The cost of living is not going to fall

Dear Editor,

People are complaining bitterly about the high cost of living in Guyana. It is the most important issue to most voters. A Donald Ramotar government will likely increase cost of living. If a trained economist like President Jagdeo who worked at the highest level of state planning before he became Finance Minister struggled immensely to put this economy on the right footing and failed to do so, a President Ramotar would be an utter and unmitigated disaster. Mr Ramotar’s inexperience and lack of vision is not what the doctor ordered at this juncture of our economic reality in Guyana. So how will Mr Ramotar drive up cost of living? Well, the cost of living has climbed higher and higher under the PPP, and being a non-visionary and inexperienced Mr Ramotar will simply try to continue what he inherited. The problem is that he does not have Bharrat Jagdeo’s intimate knowledge of the economy which he gained from his years working as an economist from the time of the Hoyte regime. Further, Mr Ramotar cannot even remotely replicate Mr Jagdeo’s success in securing foreign aid and debt write-offs. He lacks charisma. Expect serious setbacks in our ability to secure financing for major projects. This will dampen development projects under a Ramotar government.

The PPP’s 19-year spending spree which throws money around recklessly creating white elephant sugar factories, float-away wharves, falling-down stellings and flood-prone roads is a major driver of the higher cost of living we experience. With corruption, incompetence and shoddy work, money keeps disappearing to fix messes over and over again. When money is being sprayed around this wildly by the biggest spender of them all (government), it drives prices up. When the new rich and the other lucky few beneficiaries spend that easy money with abandon and are willing to pay more than the poor and the powerless for an item, it drives prices and the cost of living up for the ordinary struggling Guyanese. This is the price of inequality. It is how inequality can drive up costs and prices for the poor in a small connected economy.

This cost of living chokehold Guyanese are are squealing about started with the PPP’s complete inability despite 19 years of promises to deliver lots of well-paying jobs. So here’s the deal. We don’t get paid enough. We don’t have enough jobs. When we do earn an income the PPP snatches 33.3% of it away and 16% in VAT. On top of that, we have to pay bribes and make corruption payments in this corrupt safe haven the PPP has created. Your take home pay is not enough. Those high-paying jobs aren’t coming. Definitely not under Donald Ramotar. We are still doing exactly the same thing our foreparents did: plant rice, sugar and vegetables; chase fish and dig for gold, bauxite and diamonds to send to our former colonial and plantocracy masters who make chocolates, cereals food bars, etc, and put them into fancy-looking tins and packaging to resell to a few ‘traders’ who import them into Guyana and then sell to us at a high markup to make stunning profits. We like foreign things. So our little money ends up chasing expensive foreign items. After shipping costs and fat profits for the importers, the prices are too hot for struggling Guyanese. So we bawl higher cost of living but vote for it in the polls.

Local industries have similarly struggled. Every aspect of our production except rice has fallen or faced higher inefficiency and lack of productivity which have driven up costs and which have been passed onto consumers, driving up prices. The only industries that have shown stunning growth under the PPP are crime and in particular, cocaine. Those have exported a lot of Guyanese lives six feet under.

This cost of living nightmare isn’t going away. It is going to get bigger and heavier under Mr Ramotar. Yes, the PPP likes to remind people that unlike the PNC days we have everything. They don’t remind people that most cannot afford this everything. And that it is getting worse. If you can’t afford it you don’t have it. Or that most have to save and scrimp and scrounge to afford these things. This housing bubble we are sitting on is another headache. Bulldozing some lands and cutting some lots into it without any running water, electricity, playfields and telephone service and with a single two-lane dam serving as its main transportation lifeline is not a housing success. It is creating a debt bubble of gigantic proportions. With hefty mortgages, 16% VAT, 33.3% income taxes, bribe payments, corruption charges and higher prices and runaway cost of living, welcome to life in the land of the PPP. You know what the real tragedy is? It is that Guyanese abroad earning kings’ fortunes are paying less for the highest quality sugar, rice and fish that people here literally broke their backs producing, while those at home living and dying in the trenches of eternal poverty are given the leftover scraps. The PPP has sold Guyanese something they like to call a dream. People are waking up to the nightmare it really is.

Yours faithfully,
M Maxwell

Around the Web