Georgetown represents an increasing drain on the economy, while key productive sectors, such as the sugar industry, continue to shrink, stagnate and struggle. The first crop production for 2019 illustrates this point clearly. The flagship sugar estate, ALBION, failed to meet its target for the first time in years, which is an unnatural occurrence. GuySuCo had failed to meet its targets many times before, because of the Demerara Estates, but this situation rarely happens at Albion Estate. This is a consequence of the massive amount of policy bankruptcy coming out of the Granger regime.
After three and a half years in office, Mr. David Granger has lost the confidence of the majority of the parliamentarians in his government, which rendered it into a caretaker one. That vote of no- confidence and the ensuing period did nothing to bolster confidence in the economy. Actually, the empirical evidence reveals that the private sector and a number of other key stakeholders have now lost faith in the management of the public sector, public policy, and public affairs by Mr Granger. The outcome is economic stagnation.
In Guyana today, many business people are switching their local business-to-business transactions to the dollar. The value of the Guyana dollar has fallen by about five per cent (5%) on the official market over the last three years, but the situation is worse on the street market. The parallel foreign exchange market has returned, an occurrence that had left Guyana since the 1990s. This situation would have been much worse if it were not for the skilful management of the monetary policy by the Central Bank, and full credit has to go to that team.
The foreign reserves have declined to US$512.6 million. It is surprising that the Government has not started a programme of rationing the flow of foreign currency out of the country, as the foreign reserves continue to be depleted from a high of US$825 million in 2014. But it seems that lady luck is on Guyana’s side right now. The price of oil has declined by some eighteen percent (18%) in the last two months, which means that less foreign currency will be consumed to purchase the nation’s main import – petroleum products. This should result in some easing of the pressure on the exchange rate.
Based on the latest estimate I have seen, unemployment has been at its highest levels since the 1980s, when the ERP was launched under the PNC Government with its associated retrenchment in the state sector. On the 2015 campaign trail, Mr. Granger promised some financial reforms to revive the economy, but instead of doing what he promised, what the nation found was reform slothfulness and policy paralysis, which has ground the economy to a halt. If one were to measure the non-oil economic growth (since the oil industry has a negligible impact on the unemployment rate), one would find that Guyana has regressed since 2015. Today, many consumers are struggling to pay for their daily needs, as the cost of living continues to climb while real wages are stagnant as more than 50,000 jobs have evaporated since Mr. Granger took office. That is his record!
An IMF report offered some clarity around the issue of poverty between 2006 and 2013, and that illustrated that the bottom fifty per cent (50%) of the people own a mere twelve per cent (12%) of total income, and consume more than their total income. The difference is supplemented by remittances from the Guyanese diaspora. However, since 2014, remittances — according to the Bank of Guyana reports — have declined, and based on the latest data available as at the end of April 2019, they are expected to decline further. This situation is expected to further exacerbate the gap between expenses and income for the poor and the working class.
This Granger Team has rendered more youths into NINJAs (“No Income, No Jobs, No Assets”) than ever before since the dawn of democracy in Guyana in 1992. The combined impact of such a combination of events means that there is an increase in poverty, with a lower chance of social mobility for the youths. For too many youths, the only feasible and sensible choice remains migration. But with the Western and Caribbean Governments tightening up their immigration policies, for too many Guyanese youths, this translates into a life of poverty at home. A direct consequence of such a situation is youth crime. And the circle continues.
The solution remains a youth-focused menu of policies that aim to unleash the potential of the private sector, the entrepreneurial class, and those very same youths by ensuring that all the support services in the financial, health, education, public security, public infrastructure, and justice systems are in place to do exactly this. Today, rather than supporting the investor class, we find the public sector is competing with the private sector, and in the process crowding out the ‘engine of growth’ from playing its rightful role in the economy. Mr. David Granger clearly does not understand the detrimental effect of this antiquated strategy.
It is in this light that Mr. Granger’s recent statement at the 53rd Independence celebrations has to be rejected, and treated as nothing but insincere hogwash that is not backed by real action.