The recent IMF report on the Guyanese economy is an object lesson on why the expression “lies, damned lies and statistics” is used so ruefully but with increasing frequency in economics. Economics has, for the longest while, marketed itself as the “queen of the social sciences” because of its use of statistical data that was supposed to undergird its “scientific” approach. But, as has been exposed in so many instances, the manner in which the data is presented can lead to assertions that are far removed from the lives of people. What does it mean, for instance, to tell Guyanese that the economy is “growing”?
But, rather inadvertently, even statistics can reveal the underlying reality that their presentations sometimes seek to mask — as was the case with the IMF report, which echoed the claims that the PNC-led APNU/AFC coalition government had been trumpeting. An interesting picture is formed if one places the performance of gold — which is doing so spectacularly on the backs of two foreign producers — in the centre of a graph that has the performances of the other contributors to the economy (say, President Granger’s ‘six sisters’) on either side of it. The gold statistic looks like the centre-post of a carnival tent that has collapsed around it. The question that is graphically posed is whether a tent is a tent when only the centre-post is left standing.
And this is the question the Government is dodging as it insists on contradicting the Guyanese people in general and the business community in particular – those who are experiencing the effects of the collapsed “economic tent”. By the Government’s insistent refusal to accept the collapse of the economy, there is exposed its cluelessness on policies it should actually be proposing and implementing to secure a more balanced and robust performance in sectors other than gold.
But what makes the Government’s lassitude and inertia in the economic field even more bewildering is that officials in change of this area are closing their eyes to the efforts other countries have made to confront analogous collapses in what, after all, has been a global problem since 2008. What they would discover is that the tenets of the neoliberal order that we bought hook, line and sinker in 1989 are, at the barest minimum, being questioned and, in many instances, being replaced. The assumption, of course, is that if one keeps repeating the actions that brought about the collapse, one is simply guaranteeing the continuation of that collapse.
What were those tenets that must be questioned and possibly jettisoned? The first one, of course, was “market fundamentalism”: that the market should be allowed to make decisions on the allocation and distribution of resources in a country. The corollary was the demand that the state become a “night watchman” who simply sits around to ostensibly “protect” the economy. If the state were to intervene in any way — through production of goods or regulation of the private sector in any way — it would introduce “distortions” in the smooth running of the economy.
Another tenet was that individuals and firms operated on the basis of what was called “rational expectations”. These tendencies are particularly noticeable in finance.
It was not that the neoliberals did not think crises, which appeared to be inherent in the economy, would disappear, but they assumed that the market and rational expectations’ approach would successfully deal with them. In the decade since the 2008 crash, they have not, in most of the developed economies that were hardest hit. But yet, Guyana was able to buck the trend until this PNC-led APNU/AFC coalition government took office. What happened?
If we examine the programmes of the PPP governments — especially those under Bharrat Jagdeo — we would see that the state played a much more interventionist role, just as even the US did when it pumped billions into private enterprise firms such as General Motors. Whether those roles were “Neo-Keynesian” or pragmatic can be interrogated, but it does not excuse the “don’t intervene” attitude of the Guyana Government.
