What macroeconomic policy?

The Guyanese struggle is not one for survival but one for development.  Our land is rich and our people resilient.  We have survived slavery, indentureship and a long period of repressive colonialism.  We overcame almost three decades of post-independence misrule by the PNC and are currently witnessing the blatant diversion of the wealth of our country into the hands of a chosen few, under the guise of governance by the PPPC.
In the meantime we remain an underdeveloped country with an underperforming economy and an underemployed population.  Our formal economy relies largely on the same set of raw materials that we’ve been exporting since before our independence: sugar, rice, gold, bauxite and timber.  Our informal economy, which many suggest is bigger than its formal counterpart, is fueled by illegal drug exports and undeclared gold.
Today, the single biggest contributor to Guyana’s foreign earnings is gold.  This makes it a key pillar upon which our economic performance (both formal and informal) rests. Our economy faces a major challenge from the falling gold price which is now down 18% since the start of the year, and 27% shy of its all-time high of US$1896 per ounce, which it hit back in September of 2011.
It is therefore interesting to note the seemingly recent discovery on the part of our government that, in the world of gold production, we in Guyana are what are known as “price-takers”, meaning that our production is not significant enough to affect the market price of gold.  In other words we pretty much have to accept the going rate. What is noteworthy about this is not so much the concept of price-taking, but rather the posturing of this very government during the years when gold prices were rising exponentially.
We kept hearing about the robust performance of our economy, and Government’s sound macroeconomic policies and prudent fiscal management. There was never any hint that the consecutive years of economic growth, recorded from 2007 to 2012, were due largely to a phenomenon over which this government had absolutely no control, i.e., the rising price of gold on the world market.
In fact, while the world’s major economies were struggling against an economic recession that severely affected global markets, our government gloated all the way to the bank that it had astutely maneuvered us out of harm’s way.The impression created was one of financial wizards tweaking and tinkering away to keep us afloat while their less competent counterparts, both regional and international, were unable to prevent their economies from tumbling into recession.The price-taker syndrome seemed not to matter back then.
A major plank in the AFC’s platform has been economic transformation.  We have repeatedly emphasized diversification as a means of sustainable economic growth and job creation. This is not a concept of our own invention, neither are we the only ones who recognize the importance of adding value to the raw materials we export and broadening the base from which we derive our foreign earnings.  Achieving this, however, requires an approach and an effort that the PPPC Government seems incapable of formulating, let alone implementing.  They continue to take us for a ride on the global wheel of fortune, skylarking in the backseat while pretending to be at the controls.
This will not bring about the economic transformation required to enable the kind of development that has eluded us for so long.What is needed is a national vision, signed onto by all stakeholders, from which can derive a long-term development plan or strategy that is clearly understood by all.  Our current path is random and opportunistic, with no clear context in which to frame the massive capital investments that are placing an enormous debt burden on our nation.
Neither will the parallel economy bring about real development.  Much speculation surrounds the actual size of this layer of our economy, but all indications suggest that it is significant.  This clearly creates a serious challenge to legitimate operators who find themselves hard-pressed to compete with the unlimited supply of unregulated and untaxed goods and services offered informally throughout the country.  The excess liquidity splashing from the coffers of a growing criminal network blends seamlessly into this scenario, creating a dangerous faÇade which the current government seems to be confusing with progress and is reluctant to curtail.
The AFC recognizes that even in a free-market economy the government has a responsibility to guide or attract investments in a direction that is consistent with some sort of strategic long-term plan.  Unless it is the grand scheme of this government to turn Guyana into a dumping ground for low-quality consumer goods and the packages they come in, then it has failed miserably in this regard.  It ought to have occurred to them by now that investors, whether local or foreign, are interested in two things: extracting our raw materials and intercepting some of the cash circulating within our economy.  This is not a condemnation of these investors but a reality which a prudent government would have sought to remedy by implementing measures to attract investors into a broader range of sectors, capable of increasing foreign earnings and providing new and better paying jobs.
The PPPC government has had more than twenty years in which to advance its developmental agenda.  For nineteen of these years it enjoyed a parliamentary majority. This has given it more time and more power than almost any government in any democracy anywhere else in the world.  Their constant reference to how badly off we were in 1992 when they took office is of absolutely no relevance in measuring their performance over this period.
That they failed to place us on a path to development was clearly indicated by the ease with which they were able to suddenly switch to a Low Carbon Development Strategy when the sum of 250 million US dollars was dangled before them in 2009. Is there really a development strategy attached to this sound bite or is it just a means to fund a few projects, the benefits of which will never trickle down to the average Guyanese?
It is our conclusion that Guyana remains economically adrift due to many decades of bad governance and poor planning.  This leaves us particularly vulnerable to influences beyond our control.  It is hoped that the price of gold will rebound and continue on an upward trajectory, strengthening the sector for years to come.  It is also hoped that the recent exposure of our overreliance on this sector is a loud enough wakeup call to those in charge of our economy.
But hope is not enough.  Guyana needs a plan.  Not a PPP plan or a PNC plan.  Not an AFC plan or APNU plan.  Not an IMF or World Bank plan or a Chinese or a European plan, but simply a Guyanese plan which transcends politics and ethnicity, to lead us out of third world.  Until then we will just survive.