A 14-Month Report Card of APNU+AFC Government: B-

20150311development watchAnyone following my columns and letters in the last 10 years would know that I am strongly in favour of a middle group of voters who will swing their votes willingly as a disciplining mechanism of the entrenched political class. Regular democratic turnover is perhaps the best political option for Guyana since the two main political parties do not have an incentive to rewrite an appropriate constitution. It was from this perspective – not to take anyone’s job – I supported Brigadier David Granger for President and the APNU+AFC coalition. At this point, I don’t see a viable alternative to the present government since the main opposition is bleeding from a wide credibility deficit. However, new information is always forthcoming and as J.M. Keynes said, we must be willing to update our perspectives when faced with a new information set.

The government has succeeded on several important fronts, but these have been crowded out by an apparent eagerness to regularly shoot itself in the foot. As President Granger and his foreign policy team succeeded in putting Maduro in his place, the 50% salary increase fiasco broke out. The reason given for the increase was flimsy at best. All these ministers are well-off by Guyanese standards – a few quite rich. They have lost much credibility in dealing with the crucial issue of public service pay. The President is right to propose that government workers should be paid for their productivity, but selling this from the moral high ground is greatly diminished. Nevertheless, there continues to be progress in debunking the spurious border claim by Guyana’s natural enemy, Venezuela. Last week President Granger and Minister Greenidge were able to secure CARICOM’s commitment on a juridical settlement.

The capital city is much cleaner, but a lot more has to be done to get it up to the level of UNESCO recognition. The illegal vendor crisis was allowed to continue for decades – perhaps encouraged – under the watch of a PNC strongman. Time will tell if they can put this genie back in the bottle. They must know, however, that garbage and shanties mean no UNESCO recognition and no heritage tourism. There are many ways to improve the well-being of the poor vendors. Illegal vending is certainly not one of them.

There has been significant progress in arresting the crime situation, thanks largely to the efforts of the President, Minister Ramjattan and his security team. My eyes as a statistician can see the decline. It does not mean there are no violent crimes and robberies; it just means statistically the rate has declined and things are moving in the right direction. For the first time in about 20 years criminals are regularly apprehended. There has to be fast-track prosecutions, possibly hangings. The underground economy is being disrupted, but more has to be done to focus GRA in the right direction – namely getting the self-employed professionals to pay their fair share of income taxes instead of the bizarre policy of increasing taxation on manufacturers. Except Great Britain and Hong Kong, I can think of no other country which nurtured a manufacturing sector through laissez-faire capitalism. The suicide epidemic has subsided for now, thanks mainly to the President’s direct activism. The central government (not Georgetown municipal government) shows a willingness to respond to public criticisms, a welcome deviation from the previous unresponsive PPP.

Professor Griffith, the new Vice Chancellor of UG, appears to be pressing all the right buttons. He is aware of the problems facing the university and how to fix them. Guyana desperately needs a very good research-teaching university given the myriad problems the country faces. Local solutions have to be developed and these usually emanate from a university. Ultimately it is the faculty – the teaching researchers – which makes a great university, not the politicians on the board. Expert in-house faculties develop curricula, not the previous hokum of paid consultants developing university curricula.

However, there should be caution over the fetish of a pure STEM education. As numerous CEOs in the United States have expressed, a balanced STEM and liberal arts education is best for stoking creativity and innovation. Quantitative social sciences are also necessary given the many social challenges. Indeed, the National Science Foundation of the United States recognizes several social science subjects as STEM, such as quantitative economics and psychology. UG also needs quantitative sociology.

The economy is muddling through at around a 3% GDP growth rate. As we noted in the last column, private investment was flat from 2014 to 2015. Government investment decreased significantly but government consumption increased noticeably. Household consumption declined by about G$15 billion from 2014 to 2015. All these occurred within the context of a low oil price and respectable gold price. On the bright side, there seems to be a turnaround in the stock of international reserves of the central bank. The stock declined from US$652 million in 2014 to US$595 million in 2015, but increased to US$611 million at the end of May 2016.

It is obvious the government gave passing thought to economic planning, possibly because everyone wanted to be a Minister, thereby forcing an unwieldly and cumbersome cabinet in which no one sets the overarching economic vision. Prior to the May 2015 election many people were so protective of their turf that they did not think much about macroeconomic planning. And I am not writing about old-fashioned 5-year economic plans. The immediate task of a new government – in the first month – is to have its economic team reassure private investors with a list of realistic proposals, not the usual things like the Guyana-Brazil road and Amaila hydroelectric plant, which we all know are way into the future and require billions of US$ financing. This proposal must be based on certain core principles that address the natural and man-made barriers to investment. If this is not done sentiments become pessimistic and investors discount the future at a higher rate. Consumers pull spending as they wait and see.

There are several important issues outstanding including constitutional jettisoning and rewriting and public procurement reform. The government has to make sure the Indo-Guyanese employment rate in the public service does not go back to pre-1992 levels. A keen eye has to be focused on mid-level HR directors who typically tend to have a preference for people from the same church and social networks. It is just not sufficient to have a sprinkling of Indo-Guyanese at the upper level of government and allow marginalization at the mid and lower levels. By 1992 prestigious semi-autonomous agencies like Bank of Guyana had at most 2% Indo-Guyanese employees, when at the time they accounted for 50% of the population. The issue of ethnic balance of the army has to be addressed. The latter, including National Service, is perhaps the best option to see the permanent decline of the PPP which has an electoral strategy that hinges on fear and insecurity among Indo-Guyanese. It is just not enough to say since the PPP didn’t do it we don’t have to.

Comments: tkhemraj@ncf.edu

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