The Minister of Finance, Mr Winston Jordan, loves to compare the Guyanese growth rate with the CARICOM fraternity. But as I proved in a previous column, a 1.6% growth in the Barbadian economy puts twice as much cash into the pockets of the ordinary Barbadian compared to his Guyanese brother, who can boast about a growth rate of 2.9%. It continues to defy logic why the good minister would
want to engage in this game of massaging the numbers to distort the economic facts. But to each his own delusion.
Today I want to prove that the Guyanese economy is in the “dog pen” under President David Granger, using an age- old ratio – Consumption/GDP. GDP measures the total final value of goods and services produced within a country’s borders. So GDP measures all consumption in the economy, all investments, all purchases by the Government, plus the exports less the imports. It is the most popular measure of the size of an economy.
However, I want to zero in on one aspect of this entire formula – consumption. You see, consumption is normally the largest component of GDP. A quick indicator of the growth potential of the economy is the consumption performance of the nation. The graph below illustrates that Guyana’s consumption level is way below that of our main CARICOM neighbours, a clear sign that we are under-performing compared to the main CARICOM nations. For instance, as a percentage of GDP, Barbados had a consumption performance of 95.3% in 2016 compared to Guyana’s 79.1%. And the same trend is proven for all these identified CARICOM economies in the graph. By inference in his Budget 2018 statement, the minister classified these economies as underperforming compared to Guyana’s.
Like our CARICOM sister nations, the main driver in the growth of GDP is consumption. If one looks at the annual consumption rate as a percentage of GDP for Guyana across years, we were up there with the rest of CARICOM in a previous life. So what has really happen in 2016 and 2017? In 2013, the consumption to GDP ratio for Guyana was 109.2%, so why is it forecasted at 83.6% in 2017? Even this 83% is unachievable if one is to factor-in that some 4,000 sugar workers were ambushed out of their jobs. Who really will be spending in rural Guyana for Christmas 2017? Consumption will be flat across large swats of rural Guyana for the next 12 months, and that will feed directly into the GDP performance.
Can we now understand why the entire hullabaloo had to be created by the Speaker to restrict the interrogation of the estimate? There are much facts to hide in the 2018 Budget. It is a sham document stuffed with political goodies for the Granger elites, but has very little for the real people of Guyana.
How more wild and reckless can a national Government be? You are literally planning for 2018 on a pack of guess-estimate (a pack of cards) and hot air, and you expect to be in control of the outcome? Delusional! Where are the concrete initiatives to drive investment, consumption, and exports — the three legs of a strong economy?
Rather, it is all designed to feed a STATE machinery that is there to serve a small cabal of septuagenarians and octogenarians in power, who clearly will not be around when the children of Guyana will be called upon to pay back the debt that they are incurring to feed this greed machine. The servicing cost of the domestic and external debt is expected to reach almost 10% of the current revenue by the end of 2018, according to the 2018 Budget. This is against a backdrop of 6.5% in 2013, as revealed by the IMF Debt Sustainability Analysis on Guyana. Is this the plan — to spend on self-aggrandisement projects that will take the nation right back to the Burnham days, when over 90 cents of every dollar earned were used to pay the national debt?
I am calling on the Granger regime to review its policies and do some intelligent introspection; and have a heart for the poor and the vulnerable. Taking the nation down this road of uncertainty is not an option, and we should cease all these silly projects of arches and stone monuments and invest in the people. As Pericles said in 495BC “What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others”. Wake up, Mr. Granger, and fix the roof.
