The true Guyana economy remains broken

Dear Editor,

After reading your newspaper’s lead story yesterday, ‘Jagdeo ‘appreciation’ draws cheers and jeers,’ and then the state-owned Guyana Chronicle’s, ‘President urges national pride, healing of wounds of the past,’ I have to say thanks for a balanced report. Of course I had a laugh at his call for healing the wounds of the past, because he has wounded many people with his remarks and actions, and his departure could only accelerate the healing process.

Anyway, about a year or so ago, there was great debate about whether the President will ever actually leave office, but ever since plans were announced for an appreciation day to thank the President for his 12 years at the helm of the government, much has been said for and against his presidency. With the appreciation day behind us, it finally appears he will demit office after this year’s pending elections.

Judging from the various letters and opinion pieces, the President is credited with restoring the Guyana economy, starting with strict adherence to creditors’ guidelines for writing off Guyana’s US$2B foreign debt the PPP inherited from the PNC regime in 1992, to investing in Guyana’s infrastructure and to overseeing mixed results on the economic performance front.
But while some are loud in their praise of the President’s handling of the economy and rebuilding its infrastructure, what good are these if scheduled and unscheduled blackouts are still common after almost 40 years? Which other Caribbean capital has had this decades long curse?

For an economy on which 750,000 depend and the potential for greater results lies untapped, the trumpeters also mystifyingly refuse to publicly acknowledge that the informal economy remains about half the formal economy.

I have long made the informal economy factor a point of contention to both rebuke and rebut those who keep singing the President’s praises on the economy, because these folks have been hoodwinked and are hoodwinking the gullible and naïve into believing the President is some sort of economic miracle worker. I repeat: If we eliminate monies from foreign loans and grants, foreign remittances and money laundered from narco-trafficking and other illicit underground activities, the Guyana economy will be standing on one leg.

Most of the fresh foreign loans and grants went into infrastructural projects, which the government appears to be receiving credit for executing, yet those projects were precisely what the foreign loans and grants were supposed to be spent on, and one reason why the PPP sought to govern. Regrettably, many of those projects lacked value for money and raised questions about kick-backs or rip-offs.

Foreign remittances continue to be a huge win for the Guyana economy, and I am not talking about what the US reports annually, because America is not the only source of foreign remittances. Guyanese actually take varying quantities of undeclared foreign exchange when travelling from various nations to Guyana every year.

Money-laundering is undoubtedly the biggest game player in the local currency market. Because it is illegal, no one knows the exact amount of laundered money that flows or changes hands on a daily basis, but with the emergence of massive consumer-oriented businesses, well-furnished huge mansions, imported luxury cars, affluent social settings and banks sitting on billions of dollars with hardly any borrowers, it is one
reason why international institutions conclude that the informal economy is between 40% and 60% of the formal economy. And the government is not keen on correcting this disturbing claim.

When we take those three financial sources and we add government’s onerous Value Added Tax (VAT), in a consumer-based economy that thrives on imported goods, we can see a Guyana economy awash in a sea of money, and that’s how the picture gets presented of a stable economy under the astute leadership of the President. That is the tricky part of Guyana’s economics I call ‘trickonomics,’ because it tricks people into thinking economy stability is based on sound economic practices. Not in Guyana’s case!

Now, even if we want to credit the President with a stable economy, how do we reconcile this claim with the fact that in 2011 Guyana can’t provide enough jobs for school leavers (secondary or tertiary) or at least good paying jobs that would allow those employed to remain and embark on a fruitful life in Guyana?

Comparably speaking, Britain is 219,000 square kilometres and has a population of 59.6 million. Guyana is 216,000 square kilometres and has a population of 750,000. The huge population disparity here is what has me wondering what exactly does Guyana need, given its untapped potential to do better economically, to make a marked difference. And if we keep losing our best brains to other nations, how can we expect to compete or match up with more developed economies?

I wish to submit to ‘all the President’s horses and all President’s men,’ that the true Guyana economy remains broken, and no matter how hard they try to put together the broken pieces with ‘their facts and figures’ and smooth over the surface with propaganda, they will continue to fool themselves as they fail to impact the people of Guyana.

Editor, one does not have to be a college educated economist to know when an economy is revving up for take-off, for we all know that whenever Guyanese stop running away, or when Guyanese start returning home in droves and foreigners start showing up in droves on our shores (the way we have been doing for decades), that’s when the Guyana economy is actually stable and ready for take-off.

So, if I am ever going to join others in showing my appreciation to the President, it will not be for his (mis)handling of the economy – he sure has failed on other fronts like crime-fighting, administration of justice, control of corruption in and out of government, etc – but it will be for finally recognizing that he will be overstaying his time in office if he decides to stay on beyond 2011.

Meanwhile, voters have to wise up to the reality that, if elected, Mr Donald Ramotar will govern based on his party’s known group-think mentality that produced this President and the fake economic performance that benefits the political cabal and not the poor citizenry.  It’s time Guyanese begin to appreciate themselves by voting for a break from the PPP-PNC stranglehold. Give real change a chance.

Yours faithfully,
Emile Mervin

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