Sanctions will turn Guyana into int’l pariah – financial analyst

There is no future scenario to contemplate where a positive can come about from undemocratic rule, and Guyana under an illegal government will become a pariah state, subject as a country, but not limited to, expulsion from the international and regional communities.

This is according to Financial Analyst and former President of the Georgetown Chamber of Commerce and Industry (GCCI), the former Vice Chairman of the Private Sector Commission (PSC) of Guyana, Deodat Indar.
The local business leader and financial analyst was at the time weighing in on the likely impacts of international sanctions on the country as a result of the current political impasse.
Indar, in a recent warning from the business community, said the status quo would attract sanctions in addition to those which have been threatened against individuals that are found to be complicit in electoral fraud.
He said an expulsion of Guyana would lock out the country from accessing finance from international funding agencies such as the World Bank, the International Monetary Fund and the Inter-American Development Bank, among others.
“Needless to say, this would drastically retard development and severely damage, with all of its social ramifications, the way of life of the Guyanese people,” he explained.
He said, too, that “sanctions will further manifest themselves by global banks being issued instructions from the US Treasury Department’s enforcement arm, the Office of Foreign Asset Control (OFAC), to bar financial transactions from being routed thru the USA.”
Indar has since posited that other countries, such as Canada, the United Kingdom and the European Union, “will put similar arrangements in place to bar wire transfers of funds from being routed thru their registered banks and jurisdiction(s) which they control.”
According to the local analyst, “The isolation of Guyana will result in a suffocation of business to their death. Payments for imports will not be able to be completed, thereby starving Guyana of essential materials for plant and machinery, branded goods, parts for manufacturers and retailers, trucks, cars, clothing, and all other forms of imported goods we use and consume as citizens.”
Speaking further to the implication of international sanctions being applied to Guyana, Indar warned that trading of Guyana’s gold on the world market can be frozen, and remittances from countries such as US, Canada, UK and EU would be prohibited.
He said that, faced with the sanctions and international isolation, Guyana will be forced to use up the little reserves we have at the Central Bank, which is approximately 2.5 months of import cover based on the reserve level at the Bank of Guyana.
At this point Guyana, he said, “will find itself bereft of the kind of resources’ levels to sustain the needs of businesses and their operations…Businesses in Guyana may be expected to die out within six months to one year.”
Additionally, he suggested that “when this kind of shortages of goods and currency are imposed on an economy, it results in unmanageable inflation, escalating further and deeper into hyperinflation, driving the poor to the brink of mass starvation.”
The chain reaction, he argues, will trigger mass migration out of Guyana, thereby weakening local demand and resulting in the ultimate destruction of the entire fabric of the Guyanese society.
“A frightening scenario exists where Government starts to nationalise private institutions. At this point the decay of the economy starts to accelerate. This acceleration, in most cases, leads to rationing of goods and services. We saw this in Guyana in the early days of the 60s, 70s and 80s. Other countries, such as Germany in 1923, experienced a loaf of bread costing 10 billion German marks due to hyperinflation.”
According to Indar, despite the hardships and woes that will befall the nation, “national debt has to be repaid, Government apparatus and budget agencies will have to provide some services to citizens. This is expected to be paid for thru taxes.”
Taxes, he said, will then strangle businesses, as there will be a sharp reduction in business without the corresponding reduction in costs.
According to the former business representative at the PSC and GCCI, “Further joblessness will follow, as businesses wind up. People will take to the streets in desperation, put down by politically directed police and military serving an illegal government. The sum of all of this will be an economically and politically bankrupted Guyana.”