The supposed decline in the narco economy since APNU+AFC came to power in 2015 is often proposed by two very vocal members of SOCU – Mr Eric Phillips and Mr Tacuma Ogunseye – as the main factor for the depreciation of the Guyana dollar. Their basic thesis rests on the notion that trafficking of narcotics generates a lot of foreign exchange for the Guyanese economy. Indeed, supporters of the government submit this alibi as the primary reason for the slowdown in important sectors of the Guyanese economy. Notice, I wrote sectors and not economy. The aggregate economy grew at around 3% mainly because of low-quality growth in the mining sector. However, as noted in the previous column, sectors requiring intermediate inputs (primarily manufacturing and agro-industry) are doing poorly. I will explore in a later column the foreign currency implications of the situation in which the GDP is growing but the economy is suffering from structural malaise and limited foreign exchange earnings.
