Purchasing Power: By definition the purchasing power of a dollar decreases as the price level rises. If money income stays the same, but the price level increases, the purchasing power of that income falls. Inflation does not always imply falling purchasing power of one’s real income, since one’s money income may rise faster than inflation.
Although the minimum public sector wage was increased over the years, the purchasing power is reduced, due to the high inflation rate of 13 %. When VAT is taken into account, along with 19.1% increase in food items over the last six months, it is a big increase for goods and services. Government letter writer spokesperson John DaSilva needs to realize none of the improvements he stated in his SN letter on Oct 16 has made a monetary difference in the lives of our citizens. No major jobs have been created over the years, therefore even though we have had cosmetic changes, the purchasing power of the citizens has not increased.
We need a complete overhaul of our entire tax system; we cannot allow Government to continue to take $54 out of our taxable $100. Based on Present Value Tables, $1: in 1992, with a 10% Annual Rate, will buy goods and services of 0.24 cents today. At the current high inflation rate of 13.1%, $1 in 1992 will buy 0.16 cents of goods and services today. If a person invested $1 today for 15 years at 13% rate, that person will earn $6.47.
Transparency: From my old Air Force days, we were always aware that if you are flying a level flight and there is rising terrain, you would at some point crash. Our purchasing power is on such a collision course unless we pull up to avoid the rising terrain. Transparency is not a buzz word, it should be “res non verba” , deeds not words. With the announced TRIPS (Total Revenue Integrated Processing System), this will be a good start if TRIPS applies to all in Guyana, from the President down. This should not be a “selective system” to hunt for those persons, challenging the Government. It was recently reported, that for their TIN (Taxpayers Identity Number) Registration, registered to date were 30,000 taxpayers and 50,000 companies with another 80,000 Individuals and 1,000 Companies to register. This is evidence of “lack of support” from individuals with a burdensome tax collection system.
Next Steps: Government must think global and act local to develop the infrastructure and business-friendly policies to attract local, Caricom, and global businesses that will create jobs and increased tax revenues. All local and foreign businesses must train Guyanese, in all areas to manage their operations, with a minimum number of expatriates. These jobs should also be open to Guyanese in the Diaspora, who possess the required qualifications and experiences.
Guyana’s Embassies and Consuls should create and maintain a data list of Guyanese in the Diaspora, who are available for service to the Motherland, Guyana and not treat them with so much suspicion as in the past. India’s NRI (Non Resident Indians) are making a valuable economic contribution to India’s superb growth. When will NRG (Non Resident Guyanese) feel confident to do the same for Guyana? Guyana needs more business oriented super-capitalist persons to create wealth for all, with an improved quality of life.
US Ambassador His Excellency Mr. David Robinson is doing his best to encourage, the Diaspora’s investments from New York and Miami, with his presence at many meetings, but Guyanese in the diaspora are very savvy investors, and will invest where there is good governance and reasonable return on their investments.
Until next week “Roop”