10% pay hike very good
– GCCI says economic climate does not allow for bigger increase
PUBLIC servants should be appreciative of the increases being offered by the Government, President of the Georgetown Chamber of Commerce and Industry (GCCI) Vishnu Doerga said on Tuesday.In August, the Government said it was prepared to pay a 10 per cent increase to persons earning $99,000 or less; six per cent to persons who earn between $100,000 and $299,000; five per cent to public servants earning between $300,000 and $799,000; two per cent for those earning between $800,000 and $999,000; and one per cent for those earning above $1M.
However, the Guyana Public Service Union (GPSU) has rejected what Government said was its “final offer,” and just last week expressed a desire to enter into conciliation. Weighing in on the issue during a press conference at GCCI’s Waterloo Street Head office, Doerga said such an increase would not have been possible if the country was being run as a private entity.
“If we were to look at Guyana as a private entity, there would have been no way there could have been a salary increase, given that we are just 2% ahead of our Gross Domestic Product (GDP) growth,” Doerga explained.
In August when the mid-year economic report was compiled and presented by the Finance Ministry, the country had only recorded a 2 per cent growth during the first six months of the year, primarily due to the Extractive Sector. Though the economy is in recovery mode, the GCCI President, from the private sector perspective, said it would have been extremely difficult to offer such an increase.
“I am happy I am not the Minister of Finance because there would not have been any (increase)…because the 2% came from gold which is not circulating within the economy,” he posited.
Doerga questioned how is it possible to pay 10% on wages and salaries for public servants when there is just a 2% growth in the economy. Cognizant of the state of the economy, he is of the opinion that public servants should be appreciative of the offer being placed on the table by the Government.
“From a purely private sector perspective, they should be very appreciative of the offer. I know they wouldn’t like that but from a private sector perspective there is no way that the private sector would have been able to offer that,” he said.
Nevertheless, amid major objections from the Guyana Public Service Union (GPSU), the increases on wages and salaries intended to be paid out by Government next month will mean well for the economy, Doerga contended. He said unlike gold where there is little or no multiplier effective, when the increases are paid, the monies will be circulated through the various sectors.
The multiplier effect refers to the increase in final income arising from any new injection of spending. However, the size of the multiplier depends upon the household’s marginal decisions to spend or to save. Alluding to the state of the economy, the GCCI President said Government is moving along the right path in its quest to further diversify the economy but said there is need for more “urgency.”
In May, the International Monetary Fund (IMF) had urged Guyana to expand its economic diversification programme. However, this has long been the vision of President David Granger, who had told Parliament back in January that 2016 presents a new opportunity for Guyana to “hasten economic development” by diversifying the traditional sectors and getting into more value-added enterprises.
“It is time for a fresh start–a new beginning. It is time to redouble our efforts to eradicate poverty. Our government is committed to promoting sustained economic growth with enhanced distributive justice so that inequalities are reduced and opportunities are increased,” the President said, in an address to the Eleventh Parliament.
