This past October, the Inter-American Development Bank (IDB), one of the country’s most important creditors, launched its 2017-2021 Country Strategy for Guyana, where it pointed to a “lack of strategic planning and vision at the highest level[s]” of government. Less than two weeks after the report was publicized, a speech by Minister of Business, Dominic Gaskin to the opening of the agro-business expo, organized by the Guyana Manufacturing and Services Association (GMSA), offered up eloquent testimony to the IDB’s claim.
As the online news outlet, Demerara Waves, reported on October 28 of this year, Mr. Gaskin ‘expressed concern that in Guyana political fall-out is used as means of attacking the country’s economy, unlike other nations where business activity continues despite deep political divisions and “the most poisonous of political climates”‘. The article adds that ‘he called on the private sector [to] not take political sides or become too distracted by the estimated 60-year-old political bickering even though it is undesirable’, and quotes the Minister of Business as saying, “We cannot let it dominate us to the extent that we allow it to infect our private sector and to affect business confidence so our private sector needs to be apolitical and needs to enjoy the support of the government of the day and our government is here to give support to the private sector.”
To his credit, Mr. Gaskin’s speech also touched on the need to address issues of trade, technology, marketing, and phytosanitary standards as they relate to agriculture, even as he proffered little in the way of concrete policy proposals to do so. Consequently, it was the tenor of his take on the private sector’s aired sentiments on the political economy that rang loudest.
While Mr. Gaskin did not cite any specific country as an example to buttress his implied hypothesis that political instability is not necessarily a deterrent to investment, attempting to reckon with the notion is something of a fool’s errand. Depending on where you stand, one can point to examples of autocracies that have been economically successful (United Arab Emirates, China); dictatorships that have gone bankrupt (Venezuela, Zimbabwe); democracies that have thrived (Germany, Norway); and democracies that have stumbled (Brazil, Argentina, and France). The impact of political (in)stability on any one country’s economy comes with important caveats specific to the idiosyncrasies of that nation, and cannot, therefore, be easily generalized.
However, trepidation about political tension in Guyana is not unfounded, and the dimensions of the private sector’s anxiety are largely twofold. The first pertains to what the late psychologist, Abraham H. Maslow, identified as one of the most primordial human needs: safety. Quite often in its post-independence chapter, political competition in Guyana has manifested itself in violence and upheaval.
And then there are the public policy implications of the current state of political affairs. Government spending in Guyana has, on average, accounted for approximately 30% of our Gross Domes-tic Product (GDP) over the last decade. A not insignificant portion of that spending makes its way to the private sector as compensation for government’s procuring its provision of goods and services.
Moreover, the government’s decisions on issues such as policing, taxes, regulations, healthcare, education, and infrastructure, have repercussions on the productivity and profitability of businesses. In a democracy, the government is accountable to the electorate for the outcomes of its policy decisions. The spectre of free and fair elections is both the carrot and the stick the public wields against the political class to ensure policy is made in the best interest of everyone; without it, the government could do whatever it wants without consequence. Therefore, it is surprising that Mr. Gaskin is so taken aback by the private sector’s reaction to President David Granger’s unilateral installation of Justice Winston Patterson as Chairman of the Guyana Elections Commission (GECOM), which handed his party, the People’s National Congress (PNC), veto-proof power on the country’s electoral board, and stoked fears of an attempt to subvert the democratic process.
Against that backdrop, one wonders why, instead of assuaging investors’ concerns, Mr. Gaskin chose to invalidate them. Why did Mr. Gaskin not give an address centred on the work the government is doing to enhance internet connectivity, boost highway and air travel infrastructure, invest in workforce development and training, and promote agricultural research? Why did he not point out how those initiatives will improve farmers’ access to new inputs and markets, and provide the technical skills and new agricultural technologies to improve farm yields, productivity, and profits?
As the Minister of Business in an economy that perennially dwells in the bottom quarter of countries on the World Bank’s Ease of Doing Business Index, why did he not speak to what his government is doing to improve the business climate, which would encourage higher order agro-processing activities? Where was that narrative?
But instead of giving an address wearing the hat of the businessman he is, Mr. Gaskin threw a tantrum in his capacity as the member of a governing coalition perpetually playing defence, foregoing the opportunity to make a sales pitch to a captive audience of fellow investors. Given that Mr. Gaskin’s sentiments were echoed by the Prime Minister, Mr. Moses Nagamootoo, who also spoke at the event, it would appear that the government’s prospectus for the Guyana economy can be boiled down to four words: “Shut Up and Invest.”
Saieed I. Khalil