International reserves have decreased

Dear Editor,

It was reported by one of the local media houses that the Minister of Finance Winston Jordan stated that members of the Guyana Bankers Association were optimistic about foreign exchange in the country. Additionally, the Minister said that over the past months there is quite a bit of foreign currency circulating in the system.  Is that so?

These are the facts:

  1. The Bank of Guyana published its August 2017 Statistical Bulletin on September 26, 2017, and in that official document, it reveals that the international reserves at the Central Bank were US$577.6 million compared to US$591.2 million in May 2017 (a decrease of US$13.6 million over 3 months). If you compare the situation to a year ago, it was US$613.8 million in August 2016 (a decrease of US$36.2 million over 12 months).
  2. Based on a model developed by Professor Erbe and using real figures from the Bank of Guyana 2017 Half Year Report, capital flight for the first 6 months of 2017 was determined to be US$26 million.

What should people know about these important developments that the Minister appears to want to whitewash? This is what people should know: the lower the confidence of the private sector in the government, the higher the rate of private capital flows out of the country and this directly translates to a depletion of the foreign reserves.  This will directly affect the entire nation in the near future when it is called upon to make payments on its foreign bills. This development could lead to Guyana becoming uncreditworthy if the situation was not addressed.

But what is directly important to everyone, is that the lower the amount of private capital being invested in the nation, the fewer job opportunities there will be in Guyana. But what this entire prognosis highlights is that if this trend continues, there will be less and less money in everyone’s pocket.  And all this hullabaloo from the politicians and quasi politicians of US$1 million per day revenue for Guyana from 2020 to fill the gap, can be defined as absolute malarkey.  I say this because based on a discussion I have had with a key person within the Exxon family, they are not expecting to produce more than 40,000 barrels per day in the pre-production testing period.  The pre-production testing of the systems has to be done to ensure that the chances of mechanical failures and leakages are adequately mitigated.  That process can take between 6-12 months. I dare not venture into a numbers this early but what I am absolutely certain about is that before 2022, Guyana will not be earning anywhere near US$1 million per day.

Why is the nation here at the dawn of 2018?

  1. This Granger regime is highly incompetent and they do not want to accept it. One of the best pieces of wisdom I heard on the 2011 campaign was from CN Sharma when he said, “Anyone can be president but they have to be willing to surround themselves with the best talent”. He was perfectly in order but he failed to tell that to his colleagues in the coalition. This Granger regime has an inherent fear of talent and thus they continue to struggle at policy development, and I foresee no dramatic changes between now and 2020.
  2. President Granger has refused to lead on the big issues since he arrived in town. He prefers to be the pageantry president who salutes marching bands and makes empty speeches that are not backed up by any action. Any keen observer of the state of play in the current regime is that it has literally outsourced the presidency to Minister Harmon, who has shown himself to be much more unaware of how to handle the big issues in the room. But what is keenly interesting is that people like Carl Greenidge who have the experience and training to help, have gone dead silent on the issues outside of their portfolio. If an insider like Minister Greenidge cannot be tapped for his core skill set, then the Guyanese talent base will not be tapped.

So we must prepare our minds for the truth, this Granger presidency is not the solution to Guyana’s economic challenges; is actually part of the problem.  If Mr Granger really knew what he wanted to do, then he would just go and do it.  But as many who voted for the coalition are waking up to finally, May 2015 was the biggest con-job in the entire political history of the nation. People voted for change and for a chance of a more functional government.  The reality is that this presidency has proven to be almost totally dysfunctional on all fronts, even in their claimed forte – crime and domestic security for the people.

Yours faithfully,

Sase Singh

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