Am I the only optimist in the room? Because what I heard at that conference is a fair share of apprehension. Let us start with the business risk and its definition vis-à-vis Guyana. The Economist Intelligence Unit, who are the experts in this field, defined country risk as “a threat to economic growth or human progress of varying probabilities that are not part of the central forecast”. In layman’s language, this is an understanding of what is actually happening in the economy that the Ministry of Finance fails to recognise and mitigate with progressive public policies. This is where a President ought to be paying keen attention, but do you (the reader) think our pageantry President, Mr. Granger, cares or understands the core fundamental issues?
If one looks at the graph below, which highlights the real GDP (% change from the previous year), we can clearly see Guyana is going in the wrong direction, and this is expected to get worse in 2018, notwithstanding that it has been reported that some G$12 million in billboards have been erected all over the country to showcase the picture of the Minister of Finance in preparation for the upcoming speech.
I sometimes wonder if this man has a secret plan to launch a palace coup to unseat his own president with all his idle theatrics and misrepresentation of the economic facts. But the more important point remains: that if $12 more million could have been found, we could have had an on-the-spot distribution of $1,000 to each public school teacher. That is what a caring Government does!
From my calculation from and reconciliation with the August 2017 figures coming out of the Central Bank, Guyana will struggle to achieve 3% this year. Even if the Minister tries to sell that number in his budget speech, he cannot prove it. Because fundamentally, since he arrived, he has been presenting guess-timate budgets that are off target from the actual numbers. If one reconciles the 2016 budget to the real 2016 performance, it is clear that the 2016 budget figure was misleading and in stark dissonance from the 2016 actual performance. But in the absence of competence, a heavy dose of subterfuge and deception seems to be the game plan of this Granger regime.
It is an indisputable fact that Guyana has retrogressed economically, socially and politically under this David Arthur Granger regime. The country comes across as old and anaemic, battered and bruised, with a frightening and increasing debt stock and a stronger chance now of slumping into recession than it had in 2015. Unless and until Guyana cracks the investment curse that continues to adversely affect the nation, we must expect massive volatility in capital flows (most of the time massive spates of capital flight out of the country – the latest estimate for 2017 was US$53 million).
This situation can be confirmed by the negative terms of trade that I saw highlighted in the latest IMF report. The current account at the end of August 2017 is at one of its worst positions in years, and valuable foreign currency from the international reserves continues to be burnt up. But rather than reforming GuySuCo, there is a determined effort to close down estates that are foreign currency contributors? Am I missing something, or are the policymakers just plainly stupid?
I am again feeling that sinking feeling that I endured as a child in 1984 under the then PNC regime, when the CIA described Guyana as an “economic tinderbox and economic wasteland,” thanks to Burnham. As the loss of confidence in the Granger regime intensifies, the economic risk will expand. As a reaction to this deteriorating situation, I would not be surprised if this Granger regime imposes capital controls before 2020 as the foreign reserves come under further stress.
Knowing this incoming economic missile is now locked on the Guyanese economy, it is imperative that all forces motivate the regime to wake up and do something; do anything to prevent further asset destruction from happening in the private sector. But that requires a pragmatic and sensible macroeconomic strategy, something I am yet to see in action from Minister Jordan. Maybe it was a blessing in disguise that Mr. Jordan skipped the Business Summit, because such ludicrous statements as “no new taxes in the 2018 Budget” would not have gone down well after the backdrop of the heavy tax burden that was imposed in the 2017 Budget.
In the final analysis, it is not too late for Guyana 2.0 to be unleashed, but it requires economic and political leadership on all fronts, something surely lacking in this Granger regime.
