ahead of schedule and those at Boerasirie are nearing completion. These, when completed, will do much to increase national income and will help with the problem of under-employment in the Colony. Other land development and communication projects are in an advanced stage of planning but require finance if they are to be implemented. Currency notes in circulation at the 1st of October, 1957, were $16.2 million and at the 1st of October, 1958, $18.13 million.
2. The general impression is that the economy remains buoyant and that the very good progress which has been achieved in the last four years will continue, and indeed be accelerated, as the impact of the development programme and overseas investment is increasingly felt. The high birth rate, combined as it is with a high level of unemployment, requires a rapidly expanding economy if the improvement in living standards which has been achieved over the past few years is to be maintained. The British Guiana Government is fully alive to this need for expansion, and a committee set up to advise Ministers on the possibility of encouraging new industries will shortly make its report.
3. The assistance which Her Majesty's Government is giving to the Colony by way of loan, which was announced in the House on the 18th July [OFFICIAL REPORT, Vol. 591, cols. 131–133] will enable the current development plan to continue despite the difficulties of the London market, and my right hon. Friend expects to have further talks in London next year with British Guiana Ministers as soon as their further development projects have been examined by economic experts.
4. In the political field, I am happy to be able to tell the House that, since the elections last year, the British Guiana Ministers, despite their dissatisfaction with present constitutional arrangements have been co-operating fully with the 182W Governor in the general administration of the Colony. The House will recall that, in my right hon. Friend's statement on 18th July, he spoke of future constitutional developments and referred to the proposal to appoint a local committee to go into the whole question of the form which such developments should take. The Governor has now appointed that committee and I am sure the House will be with me in looking forward with great interest to the views which they put forward.