President Bharrat Jagdeo has dismissed the country’s recent low ranking for economic freedom, while he disclosed a plan to invite researchers here to dispel fictions about the situation on the ground.
“I am not too bothered with a conservative right-wing body’s ranking of our country,” he told a press briefing on Monday, reacting to the findings of the Wall Street Journal/Heritage Foundation 2009 Index of Economic Freedom that gave Guyana an economic freedom score of 48.4, ranking it 155 of the 183 nations that were surveyed. “I feel we have one of the freest economies in this part of the world, more than many countries in the region,” the President said.
In this year’s ranking, the country’s overall score is 0.4 of a point lower than last year because improvements in four of the 10 economic freedoms were offset by a large decline in the government size score. Guyana did not rank strongly in any category of economic freedom and was only slightly above the world average in labour freedom on the Index, which said although macroeconomic and financial-sector stability has been maintained, the average economic growth over the past five years was only about 1%. It concluded that an “oversized” government is the largest challenge to the country’s development.
The Index grouped Guyana among economically “re-pressed” nations, and ranked it below Haiti at 27 of the 29 countries surveyed in the South and Central America/Caribbean region Only Cuba and Venezuela were ranked lower in the region.
Jagdeo, however, laughed off the Heritage Foundation as a “conservative” body that promotes western interests. He accused the body of being susceptible to influence and said that if an American investor has experienced difficulties the country could be marked down.
The President also criticised researchers who compile various international indices for having “a serial way” of repeating their findings. “I plan to bring quite a few people who do these indices… so that we could then go through what is fact and fiction,” Jagdeo said. He noted that most of the information used to compile the findings is anecdotal since no one from the Heritage Foundation has visited Guyana. Further, he pointed out that two of contributors to the Index are accountant Christopher Ram and someone from the Ram and McRae accounting firm and he questioned why no one from any other accounting firm was consulted.
Jagdeo also said that unlike many countries in the region, Guyana does not have foreign exchange controls, restrictions on foreign investment in any sectors, restrictions on repatriation of capital or an alien’s land holding act to prevent foreign nationals from holding land.
According to the Index, Guyanese face substantial constraints on their overall economic freedom. It said property rights are protected only erratically under the weak rule of law and that corruption is a problem in all areas of government. It identified the biggest barrier to development as Guyana’s oversized government, noting that expenditures exceed half of GDP. It added that significant restrictions on foreign investment have been addressed only marginally, and these restrictions, combined with an inefficient bureaucracy, substantially limit investment and business freedom.
Scores are computed based on 10 broad factors of economic freedom, using statistics from organizations like the World Bank, the IMF and the Economist Intelligence Unit. Equal weighting is given to Business Freedom, Trade Freedom, Monetary Freedom, the Freedom from Government, Fiscal Freedom, Property Rights, Investment Freedom, Financial Freedom, Freedom from Corruption and Labour Freedom. Each indicator is graded on a scale of zero to one hundred, with the latter representing the maximum freedom. A country’s overall score is based on an average derived from the total score.