Mr. Christopher Ram’s letter titled `Stats Bureau should be doing far more to explain questionable GDP numbers’ (SN, May 8, 2014) highlights some critical questions about the determination of important national statistical markers and information. This is information not only local bodies, agencies, economists and others utilize in spawning assessments, calculations and projections but international agencies and foreign governments and entities depend on in order to assess and formulate lending rates, aid policies, loan terms, debt relief, concessions, trade agreements, immigration policies, investment strategies, etc. If the methodologies and processes underlying as vital a statistical construct as the GDP growth rate are flawed, suspect, non-credible and deficient in any way, it has a profound ripple effect and potential severe negative repercussions for the country and its citizenry. If the figure is higher or lower, the entire economy floats on a false ceiling or swims on a false floor and is disconnected with the real economy. If it is a case of poor data collection and analysis, the government simply does not have a clue on the direction of the economy and is forever playing a reactive game of catch-up.
It is easy to see how an important measure calculated from inadequate premises can lead to a shaky conclusion. Political machinations can and do sway statistics and data collection for national purposes.
A regime can stunt the sources of data, limit the use of data although full data is available, introduce controls, demand focus on data that tend to produce the most favourable outcomes, starve statistical agencies of resources impeding its ability to do its work, impose policy restrictions and reallocate resources to influence data. The absurdity of the claimed 0.9% inflation rate for 2014 is one such stark example of statistical implausibility that haunts the Bureau of Statistics. This number is so detached from reality that one is forced to consider it some form of political machination, particularly when inflation has over the past few years never been this low, the evidence on the street is staggeringly to the contrary and the data source for the inflation rate is geographically limited as Mr. Ram has confirmed. This 0.9% inflation rate is dangerous territory because when a government claims a real GDP growth rate, it is deducting inflation from the nominal GDP growth rate.
It is easy to see how a manipulated inflation rate can have a profound effect on the produced GDP growth rate. An inflation rate of 2.9% instead of 0.9% should generally have lowered the real projected GDP growth rate for 2014 from 5.2% to 3.2%. The citizens of this country beaten up by rising prices every day must ask themselves whether inflation is really 0.9% in 2014 to date or is the Chief Statistician and the government urinating on their legs and telling them it is raining? Isn’t low inflation in an import-heavy economy a sign of economic decline and not stellar projected 5.2% economic growth?
How do the statistical geniuses compiling the national accounts give us 0.9% inflation, lower projected prices for primary goods we produce, higher imports and still expect 5.2% growth?
It is now evident that the sources of data and methodologies and processes of collecting and analyzing them are cause for concern in Guyana. The people at the Statistics Bureau must explain the sources of their data and their methods in order to secure any future credibility from not only locals but international agencies and companies. The Bureau of Statistics should open its books.
The international agencies that depend on these statistics such as the IMF, UN and World Bank must be notified of these challenges to the government’s numbers.
The opposition should use its parliamentary power to launch an inquiry into the collection and analysis of vital government statistics. The legitimate questions raised on these issues must be answered and swiftly as it could have negative consequences for the nation’s investment climate, ability to obtain credit, trade deals and grants badly needed by certain floundering assets like Guysuco.
One must also openly wonder whether these same statistical issues that bedevil the GDP growth rate calculation will hound the Census report, which is now long overdue. In view of the PPP’s numerical decline at the last polls, its refusal to hold local government elections, the expected demographic alterations that will negatively impact the PPP’s support and the now public positions of the Chief Statistician parading on poor evidential and logical foundations in defence of a questionable figure, this delay is raising all manner of speculation. One must wonder whether the Census is similarly subject to these same burning questions and concerns.