When sugar and rice sneezes, Guyana catches a cold. It is an old adage that has always been associated with the Guyanese economy. Therefore it was quite surprising to many that the Administration failed to conduct a proper social and economic impact study on the sugar belt before moving forward on the decision to close Wales Sugar Estate at the end of 2016. Only recently, following an International Monetary Fund (IMF) team visit in Guyana, the preliminary findings in its report ‘IMF speak’ warned the Government to be “mindful of the large social impact” and the “need to protect those affected” by the process of change in the industry.
Today, we are witnessing a rapid tumbling of the foreign exchange rate. However, the Administration is attempting to cast aspiration on all and sundry rather than look inwardly. The Government even dismissed civil society organisations, the Guyana Manufacturing and Services Association (GMSA) for speaking on this issue. All the GMSA was doing was its job as a Private Sector organisation by independently advocating on the issues that are affecting its membership.
On March 31, the Bank of Guyana released its Banking System Statistical Abstract for February 2017. This is a critical tool for financial strategy in any country. It is prepared by the Central Bank with assistance from the Finance Ministry, the Bureau of Statistics and the commercial banks. What was revealed in that document reinforced what the Private Sector and the Leader of the Opposition and former President Bharrat Jagdeo had been saying all along. It was former President Jagdeo who said “the Government’s policy is driving the foreign currency market into a panic”. The GMSA even went further to urge the authorities to “take immediate step to stabilise the value of the local currency.” But according to the figures we are now seeing in this Central Bank Report, the “boat done gone a falls”.
The report illustrated that at the end of February 2017, the Net International Reserves at the Central Bank was US$594.4 million, a decline of some US$45.4 million from a year ago. If we add the foreign currency in the vaults of the commercial banks into the equation, the situation is even worse. All the evidence is now pointing to the economy actively heading back to the days of 1976-1979 when, because of grave mismanagement of the economy under the then People’s National Congress Government, the real per capita income cumulatively declined by 25 per cent according to a World Bank Report published in 1984. And it only took less than two years this time.
Guyana experienced cumulative positive growth for its people since and continued under all of the People’s Progressive Party Government. So much so that the GDP per capita in 2015 was 10 times what it was in 1992. From the very inception, it required a partnership between the Government, the Private Sector, and civil society. This is what is lacking today under the present Administration.
Guyana has always been about the six sisters as President Granger describes them (rice, sugar, gold, bauxite, forestry and seafoods). But the manner in which this Administration continues to treat the productive sectors, especially the sugar and rice sectors, is starting to show serious symptoms of economic stagnation. No amount of new taxation measure can turn this situation around. It requires positive public policies continuously that will return confidence in the economy.
This inability to formulate positive public policy continuously after some two years at the helm has already brought great hardship to the ordinary people. President David Granger cannot remain a bystander to this issue. He has to lead.
