Guyana as a country is in an economic crisis that will only get worse if Government continues to bury its head like the proverbial ostrich, instead of making urgent and critical investment decisions to turn around the country’s fortunes, rather than sit and wait on the possible revenue windfall from oil.
The clarion call was made by former president Bharrat Jagdeo who on Friday met with local business leaders to give his take on the country’s economic performances, pitfalls and worrying signals emanating from the current administration.
Business Minister disingenuous
Jagdeo, a Russian-trained economist, and former finance minister of Guyana, told the Guyana Manufacturing and Services Association (GMSA) Business Luncheon, that Minster of Business Dominic Gaskin was in fact disingenuous in his pronouncements when he addressed the local business leaders earlier this year.
Addressing a packed Savannah Suite at the Guyana Pegasus Hotel, Jagdeo said that the ruling A Partnership for National Unity/Alliance for Change (APNU/AFC) administration is without a detailed development strategy for Guyana, unlike what obtained under his administration.
Jagdeo used the opportunity to take the Business Minister to task over his assessments for Guyana’s economy and reference to international indices, saying instead that the minister needs to outline what the administration is going to do in the short- and medium-term to alleviate the uneasiness in the business community.
Jagdeo said too that Minister Gaskin was wrong to use the performance indicators of neighbouring countries to justify Guyana’s economic slump, since the circumstances in each of these countries were different.
Minister Gaskin in his address to the GMSA business forum earlier this year, suggested that neighbouring economies were performing poorly, and as such Guyana was in no economic crisis.
Jagdeo rubbished this argument posited by Gaskin by firstly pointing to the falling oil prices on the world market which has had an adverse impact on the economies of Venezuela, Trinidad and Tobago, and Suriname.
According to Jagdeo, low oil prices on the world market is in fact a favourable situation for Guyana, since it will and has allowed for greater international reserves giving government the fiscal space to make immediate interventions.
The former President also used the occasion to give his assessment of the economy in the context of the recently presented 2016 Mid-Year Report, saying that the only new industry that Government has created is that of “manufacturing excuses.”
“It’s not the excuses that will move our country forward,” extolled Jagdeo.
He told the manufacturers that the economy has in fact been declining significantly and this is being masked by the outstanding performances of two gold mining operations which, coincidentally, were brought into Guyana under the People’s Progressive Party/Civic (PPP/C) administration.
Jagdeo expressed that if these two companies were to be disaggregated from the country’s overall performance, then it would reveal that there has been an actual decline.
The former president pointed out that a number of the traditional sectors of the economy have either been returning dismal performances, stagnant or marginal growth.
He said one would have thought that government would have put incentives in place to assist its local exporters since they are facing lower prices in the international market, coupled with increased competition.
According to Jagdeo, a prudent government would have been working with those exporters to ensure they preserve their market share on the international scene.
He said what the government has in fact set about doing is reviewing downwards the concessions it affords to the Private Sector and investors – normally meant to act as incentives to stimulate economic growth.
According to the former President, the signals being sent by the current Administration can in no way serve to provide any levels of assurance, and will in fact serve to keep investors out of Guyana.
He cited as an example the use of the Special Organised Crime Unit (SOCU), along with pronouncements from officialdom that the Guyana economy was in fact being buoyed by illegal drug proceeds.
According to Jagdeo, no serious international investor will want to come to Guyana in face of such signals being sent by its government.
Police state methods
In direct reference to Government’s SOCU, Jagdeo said this outfit has in fact caused the business community to become extremely hesitant in investing in Guyana.
Jagdeo suggested that this was the case, not because persons could not explain the source of the funds they plan to invest, but rather it is because of the ‘Police state methods’ being employed by the unit.
He sought to qualify his pronouncements by pointing to the fact that SOCU takes direct instructions from the Ministry of the Presidency.
The Opposition Leader pointed also to the operations of the State Asset Recovery Agencyt as another entity functioning under the Ministry of the Presidency which, according to Jagdeo, has already begun undermining the business climate and the independence of the judiciary and constitutional bodies such as the Director of Public Prosecutions.
He pointed also to the ‘anti-PPP’ acolytes, such as Desmond Trotman, Professor Clive Thomas and Eric Phillips being appointed to positions under SARA, saying this too has begun to have an adverse impact on the investment climate locally.
Jagdeo said he believes there are great developmental possibilities for Guyana’s future but government’s adopted stance of waiting on oil to rescue the economy will not work.
He said Guyana has available to it sufficient fiscal space and monetary tools in order to stimulate economic growth in the country, but this requires firm action on the part of government instead of the tightening of its monetary policies, such as increased taxation as was announced recently with the increased import duties for steel.
According to the Opposition Leader, Guyana’s revenue base has been declining not because of the numerous concessions that had been afforded the business community, but rather there has been shrinkage in economic activity locally and “Government has no clarity in where it is going.”