Gaskin blasts Govt over 2018 revised economic growth rate

– says mismanagement, incompetence remains rife

A recent move by Government to revise the economic growth rate for 2018 from 3.8 percent to 3.4 percent is another indication that it is incapable of managing the economy, creating and attracting investments, and promoting sustainable development for future generations to come.
This is according to former Presidential Advisor Ramon Gaskin, who told Guyana Times on Sunday that the David Granger-led Administration remains clueless on how to run the Guyanese economy.
With Government being more than three years in office, Gaskin said, “If they still can’t get it right, they will never get it right.”
At the recent 48th Annual Meeting of the Board of Governors of the Caribbean Development Bank (CDB), held in Grenada, Finance Minister Winston Jordan announced that the previous 3.8 per cent growth projection he had announced at the last budget reading would be revised downwards.
Notwithstanding further decline in the sugar industry, Minister Jordan has said the

outlook for 2018 is positive, as real growth is projected to be 3.4 per cent, slightly below the budgeted 3.8 per cent, with increased output in rice, construction, manufacturing and services sectors.
Guyana’s last best growth rate was 5.2 per cent, recorded in 2013. World Bank records show Guyana’s growth rates as follows: in 2014, it was 3.8 per cent; in 2015, it was 3.2 per cent; and in 2016, it was 3.3 per cent. For 2017, initial projections of 3.8 per cent were revised to 3.1 per cent. This figure then went to 2.9 per cent before the final figure of 2.1 per cent was determined.
Gaskin said while he feels there is too much emphasis on growth rate as a general rule for Guyana, it is an important indicator for financial institutions like the World Bank, among others. Focus is most times placed on growth rate, inflation rate, exchange rate and debt to GDP.
“I don’t focus too much on that. I focus on the unemployment rate and the rate of job creation…And this is something that this Government shouldn’t feel proud about. As a matter of fact, the growth rate is not properly captured by the statisticians in this country for many reasons,” he explained.
The economist said production in Guyana is declining rapidly, and unless this is addressed, there is a strong likelihood that the growth rate would continue to decline. While the downsizing of the sugar industry has a major role to play, Gaskin said, gold smuggling is also a contributing factor among other factors.
“Sugar is down to 130,000 tonnes. We are in very big problem with sugar. There is no production there. That is why you’re not even getting molasses from Enmore. So we have a lot of problems there, because of the mismanagement of the Guyana Sugar Corporation (GuySuCo) and the privatisation plans.”

Bauxite
But to compound the issue, Gaskin noted, bauxite production declined in 2017

somewhere close to 1,417,557 tonnes as a result of inclement weather and mechanical problems. And while Government had promised that the industry was likely to see improvements in its performance in 2018 due to an increase in world demand for aluminum and the construction of a new mine, other factors may hinder that.
Prices of aluminum, a by-product of bauxite, have fallen on the international market by more than 12 percent since April, when the United States (US) Government imposed sanctions against Russian giant Rusal Co., the second-largest supplier of the metal after China, which has operations here. Rusal was one of dozens of entities hit with sanctions designed to punish Russia for interference in the 2016 US presidential election.
On that note, the economist said the expansion of bauxite production in Guyana does not seem to be promising. This is especially since international financial agencies have reported that Rusal’s exports and finances could take another hit if Russian tycoon Oleg Deripaska, owner of Rusal, is unable to persuade the US to lift sanctions by late August, according to several industry sources.

Mismanagement
Gaskin told Guyana Times that while the rice sector’s production is balanced, the price for the commodity is not where it used to be. Outside of rice, bauxite, gold and sugar collectively are not doing well, and when it comes to forestry, there is some work that needs to be done to create value added.
“Because of the low production and the low exports, we have diminishing revenue from exports and increasing payment for imports for fuel. So, we have a bigger deficit on the trade account, and the reserves have dropped now below US$500 million for the first time in a long time. So we have big problems with the reserves, the trade deficit, and the massive spending on projects,” he stated.
Gaskin said that, coupled with the poor performance of the local economy, “it is clear to all Guyanese that mismanagement, incompetence and corruption remain high under this Government. They are looking to give their party supporters, friends and relatives all the Government-related jobs. And do you know that the monthly bill for public servants is one of the highest in this country?”
The economist said slow economic growth will continue until the country starts to receive revenues from oil. (Samuel Sukhnandan)