…as foreign exchange shortage takes toll on markets
The shortage of US currency on the local market is beginning to take its toll at the grassroots level. This was evident this past week when Opposition Leader Bharrat Jagdeo led a small delegation on a walk-about of the Stabroek Market in downtown Georgetown and engaged particularly those in the business community, including vendors and other hucksters.
Jagdeo was joined by his economic advisor, Dr Peter Ramsaroop, who subsequently briefed this publication on the findings of the People’s Progressive Party Civic (PPP/C) team.
According to Dr Ramsaroop, the PPP leaders heard numerous complaints of the calamitous effects of the APNU/AFC Administration’s handling of the economy, which are now having a trickledown effect on even hucksters, many of whom are thinking about shutting shop.
Dr Ramsaroop said the Opposition Leader undertook the engagement in part to get a direct appreciation of the economic impact of Government’s policies at all levels of society.
In an interview with this publication, during which he spoke on the findings, Dr Ramsaroop said, “The mood of consumers and business owners, including vendors, was at an all-time low”.
According to him, many small business owners and vendors complained bitterly that the Government had not just cleaned up the city, “but also cleaned them out of any economic gains they were having prior to (Government) taking over; and many said they did vote for the change, but now regret it.”
Dr Ramsaroop told this publication that vendors complained vociferously about the lack of sales and increased prices for produce.
According to the economist, “Ultimately, the foreign exchange money scarcity is affecting the small businesses. The purchasing power of the Guyana dollar has reduced significantly.”
He cautioned businesses “to develop business relationships with multiple banks in order to maintain alternative avenues for currency exchange”.
Government has blamed the hoarding of US currency by some in the private sector as being responsible for the shortage, while others point to the decline in foreign earnings on exports in recent years; but according to Dr Ramsaroop, “With exchange rates on the rise in our nation, and given (that) our dollar is pegged to the US dollar for exports and imports, we are now seeing the rise of goods all around us…Given the heavy taxation already upon us (200+new taxes), (the) cost of living going up, and now having to pay more on water, electricity, education, etc., our money at the end of the month cannot feed our families. Foreign direct investment has dried up.”
The economic advisor said Finance Minister Winston Jordan “is the only Finance Minister in the world who would say ‘the economy will right itself’ even without any sound economic development plan for the nation.” This, Ramsaroop believes, is “a trend of simply ignoring the inevitable of the economic collapse.”
Looming Increase
Using the occasion to warn of another looming crisis to compound the situation, Dr Ramsaroop since the cost of transportation by road is bound to increase in the coming days.
He told this publication that during the engagement by the PPP leaders, many of the minibus drivers who gathered around Dr Jagdeo complained vehemently about the ban on used tyres.
They explained that the roads in Guyana are not meant for new tyres at the price they have to pay.
According to Dr Ramsaroop, many said that when they have to do off-road runs, and potholes or other debris cut their tyres, they have to find in excess of $20,000 to buy a new one — the equivalent of a monthly mortgage for some. He said that the drivers, including those working taxis, have said the policies of the Government are gravely affecting their economic well-being.
“Some even complain that the new tyre dealers were ripping them off by bringing in expired new tyres and charging excess cost, when the used tyres can last longer, as many of the new tyres coming in have expired dates,” Dr Ramsaroop said.
He, accordingly, is of the view that the cost of transportation across the spectrum will undoubtedly increase in the near future.
The economist posited out that in light of the coalition government’s track record of intransigence when it comes to even addressing the pleas of the poor and vulnerable, he does not envisage Government reversing its decision to ban the importation of used tyres.
According to Ramsaroop, “Heavy taxation has already negatively affected consumer spending, and many stores seem empty of customers.
As jobs are cut in major sectors such as sugar and forestry, many are reducing their spending simply because they have no money, and others are trying to conserve whatever little they have since the future appears very uncertain.”
According to Jagdeo’s economic advisor, “When there is VAT on education, lumber, electricity, water, UG fees on the rise…these tectonic pressures and an incompetent government have tanked our economy. In the almost two years that David Granger has been President of Guyana, we have seen too many things slaughtered, including our booming economy he inherited in 2015.”
He said “As in the Bible and the story of David and Goliath, another prophecy seems to have come true: that someone can actually take a healthy economy, where jobs, money and investments were evident — decades of GDP growth — and transform (it) to an economy with heavy taxation, no foreign investments, major scandals by Government officials, and capital flight as the exchange rate skyrockets….”
According to Dr Ramsaroop, there isn’t good news from any of the other pillars of the economy either, since “not just David, but here comes Moses; he parted the Red Sea and dried up the rivers for the Israelites to evade Pharaoh’s Army…Fast forward to 2017 and we have another Moses with plans to close the sugar estates (and) put hundreds of workers out of jobs with not a serious thought about their long-term welfare and the breakup of settled communities.”
Dr Ramsaroop surmises that Government’s “bet is on oil”, but he said that “given market prices, production and refinery costs, Exxon having to recover all their expenses first, we may all be swimming down the Jordan River…This cannot be allowed to take place.”
