Guyana cannot afford so much public investment in private ventures

Dear Editor,

Today our letter is going to expose the myth that Guyana’s economy is on a solid foundation during the current era.  This is nothing but a myth and more propaganda from the ruling party which continues to distort the truth. Here are the facts.

With the Economic Recovery Programme (ERP) taking effect in 1988 under Hoyte/Greenidge it resulted in Guyana turning the corner economically.  The PPP called it ‘Empty Rice Pot‘ but if it were not for the ERP, Guyana would have been the Zimbabwe of Latin America today. With a combination of the Hoyte/Greenidge public policies closely followed by those of Dr Cheddi Jagan and his able Finance Minister Dr Asgar Ally, Guyana experienced explosive investment which kicked off an average economic growth rate of 7% between 1991 and 1997.  These policies fostered and encouraged private sector investments unheard of in the history of the nation.  The chart below extracted from the IMF records supports this position.

As the graph above shows, Investment under Hoyte averaged over 40% of the GDP during the years 1990-1992.  Under the Jagans between 1992-1999, investments averaged from 35% of the GDP under the good Asgar Ally days to the just under 25% by the time Janet Jagan left office.

The facts get quite interesting since after the departure of Janet Jagan, investment in the economy averaged 20% of GDP, save and except for the year of the great flood – 2005 when mandatory state investment had to be made on emergency repairs to the infrastructure. The situation got so bad that in 2009, Guyana had investment of 16.5% of GDP—a fact the the government has failed to recognize and instead has put out questionable figures with the intention of fooling the populace.

But what is more shocking is the fact that since 1999, the regime has been using public investment to crowd out private investment in the economy.  This is an economic precedent that comes out of the playbook of the failed communist system. Private investment is usually a barometer of the confidence the private sector has in the economy and in 2009, private investment was a meagre 4% of GDP as compared to 28% of GDP during the Hoyte/Greenidge era.

As we analyze the data to understand what is happening to national investments we arrive at the following conclusions:
Under Jagdeo and now Ramotar, there has been an absence of new reforms to entice a second wave of foreign and local investors to continue the first wave unveiled during the Hoyte /Jagan era.

There is a manifestation of the ideology of those in power as they use the Treasury to crowd out the traditional private sector and replace them with a closely knit group of business buddies who owe their wealth to their political sponsors in the party.

There is weak institutional capacity, especially at GO-INVEST which was made impotent in respect of attracting new investors.

This is why we are convinced that these public /private partnerships will continue since they must feed the greed machine.

The IMF in a working paper clearly found evidence that corruption of this nature does contribute to greater income equality and poverty in a nation.  This is tantamount to pouring good money after the undeserving ruling class and their friends and starving the poor.  This is a certain recipe for reducing economic growth, retarding the formation of human capital and perpetuating the unequal distribution of asset ownership and ensuring unequal access to education and health.

That is why mothers of the working class continue to die at the public hospitals in increasing numbers, children who do not have access to wealth are disadvantaged in the public education system and only a few can build Taj Mahals while many still live in unsatisfactory housing like the mothers of Plastic City who live in unsanitary conditions.

We call on the Parliament to interrogate all these deals since they are based on a flawed philosophy that is designed to enrich the few with a strong political connection to the ruling class, while impoverishing the rest of the nation, especially the poor and the working class.  This is clearly a development policy that does not reflect sanity.

Why does the government have to underwrite 86% of the Marriot project when the hotel occupancy rate in Guyana is only 50%?  Let a thousand private investors blossom and stop this nonsense of the enrichment of a few and their political sponsors. We call on the majority opposition and the masses to challenge the PPP and stop this madness. Guyana cannot afford so much public investment in private ventures.

Yours faithfully,
Asquith Rose
Harish S Singh 

More in Letters

default placeholder

Bid Protest Committee ‘resignation’

Dear Editor, The Stabroek News article captioned ‘Chair of Bid Protest Committee resigns’ published in its July 27, 2016 edition is false.

default placeholder

Ministry of Public Infrastructure has budgeted for work on Leguan roads to begin in August

Dear Editor, Reference is made to the letter published in the Monday July 25, edition of the Stabroek News by Mr Hans M Buer, under the headline ‘Leguan roads are in a terrible state’.

default placeholder

Indigenous patient who broke bone on July 20 told by GPH to return August 8 for setting

Dear Editor, For years Indigenous people have struggled to cope with the health system which seems to have been designed without our people in mind.

default placeholder

Prof Persaud had a distinguished career in the Commonwealth Secretariat

Dear Editor, It was only last week in one of my pieces I mentioned that there are a few outstanding Guyanese in the diaspora.

default placeholder

Passengers treated with utter contempt at the Essequibo ferry stellings

Dear Editor, I don’t know why more people who travel on the Parika to Supenaam ferry service aren’t writing to defend the gentleman who was made to wait several hours, while other people who came after him were allowed to board the ferry.

default placeholder

Public expectation of politicians has hardened

Dear Editor, It is with surprise that one reads of reaction to the structure, functioning and legal basis of the anti-corruption unit SOCU, and of reservations about SARU.

Comments

About these comments

The comments section is intended to provide a forum for reasoned and reasonable debate on the newspaper's content and is an extension of the newspaper and what it has become well known for over its history: accuracy, balance and fairness. We reserve the right to edit or delete comments which contain attacks on other users, slander, coarse language and profanity, and gratuitous and incendiary references to race and ethnicity.

Stay updated! Follow Stabroek News on Facebook or Twitter.

Get the day's headlines from SN in your inbox every morning: