– at halfway point 2017
What difference does a half-year make? The Bank of Guyana publicized its Half Year Report for 2017 this month, a few weeks after the Finance Minister released his half-year status update on the economy. Let us reflect on this important period in what is looking more and more like a one-term Granger Presidency.
2.2%
That was the announced growth of the Guyanese economy during the past six months, in real terms. But I question this figure, because the performance in the real sector just does not add up. Fact! Four out of the six sisters have regressed during this period (sugar, gold, forestry, and bauxite); but yet the Bureau of Statistics declared a growth rate. Plus, if you discount the contribution from the two large foreign gold companies incubated by the PPP, we are definitely in a negative growth zone.
The question the overwhelming majority of Guyanese are asking themselves is: Why am I not seeing my personal wealth and my lifestyle improving too, because of this growth rate? The growth of this small, open economy is clearly driven by domestic consumption, but where is this domestic consumption really coming from? Householders are now starting to default on their loans at the banks at an increasing pace, so they do not have the resources to drive aggregate demand. It is all a Jordan MYTH!
Too many people in the middle and working classes have complained to me on how their lives has become so much harder since 2014. They claimed that this period of austerity that started under former President Ramotar has intensified under President Granger. Whatever has happened to all those promises made by Team Granger in 2015? Plus this snake oil illusion that they are trying to pull off with this oil dream has ZERO relevance to the people in 2017, 2018, 2019 and 2020. For them, these years will become increasingly more challenge as hard guava season steps in. If you carefully evaluate the performance of Team Granger, you will struggle to find evidence of what they have done for the people lately. In 2015, Team Granger promised six per cent growth rate; today it is more under two per cent. Where is the good life?
6.7%
The monetary aggregate of reserve money has contracted by 6.7 per cent, while even broad money has fallen by 1.3 per cent. The former was attributed mainly to a decrease in both net domestic and net foreign assets, while the latter primarily reflected lower net domestic credit and net foreign assets. Credit to the private sector declined by 1.0 per cent. What does this mean, and how has it impacted economic growth?
The plain truth is that people are not borrowing because they are not investing in Guyana, and this has resulted in less money circulating in the economy; which continues to squeeze everyone adversely, save and except for the members of the Granger cabal. This begs the question: did the majority of the people vote for Granger so that his cabal can get fatter?
Clearly, the more important point and the most worrying is that there seem to be coming out of the Granger government very little new ideas that are adding value to the agenda of turning around the economy. Because of this poor economic performance under President Granger, the impact on the extreme poor will only get worse, and this is an indisputable fact.
The literature clearly points to the fact that Guyana must grow at a rate at six per cent or above before the lives of the people at the bottom of the economic scale (the poor and the vulnerable) can improve. I do not see this happening under the ‘clueless’ Minister Jordan. With such a zigzag performance, the people must fortify their minds into not being surprised with negative growth before 2020. And the uncertainty continues!
