Guyana’s economy in serious crisis

first_imgDear Editor,In his 1993 Budget speech, the Senior Minister of Finance, Asgar Ally described the hopelessness that the PPP inherited from the PNC after the 1992 general election, saying: “The task we have inherited can be compared with that of a man who is required to climb a mountain with both his hands and feet tied and a heavy haversack on his back.”One year earlier during his 1992 Budget speech, Carl Greenidge, who served as Guyana’s Minister of Finance under successive PNC administrations for nine years (1983 to 1992), described the imbalances facing the domestic economy as “high and rising levels of inflation; extreme and damaging exchange rate volatility; the loss of foreign exchange reserves; a growing gap between the official and parallel market rates for foreign exchange, and an increasingly virulent and ubiquitous parallel market; and declining investment, production and job opportunities”.And one year before that, in his 1991 Budget speech, Greenidge described the Guyana domestic economy as facing “two fundamental problems… severe fiscal imbalance and severe external disequilibrium… there was also uneven economic growth and a decline in GDP”.In a letter (on September 24, 2017), “The APNU+AFC inherited a Guyana that was completely decayed”, Jerrick Rutherford asked that I use “accurate facts and statistics”. While my letters are always fact-based, the statistics given below also allow me the opportunity to debunk the newly appointed PNC ‘propaganda’ Minister, Amna Ally, who shamelessly propagates that Guyana experienced “unprecedented nation-building efforts [sic] in every aspect of human endeavour” under successive PNC Administrations from 1964 to 1992, and that all of the major housing schemes, arterial roads, drainage and irrigation schemes were built while the PNC was in Government. I invite both Ally and Rutherford to read the 1992 World Bank Report on Guyana that can be found here: http://documents.worldbank.org/curated/en/840881468033639594/pdf/multi0page.pdfMinister Ally should also explain to the nation the failure of the PNC to “feed, house and clothe the nation by 1976”, a promise that was made by the Kabaka himself, the late Forbes Burnham.For had it not been for the PPP, over 100,000 Guyanese would not have been landowners or homeowners today. But like its predecessor, the APNU can never be trusted to keep the promises made to the Guyanese people.Well, here are some more facts and statistics to illustrate just how bankrupt the Guyana economy was when the PPP took office in 1992, so that Minister Ally can refresh her failing memory, and Rutherford can compare that with the robust economy that the APNU+AFC coalition inherited in 2015 from the PPP/C.During the period 1984 to 1992 under the PNC, the Guyana dollar depreciated from G to US to G5 to US, an increase of over 4000 per cent.In 1992, the PNC, of which President David Granger, Carl Greenidge and Amna Ally, were part, left the newly-elected Jagan Administration and the people of Guyana heavily in debt.From US.8 million in External Debt in 1964, to a whopping US.1 billion when the PNC left office in October 1992.As a consequence of imprudent economic and borrowing policies of successive PNC Administrations, the economy could not generate the resources necessary to service the external debts. And in 1985, Guyana became ineligible to access the resources of the International Financial Institutions, notably the World Bank; the International Monetary Fund (IMF) and the Caribbean Development Bank (CDB).During 27 years of the PNC, Guyana was the only country that reflected a zero per capita income growth. By comparison, Barbados’ per capita growth was 1100 per cent; Trinidad 400 per cent; and Jamaica 260 per cent. In fact, even Haiti, which was the poorest country in the Western Hemisphere, performed better than Guyana. Haiti’s per capita income grew 400 per cent compared to Guyana’s zero.The Guyana economy was indeed in a perilous state, and in general, the country’s infrastructure was in a state of disrepair. This is what the PPP inherited. (source: The 1993 Guyana Budget, and the 1992 World Bank Report).Now let us examine where we came from, and what the APNU+AFC coalition is doing to put us back there.From a bankrupt economy inherited from the PNC in 1992, the PPP/C, under the stewardship of the financial wizard Bharrat Jagdeo and later Dr Ashni Singh, was able to miraculously transform the Guyana economy, leaving a whopping US0 million in Foreign Exchange Reserves for the newly-elected APNU+AFC Government in May of 2015 (source: theGlobalEconomy.com).According to the Bank of Guyana’s Key Macro Economic Indicator, Guyana enjoyed nine consecutive years of economic expansion under the PPP/C, averaging 4.6 per cent despite severe global economic and financial crises that have seen the collapse of other economies around the world. Guyana was indeed on the rise with the fastest growing economy in the Caribbean. But this was short-lived.In 2015, under the APNU+AFC, real growth dropped to three per cent although the Bank of Guyana, in its 2014 Annual Report, projected the Guyana economy to grow by 5.3 per cent. But without the prudent management of the PPP/C, the Guyana economy has been on the decline since, and continues to limp along as evidenced by the meagre 2.2 per cent expansion in real Gross Domestic Product (GDP) posted for the first half of 2017 (Source: Bank of Guyana and Ministry of Finance). This precipitous decline was not because they were clearing out drug money from the economy or because they inherited a bankrupt economy, but rather, because of ineptitude, bad leadership and poor policies.I have nothing but empathy for the likes of Jerrick Rutherford who feel they have an obligation to parrot the lies of the APNU+AFC propaganda machine without knowing the facts, for I have walked that road before. But the fact is, Guyanese were much better off under the PPP/C and all this talk of a “better life” under the APNU+AFC has been nothing but an elusive dream to Guyanese who voted for “change”. Undoubtedly, the Guyana economy is once again in serious crisis. But don’t take my word for it.The following was taken from an editorial (in one of the newspapers on July 8, 2017):“Many, including the opposition, have already expressed their disgust over the 50 per cent increase in salaries of some Ministers who were in office less than three months, the $1.2 billion D’Urban Park project, and the millions spent in tuition fees for two junior ministers.So there is no need in revisiting such reckless spending of the taxpayers’ money, except to say that the President and his cabinet should lead by example and end the wasteful spending that they have foisted on the nation. It is worthy to point out that all this is happening at the same time the government is closing several sugar estates and putting thousands of sugar workers on the breadline.If the people thought that such extravagant spending was bad enough, the government has made a public spectacle of itself with the rental of a house for $500,000 per month for a Minister… Unfortunately, ministerial perks and benefits, especially the frequent overseas trips by ministers during the past two years, have put a dent in the country’s finances. This contradicts the criticisms levelled against the last administration by this government when it was in opposition. This lack of transparency and accountability could tarnish the government’s image.”The editorial forgot to mention the rental of a drug bond for $12.5 million monthly; the approximately $40 million it cost taxpayers to renovate Prime Minister Nagamootoo’s official residence; $20 million for the Office of the Prime Minister – over $10 million in furniture for the PM’s office; $22 million budgeted for his new luxury vehicle; and the tens of millions being spent to renovate the Ministry of the Presidency and the construction of the presidential green wall.I was asked to use “accurate facts and statistics”. But now that I’ve done so, would this really change the perception that Jerrick Rutherford has of the PPP? Or would he remain a pathetic apologist for the PNC/APNU.Sincerely,Harry GillPPP/C Member ofParliamentlast_img

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