Govt has failed to present substantial economic policy – Jagdeo
Opposition Leader and former President Bharrat Jagdeo has stated that Guyanese are at a lost as to where the country is heading in terms economic growth, adding that the coalition Government has failed to present a substantial economic policy.
“I’m a politician and I tend to be partisan; I want the PPP (People’s Progressive Party) to get back in office and that’s my job, working towards that so maybe I don’t give them a fair chance of presenting what their economic policy is. But I’ve asked many people, who are supposed to be not partisan, not politicians and they are just as lost as I am about where the country is heading and a clear vision for taking it there cause it just doesn’t exists,” Jagdeo asserted.
Opposition Leader and former President Bharrat Jagdeo addressing the gathering at the Guyana Manufacturing and Services Association annual dinner
He was at the time delivering the feature address at the Guyana Manufacturing and Services Association (GMSA) Annual Dinner held at the Guyana Pegasus on Friday evening. According to the former President, the country’s growth rates for last year and this year are very anaemic.
Jagdeo went on to say that even the projection growth some of the sectors like sugar, manufacturing and construction are unlikely to happen. However, he noted that while the forecasted 3.8 per cent growth in the Gross Domestic Product (GDP) can very well happen, it will be only because of the mining sector, more specifically gold. He added that every other sector in the country is declining.
The Opposition Leader premised this argument on the country’s balance of payment data, which shows that earnings from gold exports have moved from US$469.8 million in 2014 to US$778 million in 2016 with a projection of nearly $800 million this year.
At the same time, however, the other major sectors pushing the country’s economic are on the decline. Jagdeo noted that rice exports reduced from US$249 million to US$182 million from 2014 to 2016; sugar from US$88 million to US$67 million from 2014 to 2016; bauxite from US$124 million to US$100 million from 2014 to 2016 and timber declined from US$53 million to US$40 million from 2014 to 2016.
“So these are the five major areas that are disaggregated… and four of the five have seen significant decline in exports in US dollars,” he posited. Turning his attention to imports, Jagdeo noted that only fuel imports in 2014 was recorded at US$573 million and fell to US$367 million in 2015 and then to US$327 million last year. However, this is projected to go back up to US$433 million in 2017.
“The improvement in our balance of payment has relied on two things alone: the drop of fuel prices, we saved a couple of hundred million dollars, and gold price skyrocketed between 2014 and 2016 by a few hundred millions – everything else has deteriorated… On the export side, gold has gone up and on the import side, there is savings in fuel but both are volatile,” Jagdeo surmised.
The former President pointed out that because a significant part of the earnings from gold are earned by large companies, it’s recorded in the exports but the bulk of the money does not flow back into the country.
Moreover, the Opposition Leader noted that while there has been a growth in imports, persons have been reporting a reduction in the numbers of containers that being brought in. This growth, he added, is as a result of the increase valuations by the Guyana Revenue Authority (GRA).
“So you have a reduction in the number of containers coming but it’s seen as a growth of imports because GRA bumps up the valuation. People bring in containers now are complaining that their containers are re-valued 30-40 per cent capriciously and so it creates the impression that more imports are taking place but in real sense, it’s a financial transaction. S people are concern,” he stated.
Jagdeo noted that he painted a benign picture of the country’s balance of payment and even with that, there is so much pressure already on the exchange rate. “If you paint a picture of the balance of payment evolving on the basis of what we know anecdotally then it gets worst because the real sector can’t support what’s happening there,” he said.
