By Ryhaan Shah
That any Government minister anywhere would ever contend that there is no connection between business and politics; especially when that Government is overseeing a shrinking economy resulting from bad policies and widespread corruption, has sacked thousands from a traditional agro-industry for sheer vengeance on its political opponent, and shows utter disregard for the rule of law; that any Government minister bearing this baggage can say to business leaders they must stay clear of politics is either sheer audacity, or else ignorance of how business works.
But that is exactly what Minister of Business, Dominic Gaskin, did when he addressed the recent Business Development Forum hosted by the Georgetown Chamber of Commerce and Industry. He told business leaders they must stay clear of politics and concentrate on the creation of business.
Even non-business types know that stock markets rise and fall on just statements made by political leaders, because politics can affect the stability and worth of corporate stock in a matter of minutes. The political environment impacts business, and the stability or instability of a Government is always a primary risk factor; no business decision is made without considering this basic.
That there are no new investments and no significant business expansion stem from the political uncertainty in the local marketplace, and despite all the trumpeting of the oil discovery off our coast, no investors are flocking to Guyana. Recent articles in “The Wall Street Journal” and “New York Times” gave international media exposure to the find, but with the caveat of the inherently widespread state corruption. Not many investors would risk capital ventures in such an economy.
For business people, the political environment is the least predictable of all risk factors, since it is out of their control; and with the Granger Government’s poor performance in just about every sector — economic and social — that exposes its racism, unlawfulness and incompetence, it is no surprise that the marketplace is jittery.
A list of the ways politics affects business includes not only the level of state corruption, but red tape and bureaucracy in administrative processes; tariffs and taxation; involvement in trade unions and wage negotiations; consumer protection laws; environmental pollution regulations; freedom of the press; health and safety laws; and that most critical factor regarding policies that would be tough on crime.
Import and export taxes, concessions for investments, customs and excise regulations are all political decisions that have a huge impact on business and investment. They also impact the relationship between the business, its customers, suppliers, and its relationship with other companies. The nexus between commerce and politics is so vital and so intrinsically linked that for any business to stay clear of, and take no interest in, the country’s politics would be to their peril.
The political environment of a country affects its economy. This is a basic equation of business. Political instability or uncertainty leads to lessened or no investor confidence. There is no creation of business, as Gaskin wants, in this kind of environment.
Much of the current business uncertainty could have resulted from Granger’s vow to return Guyana to Burnhamism. The PNC was the architect and instigator of political violence for over 50 years through riots, ethnic attacks, the “slow fyah mo’ fyah” campaign, and the Buxton Terror. With PNC protests targeting Regent Street for looting and arson, they were undoubtedly intended to impact negatively not only on business, but the Government, economy, and the society as a whole.
Guyana continues to suffer from capital flight because of the real fear of a return to PNC dictatorial rule. Note that the Granger Government does nothing to dispel these fears. Instead, Guyana’s fragile democracy is being methodically dismantled.
It is not only the private sector that is concerned about the balance of payments’ deficit which has skyrocketed to US$94 million compared to the US$8.8 million for the corresponding period last year. While the increase is due to higher fuel costs, lower earnings from exports, especially sugar and gold, have contributed to the larger deficit; and most of the citizenry are alarmed at the state of the economy, given that last year Government had to continually revise the projected growth rate downward from the expected 3.8 per cent to the final figure of just 2.1 per cent.
Instead of admonishing the business sector to stay clear of politics, the Granger Government should seek their advice on the policies needed to restore investor confidence and economic growth and stability. This would help achieve that goal of the good life for everyone.