The Private Sector Commission’s Review of the Guyana Economy in 2009

By Jacquelyn Hamer

Jacquelyn Hamer is a retired Guyanese diplomat and a Director of the skills training organization Visions of Excellence.

Some things about the Private Sector Commission’s 2009 Review of the Guyana Economy were   disappointing. 2009, after all, was a significant year, given the overall performance of the global economy and what we understood to be the impact of a financial and economic crisis that affected every region of the world, including the Caribbean. It transpired that the 2.3 per cent growth in the economy recorded in 2009 was probably the best in the Caribbean though there was considerable evidence that the private sector as a whole and, more particularly, some of its sub-sectors faced tough times last year. An assessment of both the specific performances of those sub-sectors as well as the performance of the private sector as a whole ought to have formed part of a “review” of the economy by the private sector.

One would have expected that a private sector review of the economy would take account of  the various statistics provided in the Finance Minister’s 2010 budget speech and those sourced to the Bureau of Statistics. It is not the presence of those statistics in the PSC’s “review” that is troubling but the absence of any real input into the document from the private sector itself.

Official statistics on their own cannot possible constitute a PSC review of the economy. What was lacking was what one might describe as an independent private sector assessment of either the official account of the performance of the Guyana economy as a whole or of the  private sector’s own performance.  Such an assessment ought to have dealt with the strengths and weaknesses of private sector performance in 2009, the domestic challenges that the private sector confronted during the year under review, an assessment of the role that public policy played in facilitating the growth and development of the private sector and an analysis of the impact of the global financial and economic crisis on private sector performance last year.

Specifically, some of the issues that perhaps ought to have found their way into the PSC’s review of the Guyana economy in 2009 – some of which have been raised in the media by the PSC – include the ill-concealed private sector dissatisfaction over what it appears to believe has been the failure up until now of the Caribbean Single Market to enhance Guyana’s  intra-regional exports; the prevailing private sector view that tax reforms are long overdue; lingering concerns over what the PSC has said continues to be excessive bureaucracy associated with facilitating overseas investment; the continued difficulties associated with working with the  Customs and Trade Administration; the continued delay in implementing the provisions of the Small Business Act and the impact of smuggling on the profitability of businesses in the manufacturing sector.

There are, too, the challenges being faced by the manufacturing sector on account of the challenges arising out of high electricity rates, additional costs associated with the establishment of independent electricity generating systems; difficulties associated with increasing the production of value-added commodities, enhancing packaging capabilities to meet international standards and expanding local regional and international markets manufactured products. It would have been useful to know what progress was made in these areas last year.

What would also have been welcome was an assessment of the state of the country’s tourism sector in the aftermath of the global and economic and financial crisis that wreaked havoc in the regional tourism sector and the prospects for its recovery and some idea as to how the private sector, particularly the agricultural, mining and manufacturing sectors propose to meet the challenges associated with climate change within the confines of the Low Carbon Development Strategy. What also may have been mentioned in the PSC’s 2009 “review” of the economy was at least an initial assessment of the hugely significant National Competitiveness Strategy, a mechanism which seeks among other things, to tackle some of the long-standing and critical stumbling blocks to private sector growth.

Missing too from the PSC’S “review” was any kind of private sector assessment of the global economy during a period of serious economic and financial crisis. We are aware, for example, that markets for locally produced goods and services, notably bauxite, were seriously affected as a result of reduced international markets. A private sector assessment of the extent to which our manufacturing sector was impacted on account of reduced international demand and the prospects for the recovery of the sector would have been important for several reasons, two of which come immediately to mind. First, such information would have provided some insight into the likely pace of recovery of the country’s export markets for manufactured products. Perhaps, equally importantly, it would have provided some indication as to whether or not there is likely to be further labour displacement in the manufacturing sector this year.

The role of the private sector as what is so frequently described as “a critical partner” in the  development of the Guyana economy underscores the importance of its own independent thinking on issues pertaining to the ongoing performance of the economy. Setting aside the relevance of regular and reliable private sector reviews to providing a more enlightened domestic understanding of the state of health of the economy, such reviews also help to inform investor understanding of the overall economic climate, influencing in the process, their investment decisions. It is not too late, for the PSC to address the omissions in its 2009 report.

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