…GDP growth rate hides reality of rampant individual hardships
The year 2019 is over and in summing up how Guyana’s economy fared over the past year, People’s Progressive Party (PPP) Presidential Candidate Dr Irfaan Ali believes that from an economic perspective, it was a year that left thousands in financial hardship.
He made this pronouncement on Monday, during a joint press conference with the party’s General Secretary, Bharrat Jagdeo, at the office of the Leader of the Opposition on Church Street, Georgetown.
Dr Ali pointed out that all the major pillars of the productive sectors showed a decline, including sugar, rice and gold mining. According to him, the root of the problem can be traced directly to the policies of the A Partnership for National Unity/Alliance For Change (APNU/AFC).
“This year has been a disastrous year for us, from a purely economic perspective. And if you are to add what happened over the last four years, the existing situation must be addressed,” Ali told the media.
According to Ali, Guyana has lost 30,000 jobs in the productive sector under the coalition Government. He cited figures to show that over the last four and a half years, earnings have declined by almost US$548 million from the key sectors like mining and agriculture. He blamed taxes, bad policies and neglect from the Government. One sector he delved into was rice.
“I have made it very clear and our manifesto outlines strategies that will bring back life to these sectors and create an investment climate that will bring confidence to the Private Sector in these sectors. In terms of rice, you would recall the Government has made it very clear they don’t see themselves as having a role. They see this as private business.”
“For us in the PPP, we believe rice forms an integral part of our economic life. It affects thousands of families and lives all across our country. For this reason, we will be pursuing measures and policies that give incentives and help rice farmers retool, reorganise and remove the Value Added Tax (VAT) on machinery and equipment.”
According to Ali, this will remove various obstacles rice farmers are faced with in earning a living and expanding. In addition, he said that a PPP Government will pursue better-paying markets.
He also spoke about sugar and the ways in which they can return the sector to profitability. According to Ali, the closure of the estates also impacted the provision of drainage and irrigation services to farmers.
“GuySuCo being out of production [in some estates] has added to the problem. Instead of Government supporting the farmers when the estates were closed, we saw they had increases in the drainage fees. Increases at the water users’ association. And increases in land taxes. All of this means the input cost in the agriculture sector is just too high.”
“Then we have the forestry sector, which has declined tremendously. If we look at the sector, it contracted by almost 53 per cent when compared to 2014. What we have in the forestry sector also is the direct loss of 6000 jobs. Private investment in the forestry sector in 2014 was well over $1 billion. Private investment now is just about $300 million. These issues must be addressed and they are policy-based and incentive-based.”
Ali noted that Government has developed tunnel vision when it comes to oil and managing the overall economy. He made it clear that while oil can expedite development, the existing sectors that actually provide thousands of jobs while earning foreign revenue must be preserved and boosted.
Notwithstanding the poor performance in the various productive sectors, Guyana did experience a 4.1 per cent growth in the economy last year. In addition, the International Monetary Fund (IMF) has projected a 4.4 per cent growth for this year, with an even more steep growth curve projected by them after oil production starts.
When asked about this however, Ali noted that this growth does not tell the full economic picture. He explained that when the Government announces its growth figures, it does not necessarily mean life has improved for the ordinary Guyanese. This point was supported by Jagdeo, an economist by training.
“This Government has a fetish for claiming, look we have economic growth and look how much taxes we collected. As if this is progress. When they boast about tax collection, it came from people’s pockets. It represents a transfer of resources. Government expenditure is also used, so if that expands it adds to the growth figure,” Jagdeo said.
“We also had some spending in the oil and gas sector. That helped bolster the figure. Next year we might very well see 85 per cent growth in the GDP. But what does that mean for the ordinary Guyanese? Does that mean your salary will increase?”