March 13, 2017 Source
Oftentimes the homemaker (home economist) through purchasing and bargaining ability will send indicators as to the state of the economy. Minister of Finance Winston Jordan acknowledged the economy is contracting. Every economy has its boom and bust periods, and planners have the opportunity to not only put systems in place to cushion the effect, but also to devise strategies that would jump start and allow its rise. Failure in doing this would result in an economy being in the doldrums for prolonged period.
The truth is for years Guyana has been deprived of an Economic Plan that addressed a holistic approach to development. Outside of the Self-Sufficiency Programme (Feed, Cloth and House) and the Structural Adjustment Programme (Economic Recovery) which were implemented; the National Development Strategy and the Guyana 21 programmes have had no such opportunity. And where the vacuum exists in implementing a developmental strategy, erratic approaches to development followed, which have been the bane of Guyana ever since.
Ours is the unenviable reputation of having the longest structural adjustment programme in the western hemisphere.
This programme was implemented in 1989 by the Desmond Hoyte administration,and successive People’s Progressive Party/Civic governments did nothing to replace it. Instead, for years, though it would want to be denied, the parallel economy was allowed to play a buffering role. This was facilitated and masked by relaxing the enforcement of laws, including revenue collections, and abolishing a progressive tax system, replacing it by a flat tax of (33.3 percent) that saw primarily those in the formal economy having to carry the government.
The circulating of ill-gotten gains provided false security that the economy was active when in fact it has been insipid for years. Reliance on some knee-jerk injections such as tax incentives to party promoters where revellers through attendance and spending power provided revenue for the fashion, food and beverage sectors becoming an ‘economic programme.’ This pretence masked the inability to be visionary, think big, and long term. The pan-handling (international begging) approach as a developmental strategy, utilised by the past administration, not only exposed an inability to be futuristic but reduced the country’s respect in the eyes of others.
And while it cannot be doubted that the absence of confidence in an economy and concern about the leadership and political climate are disincentives to attracting investment and bringing about growth, at the same time legitimate business would shy away from investing in an economy where the underworld holds significant sway and influence. Outside of these, corruption and throwing money behind bad projects would hinder economic vibrancy.
A country where leadership, even as it acknowledges global market forces would determine free movement of goods and services, in the absence of a counter-balance through incentives and creating other enabling features for local ingenuity to blossom, overtime the economy is adversely impacted. Guyana should never be at the stage where it sees as better, cheaper, or more reliable having foreign produced plantain chips, tamarind balls, fried channa, rice, coconut milk, and so forth in our markets.
A country with so much resources, including human capital, has the ability to look beyond the confines of traditional sourcing of revenue to stimulate and grow an economy. Guyana needs a holistic programme that will factor in every facet of its human development, and presented in a format as was done in the Self-sufficiency Programme, Economic Recovery Programme, the National Development Strategy, and Guyana 21. As Minister Jordan has said “all that glitters is not gold”, referencing that which obtained under the past administrations.
He said the issue was one of sustainability and noted that Guyana’s economy was growing but at the time the APNU+AFC coalition government took office “it was running on fumes “and Jordan attributed that to the fact that Guyana has not diversified its economic activities after 50 years of independence and continues to be dependent on traditional sectors: rice, sugar, timber, gold, bauxite and fish.
The minister posited that some of the very industries that sustained the country’s economy have collapsed and at this point the economy has to “ripe itself”,something he says cannot be done overnight. “If we ourselves don’t adjust the economy, then we are just going to have to hand it over to somebody else to do it,” Jordan added,noting that “the ordinary man may not feel it like he had four years ago.” The reality he said was that the economy was ripening itself and Guyana had to prepare the economy for “the take-off.”
