Is the currency shortage the latest economic sanction?

Dear Editor,

The government is confronted with the reality of a new and different kind of protest; in effect, it is where multiple protests converge under a single umbrella.  This one is invisible at times, somewhat silent, but very extensive in impact.  This is economic protest in action.

Government made the first moves.  The clamp down on dirty money produced smouldering anger and loud wails of “slowdown.”  Well, if it was clean, then it could be seen.  That is, the money.  Next, there came the probing scrutiny of imports, and whether they measured up, and if all was disclosed, and then if what was disclosed was accurate.  There has been some public fallout; some additional resentment accrued.  And somewhere behind all of this, lurked the ominous spectres of those vowel-ending wardens SARU, SOCU, and the GRA.  In olden days a rising usually came.  But this is a new time; there are more nuanced ways to neutralize creeping pitbulls.

First, raise prices and blame the government; it is an easy street that is well populated and well-travelled.  Second, reduce importation to manufacture shortages; population agitation follows.  Third and here is the primary focus of this writing: sit on the cashbox and withhold currency from the marketplace; that will grab more than attention, it brings alarms, and a public relations nightmare.

In view of the continuous finger-pointing as to where the responsibility rests for this particular situation, I struggle to reconcile which of the contentious parties is on the side of angels here: the insistent government (central bank and Finance), or that just as dogged, particular segment of the private sector.  On its own behalf, government has been loud in its protestations and challenges.  While that should have been comforting, my concern is that on a few occasions strident official denials were followed excruciatingly long afterwards by quiet official admissions.

Instead of facing issues face-first and frankly, senior people in the government saw it fit and better to dissemble and abandon truth and accuracy.  I have always advocated disclosure early, and getting in front of the issue early.  No matter how painful, such a principled posture is less consequential, and usually more welcome, no matter how grudgingly; this is always better than ambiguity and cleverness.  Falling on one’s sword is another way to initiate damage control before matters get out of control.

In terms of the private sector (here and elsewhere), it is known to hoard and squeeze through fabricated circumstances to wrest advantages, sometimes economic, sometimes political.  Check out some cash-stacked businesses during the Obama administration, where the cash was allowed to gather cobwebs.

It could be argued that some of this has commenced here in Guyana, and that foreign currency is the most recent turn of the economic vice, and another tool in the economic arsenal brought to bear.  Quite frankly, I really do not have a handle on where the real truth is on this one, given the sometimes predilection for intrigue and subterfuges by the involved parties.

I do hope that the government’s position that there is no shortage of currency is buttressed by the reality of unimpeachable numbers; and that it is an artificial creation by the usual players: speculators, profiteers, and (unsaid) political pressure players, among other powerful presences.  If the government’s stance is out-of-the-money, then its credibility would suffer immensely, and its position would be unrecoverable.  In the next instance, if circumstances are, indeed, as the government insists, namely a creature of commercial conspirators, then clearly, it (the government) is coming under increasing siege conditions and from multiple fronts.  This would include sugar, prices, job loss, looming shortages, and at present a currency shortage.

Having said all of the aforementioned, I am willing to go out on a limb and say that the currency shortage is the latest economic sanction (a heavy duty and heavyweight protest) that, at the core, is the embodiment of electioneering through the economic engineering of yet another embargo.

Yours faithfully,

GHK Lall

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