Ideas are essential but so is implementation

Dear Editor,

President Granger’s three statements on private enterprise are consistent, namely, that “a government job is seductive”, the Chronicle newspaper should revert to private ownership and that private entrepreneurship, not government jobs, is the answer. Two of these are consequential, historically and for the future, particularly for Guyanese of African descent. Privatisation of the state media should happen sooner rather than later, permanently ending state competition with private media houses, and its political exploitation. Fifty years of trying to govern ourselves and nearly thirty years after privatisation began Guyana has achieved limited private sector development, hence high unemployment.

Privatisation opened the door to a new future, away from the failures of socialist doctrines and a state commanded economy. Hopefully, by this time, there is a fleshed-out entrepreneurship strategy and policy, a modernised regulatory framework and a financing plan that the Ministry of Business has developed for cabinet to study, and from which the President articulated his statements. Furthermore, there are several moving parts to consider.

First the political and governmental context: Given the manifesto and past declarations of intent by Hoyte’s PNC administration, the PPP and now APNU+AFC there appears to be a fragile implied political consensus about future direction. However, none has done enough, there is need for a national consensus while unresolved issues fester. One issue involves the PPP’s ‘Communist Manifesto’, its practice of crony capitalism and nurturing an oligarchy and by extension its doctrines on free enterprise.

The other involves political and governmental cultures that have contributed, in no small measure, to frustrating Guyana’s economic development for over half a century. Note that Guyana’s unfortunate romance with communist/socialist authoritarianism made government much worse and bad for business. The element of the Tiwari- Guyana Revenue Authority-Baishanlin-China trip affair, for example, that really caused the uproar is that it opened a window to the past that the people assumed had been closed as a result of the election of APNU+AFC. The public’s perception, based on what was inherited from the PPP, is one of a lingering governmental culture of political interference, lack of transparency and accountability, disregard for the rule of law and corruption in government. Recent experience suggests that if this culture persists it will encourage behaviour that will result in rampant malfeasance and predatory activity in the private sector, and nothing could be worse for Guyana going forward.  For too long legitimate governmental action was conflated with other behaviours and actions that are frankly unconstitutional/ unlawful and arbitrary, and are based on doing favours for who knows who. This culture should be buried and replaced with more a more sophisticated, transparent and effective one. The main reason is concern about how power was used in Guyana. Free markets needs freedom of choice, free flow of information, freedom of access to information, and free media; unambiguous private property rights, open and transparent government and society and primacy of the rule of law. These are philosophical and ideological issues that require national consensus, since a healthy private enterprise economy cannot succeed and be sustained in an uncertain environment.

Second, the PNC, PPP and APNU+AFC administrations have made declarations concerning a diversified economy. Vibrant entrepreneurial activity and private enterprise are powerful weapons to help realise a diversified economy in the medium to long term. Guyana is ripe with subsistence/necessity type entrepreneurship, visible everywhere in peasant farming, construction craftsmanship, street vending and retailing. This is not enough.

Although studies have generally been inconclusive, opportunity/ innovation type entrepreneurship is believed to produce better national development outcomes as opposed to rent seeking and necessity types.

Third, there are strong headwinds to consider. Domestic demand may not grow fast enough to sustain start-up and expanding enterprises in a poverty stricken economy with widespread unemployment and low incomes. Export based diversification is possible; however, markets are difficult to access and the standards to be achieved are quite steep. Furthermore, the present global economic condition of low growth will constrain private sector activity. Another problem is the debilitating condition of many basic requirements such as infrastructure (unreliable electricity, water) and efficiency supporting resources, and an unstable social climate with high levels of crime that are generally bad for business. The constant outward migration of skills and falling school performances in mathematics and science are unhelpful to manufacturing. People make things in modern economies because there is usually a solid national foundation in mathematics and science, evident in the success of Asian countries such as Singapore.

Overall, the elements of a new world in Guyana that is different from the past may be emerging. However, there are moving parts to be fitted together and an implementable strategy to be set in motion. Ideas are essential but so is implementation, through a plan that prepares the country for a rebound of the global economy, actually delivering jobs.

 

Yours faithfully,

Ivor Carryl

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