RESTORING HOPE TO THE HOPELESS

Guyana’s economy is slowing down. Based on the Poverty Index Indicator range from zero to ten where zero is the lowest and ten is the highest, Guyana, a year ago was rated at seven. Today, it is ranked eight which means that poverty is increasing in the country.
The Living Standards Measurement in 2014 revealed that between 10 and 15 percent of the population live on US$1.50 per person a day and 20 percent live on US$2 cent per person a day in Guyana.
The good news is that Guyana has the capacity, knowledge, resources and leadership to eradicate poverty, but realistically, poverty has increased significantly in the past few years. To rescue those from poverty, a lot of things will have to be done, including the ability to manage the country’s resources and finances effectively, and not squander them or use them to enrich oneself as some in the previous government had done.
The government must be credited for restoring hope to a hopeless population, for reducing corruption, for shrinking the illegal narcotics trade, and for providing good governance; but it is not enough to reduce poverty. The road out of poverty is rarely a smooth, one-way street, not even in the rich countries.
It is a long, hard and bumpy road, which the government should navigate. The government has to make the reduction of poverty its highest priority and collaborate with all the stakeholders, including the private sector and the unions.
The economy has to grow at an annual rate of six percent or more for three successive years and create 2,000 jobs every month also for the next three years.  The government must be prepared to make huge investments in education, employment and self-employment opportunities, as well as associated infrastructure that would allow the people to improve their living standards while building their resilience to cope with set-backs or disasters.
Such investment could lead to the reduction of poverty, grow the economy, expand individual opportunity, and build confidence among the people. Above all, it could reduce the galloping poverty gap between the rich and the poor as well as gender inequalities.
However, since taking office six months ago, there have been a few bright spots but some dull ones as well, in governance. One of those bright spots is in foreign policy in which the Minister of Foreign Affairs has performed superbly in quelling the fears of the nation in the face of threats from Venezuela. He has succeeded in getting the United Nations to agree to a judicial settlement. On the dull side, crime, especially murders and armed robberies have increased significantly within the past six months. And only time will tell if “Operation Dragnet” will end the free reign of the criminals or make them more brazen.
However, a long-term crime fighting strategy is urgently needed to end this scourge on the nation.
The country also faces a problem of diminishing returns in all sectors of production and the poor are always hit the hardest. The sugar industry is virtually bankrupt and the rice, bauxite and gold sectors face a dismal future. The fact that the cost of producing a pound of sugar is 300 percent higher than the price paid for it on the world market shows that the industry is not viable.
The same is true for rice and gold as the prices for these commodities continue to fall on the world market. This is the reality that the new government must grapple with. The survival of both the sugar and rice industries depends on subsidizes from the government. Also, remittances which account for 20 percent of Guyana’s GDP are on the decline, while the country’s imports continue to exceed its exports.
These along with budget deficits, the national debt which is 65 percent of the country’s GDP and excessive borrowing by the government, suggest that the country is spending more than it is earning.