Dear Editor,
The economic tragedies that are currently unfolding in our two largest neighbours, Brazil and Venezuela are all too reminiscent of the ʼ70s and ʼ80s era in Guyana. Socialist governments in both of our neighbouring countries have catered shamelessly to their constituents at the expense of the productive sectors of their economies. Rather than working hard to encourage growth in their economies, they took the easy route by spending recklessly on entitlement programmes paid for by the high price of oil. With falling oil prices, Venezuela in particular is now left with an enlarged entitlement burden and a shrinking economic pie.
Venezuela is at the end stage of this entitlement trap with food lines, endemic shortages of drugs and a despondent and desperate population. Brazil is in an economic freefall. Its economy shrank 3.8% last year and is expected to shrink 3.5% this year. Unemployment is rising and a large portion of its budget is earmarked for welfare and entitlement expenditures and with a further sum for interest payments on debts, there is little left over for development.
Guyana has been in that dark corner before. We should have learned our lesson. We should put a premium on and incentivize economic activities that generate foreign exchange, for in the end, these pay the bills. And we should never rob Peter to pay Paul, for this is the surest and shortest route back to that dark corner.
Yours faithfully,
Mohabir Ramjeesingh
