Dear Editor,

The halfway point in the Ramotar administration term in office has now passed. Unfortunately we cannot find any public policy or strategy that has permanently and positively transformed the well-being of the people who make up the 40 per cent at the bottom of the economic ladder.

During the 2011 campaign, the PPP leaders outlined their philosophy and guiding principles in their manifesto as “Freedom, Democracy and Rights”; “Upliftment of All…”; “Equal Opportunity and National Unity”; and “Integrity and Accountability.” Words and more words but clearly without substance.

It was John Adams, the second President of the United States who said, “Abuse of words has been the great instrument of sophistry, chicanery and division of society.”   These empty words from President Ramotar’s regime continue to divide the society since they have delivered very few of their promises so far.

Is that 40 per cent at the bottom more free, do they have more rights, feel more uplifted politically, socially and economically than two years ago? Do they feel that they have an equal opportunity to enjoy the patrimony of the nation? Do they feel that they live in a more united country today as compared to 2011? Certainly not!

Politicians with good rational judgment would seek balance and progress; lack of it eventually finds imbalance and economic and social degradation.   This economic imbalance is driven by the irrationality in how we arrive at the GDP figures in Guyana.

There is an accumulation of evidence that the GDP figures have been fudged since before 2011 and 2013 was no different. But they cannot fudge the GDP figures forever. The majority in that 40 per cent at the bottom of the economic ladder will confirm that their lives have not improved since 2011. In other words, the trickle down effect they promised in the 2011 PPP manifesto did not happen. In fact, it trickled up to their rich relatives and friends, thus making them richer and the poor poorer.

In support of our conclusion, one only has to look at the macroeconomic numbers for 2013 and one can easily find indisputable evidence that the 5 per cent growth rate was an act of economic illusion. In 2013, the overall balance of payments recorded a deficit (shortfall) of US$119.5 million compared to a surplus of US$32.9 million in 2012. The deterioration was primarily due to an expanded current account shortfall and a lower capital account surplus for 2013.

Today, the current account deficit (shortfall) has widened by 16 per cent or US$58.6 million, worsening to US$425.3 million at the end of 2013. This bloated deficit was mainly on account of lower capital inflow of current transfers and higher service payments. Bottom line, lower capital inflows and higher outflows of cash from the economy have deeply influenced the overall deficit.

A real concern to us is that the regime is not telling the people the truth. The country’s exports have declined by some 3 per cent to US$1,375.9 million. Except for rice, exports from all the other main sectors (gold, sugar, bauxite, timber) have contracted over the past two years.

During this period, the deficit on the services account expanded by 50 per cent or US$102.5 million to reach US$307.1 million on account of higher payments for non-factor services (outflow of cash from the Guyanese economy). Remittances decreased by 30 per cent or US$141.1 million to US$328.2 million when compared to 2012.

The capital account surplus also decreased by 25 per cent to US$314.8 million in 2013 on account of lower foreign direct investment and local investment by the private sector. Foreign direct investment actually declined by US$80 million or 27 per cent in 2013 confirming the economic meltdown in Guyana. Inflows from bilateral and multilateral agencies have decreased by 27 per cent to US$221.4 million.

If one should read this scorecard, one will have to really search between the weeds for this 5 per cent GDP growth. The Minister of Finance should clearly know better. It is either the technicians are fudging the figures for political purposes or they are grossly incompetent at their basic arithmetic.

In light of all this, we challenge the Minister to illustrate to the nation how he arrived at the 5 per cent GDP growth rate. But what is worse is that this act of economic illusion is that the majority political opposition does not curtail the squandermania adequately. We found evidence of billions voted on by the majority opposition that will only serve to feed the greed machine in Freedom House. Why are they constantly capitulating to the Minister of Finance?

The principal role of the opposition is to interrogate every action of the government and hold them accountable to the public. Hopefully in the process of safeguarding the people’s assets, the people will be convinced that they can better run the country. Can we say the majority opposition has taken on its responsibility to the people well? Certainly not!

We recommend not a cent more for the Ramotar administration until and unless they put greater internal controls in place to save the nation from the Freedom House greed machine. We can start by renewing our long overdue local government system with local government elections.

We urge the opposition to take the fight to President Ramotar’s administration. That is the only solution so that all the people can secure justice and equality all the time.

Yours faithfully,
Sase Singh
Vincent Nauth
Derrick Arjune
Asha Balbachan
Devita Khan
Aubrey Reteymer
Chandra Deollal
Reginald Watkins
Rohit Misir
Terrence Simon
Donna Mathoo
Noel Moses
Vicki Rampersaud
Guilianna Jacobs
Asquith Rose
Ramesh Sookram
Harish Singh

Dear Editor,

It was refreshing to see the letter by Chief Statistician Mr. Lennox Benjamin `Challenge of country’s growth estimate was undertaken without single reference to the economy’s sectoral sources of expansion’ (Stabroek News, May 4, 2014). Mr. Benjamin was responding to a letter in the Stabroek News of April 26, 2014 “challeng[ing] the Minister to illustrate to the nation how he arrived at the 5 per cent GDP growth rate reported in his 2014 Budget Speech”. In support of their conclusion “that the 5 per cent growth rate was an act of economic illusion”, the writers of the first letter drew attention to an overall balance of payments deficit of US$119.5 million compared to a surplus of US$32.9 million in 2012.

In his response Mr. Benjamin states that if the writers have doubts on the figures, they must say what the numbers should be. Mr. Benjamin is confusing the duty of the Stats Bureau to produce accurate and timely information with the right of the public to question the information and to ask for explanations. For example, the Stats Bureau reported an inflation rate of 0.9% in 2013, which as Mr. Benjamin knows is not a national inflation rate but an Urban Consumer Price Index for Georgetown only. The so-called inflation rate of 0.9% for 2013 not only defies all logic but is inconsistent with and unsupported by the several different specific and complementary measures and indicators to which Mr. Benjamin himself refers.

Is Mr. Benjamin suggesting that no one must question that 0.9% figure on the grounds that they do not have an actual, scientifically determined number of the real rate of inflation? And would Mr. Benjamin care to explain the 3.5% inflation projected by the IMF Team in December 2013 after consultation with the Stats Bureau and hazard a guess for the decline to 0.9% within days. And would he tell the public whether the Stats Bureau compiles a national inflation index, and if so, what the 2013 index is.

But let us return to the GDP and its 5.2% growth in 2013 applying some of the complementary indicators recommended by Mr. Benjamin to the data provided by the Stats Bureau. Appendix H2 to Volume 1 of the 2014 Estimates is a table of GDP at Current Basic Prices (Rebased). Below is an extract of the sectoral growth reported in that Table, expressed in millions of Guyana Dollars.

In defending the National Accounts produced by the Stats Bureau, Mr. Benjamin assures us that its work and the input data received from sectors in the calculation of the GDP are subject to review and recheck by and submission to several international Agencies. He did not name a single such Agency, or distinguish between those which check and those to which the calculation is sent. Nor did he concede that the quality of the country’s statistics has from time to time been questioned by respected individuals and agencies such as Professor Clive Thomas and the Economist Intelligence Unit.

With respect to the 2013 GDP numbers, he proceeds to give three examples of data on sugar, rice, and mining and quarrying. Data for these sectors are fairly but not completely straight forward to measure. Any errors are likely to understate rather than overstate GDP because of suspected transfer pricing in bauxite, the understatement of gold production and local rice sales. In his haste to debunk the writers, Mr. Benjamin fell into the elementary error of repeating rhetorically that if any one of the sectors or subsectors identified by him was wrong then the total was wrong, completely ignoring the possibility of compensating errors.

The real problem which many persons have with GDP figures is with the Services sector which accounted for 58% of GDP in 2012, increasing to 60% in 2013, a remarkable change by itself. Addressing such concerns requires measured, intelligible explanations, not a polemical and emotional reaction. Services include some really hard-to-measure subsectors such as Transportation and Storage, Education, Construction, Health, and Real Estate Activities.

Specifically, Mr. Benjamin cited the Construction sector in his defence without any apparent awareness that the reported 22.6% growth in the subsector in 2013 includes a substantial correction of an error in the 2012 figures. For that year, the Stats Bureau reported negative growth of 11% even though the imports of cement and steel had increased by more than 25% and local sand output was up 76.5%. Troublingly, the mid-year 2013 year-on-year growth was reported as 6.6%!

Let us take another example: Real Estate Activities at the half-year was 1.2% year-on-year but this grew dramatically to achieve a 5.6% for the full year. Expressed another way, Real Estate Activities are reported to have grown from $5,123 million to $5,482 million, or by 7.01%. Mr. Benjamin is aware that one consequence of real estate activities is a liability to Capital Gains Tax.

What we find however is that Capital Gains Tax collected in 2013 was $265.8 million, down from $408.2 million in 2012, a decline of 34.9%. This is low, even allowing for statutory exemptions and timing differences.

As an aside, the rate of Capital Gains Tax on taxable gains on capital transactions (which include Real Estate) is 20%, compared with the effective rate reported of less than 5%.

In addition to these identified challenges, the Stats Bureau has an item described as Other Service Activities which each year keeps rolling along like the song so that between 2010 and 2013 this unexplained subsector grew by 40%!

I join this exchange because of the importance of national statistics to an enlightened debate and informed action. So rather than deriding those who question the National Income Statistics as having no clue about what goes into the numbers, the Stats Bureau should be doing far more to explain those numbers and to educate the public. It would be instructive for Mr. Benjamin as the Bureau’s Chief Executive Officer, Vice Chairman and Chief Statistician to let the public know about the adequacy of its staff, the level of fieldwork done by the Bureau, the system in place for evaluating reports received and plans for broadening the statistics now produced. On the important matter of the 2012 Census it would be helpful if Mr. Benjamin could tell us when the report will be published and whether the CARICOM Secretariat is in any way responsible for the delay.

In again thanking Mr. Benjamin for responding to concerns about national statistics, I invite him to tell us also about the governance issues in his institution including compliance with the Bureau of Statistics Act.

This Act provides for the appointment and gazetting of a Bureau (Board) comprising not less than five nor more than nine persons and the tabling in the National Assembly of the annual report of the Bureau and the audited financial statements.

Yours faithfully,
Christopher Ram