`Encouraging’ 2018 economic performance marred by current political climate – Private Sector Commission

What the Private Sector Commission (PSC) says was an “encouraging” preceding year for the country’s economy has, it surmises, metamorphosed into a potentially challenging 2019 arising out of lingering economic challenges and moreso, the political circumstances arising out of the December 21 Confidence Vote in the National Assembly.

The PSC’s assessment, while alluding to “economic growth in sectors such as agriculture, forestry and fishing, manufacturing, construction and services,” which, it says, collectively contributed positively to the country’s “projected 3.4% growth rate,” veers sharply to what it perceives as the uncertainties of the new year arising chiefly out of the political developments of late last year.

“From all angles of our country, businesses have stated that the political climate is definitely a concern for 2019 as there is great uncertainty and in some areas hostility, as the talk about elections are prolonged,” the statement says.  “To exacerbate this situation, businesses in remote areas such as Berbice and Region Three – particularly Wales, are expressing deep concerns as spending power is expected to wane during 2019 as a result of the massive redundancies from the closure of sugar estates,” the PSC pronouncement adds.

Noting that the country’s economy, in terms of productive capacity had been “quite resilient” during 2018, the statement points to what it describes as “some internal and external dynamics,” including, “government policies and global commodity prices” which it said had “impeded growth in several areas.”

 According to the PSC, while heading into 2019, “it had been reported that the Christmas season was projected to be ‘above par’ but when compared with the performance of the previous year, that prognosis was ‘short-lived’ due to the No-Confidence Motion laid in the Parliament.”

 The PSC says, meanwhile, despite the country’s “positive economic performance” in 2018, it remained concerned about “job creation, investors’ confidence and the creation of an enabling business environment.” In its article, the country’s foremost Business Support Organization (BSO) stated that it had “fielded” representation on each thematic area of the Green State Development Strategy in an effort to contribute meaningfully to national development.

Alluding to its involvement in consultations in the national budget, the PSC noted that while it was “quite pleased that some of our suggestions materialised in Budget 2019, such as the lowering of the corporate tax rate, raising the tax threshold and announcement of plans for critical infrastructure projects like the Lethem-Linden Road, East Bank Road and modernisation of Port Georgetown,” it remained  “concerned about the level of proposed overall tax revenue on businesses and individuals and the tax rate for commercial businesses.”

What the PSC says that is also worrying is what it describes as “the impact of Budget 2019 upon the foreign reserves of the Central Bank,” an impact which it says, “does not appear to have taken cognizance of the need to cushion against external shocks to which the country and its currency are vulnerable.”

 Leaving aside what it says are “mainstream concerns”, the PSC’s article says sector heads, especially those conducting their business in the hinterland and interior regions, are still awaiting “the implementation of government projects to address the deplorable roadways and the high fuel prices” which it says have been crippling businesses “through massive increases in operating expenses.” Additionally, it numbers “access to lands for investment and the inefficiencies of government processes” as being among its concerns.

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