Home Letters Need for policy action to boost private investment is more critical than...
With thousands of young people entering the workforce each year; fiscal resources severely constrained; and economic, social and political risks on the rise, Guyana is at a defining moment in its history. Bolstering the private sector is critical to meeting this challenge.
However, the key to success remains elusive, principally because there is no trust between the regime and the real engine of economic growth (the business community).
Additionally, this policy arrogance on the part of Team Granger is fuelled by a myth that these oil investments would bring an end to all of Guyana’s troubles, and thus a marginalised private sector is no big deal.
But the empirical evidence points to a different outcome, if these oil resources are not managed transparently and with a long- term, sensible and efficient work plan.
The key to Guyana’s success remains in urgently unlocking the latent energy of private investments ON LAND, (both local and foreign), which would have a direct impact on the lives of the people. That will take genuine policy reforms to increase access to finance for the private sector, and improve the effectiveness of the public sector. Until that happens, we are wasting time in Guyana. The bottom line remains that there is an urgent need for a smaller government and a bigger private sector; not the other way around.
This is the ideological shift that Team Granger are struggling to appreciate. They have actually expanded the public sector by some 10 per cent since May 2015, and have taken active steps towards crowding out the private sector. The ratio of private investment to GDP at the end of 2018 is expected to be under 20 per cent of GDP, based on the latest projections (the Minister is yet to release the 2018 End of Year Report with final numbers, and it is almost April 2019).
With the private sector having such low confidence in the economy, there will be adversely effects on the economic health of the nation. This will directly impact the economic well-being of the people, especially those residing at the bottom half of the economy, who live mainly in rural and hinterland Guyana.
This lack of confidence is creating blockages for the nation in accessing the necessary technological innovations that can bring the promised economic empowerment and upliftment truly needed by the people. For all the years that Guyana existed as an independent nation, we are still a raw materials producer in the main, and to rub salt into our wounds, Jamaica is now exporting pigeon peas in tins to Guyana. This is something we used to do on our own, but we are no longer capable of doing at a commercial level.
The challenge is real, the quality of the school leavers is at the lowest level ever, the few infrastructure improvements are mired in massive corruption (see the CJIA Airport Project), and the capability levels in the Cabinet Room and at the Head of Department level in the public service are just plain downright incompetent. These people just cannot get the job done.
The need for policy action to boost private investment is more critical than ever in Guyana. Policymakers need to focus on surrounding themselves with the best minds and on the necessary reforms that can help the nation catch up with their peers on education, infrastructure, financial development, and governance. These reforms would help offset the headwinds from global factors outside the nation’s control.
For us to succeed, the days of ethnic marginalisation must be over. This voyage demands all hands on deck to shore up the nation’s economic resilience for the future.
Can they do it? What ever happened to “let us co-operate for Guyana” Mr. Granger?