Not the time for exaggeration

Oct 12, 2008 Editorial

Serious as it is, political leaders need to be careful in their assessment of the global financial crisis. Exaggerating the extent of the problem could but only cloud our judgement and leave us vulnerable to viewing this crisis as the root cause of problems in the local economy, problems which are mainly divorced and insulated from the global contagion caused by the sub-prime crisis in the United States and Europe.

It is not so much this global crisis as it is the fact that it is taking place at the same time as the global community confronts the threats of rising food and fuel prices, as well as climate change which should concern all Guyanese who are also experiencing their own difficulties at this time.

From all indications, the first half of this year saw Guyana’s economy continuing its recovery. However, problems have begun to develop in one of the major sectors of the economy— sugar.

These problems could forebode a decline in the anticipated growth in the economy for this year, something that the Government would be hard-pressed to explain.

Certainly, it would be too early to blame the global financial crisis for these problems in the local economy. Thus it is important that the global crisis does not obscure or become the excuse for the problems that are likely to face the economy in the last half of 2008.

Political leaders must therefore be responsible in not exaggerating the extent of the global financial crisis. While it remains one of the gravest crises to have ever hit the international community in over seventy years, it cannot be justifiably described, as our President did in his recent press conference, as the world’s worst ever financial crisis.

That distinction belongs to the Great Depression of the 1930s, a terrible period for the world, which saw the savings of millions of ordinary citizens wiped out overnight as the stock market crashed in what was a global catastrophe.

The Great Depression was one of the most calamitous events in world history. It led to the closure of the US Stock Exchange, something that has not occurred in the present crisis; the loss of millions of jobs, with close to twenty-five per cent of all working Americans without work, something that is not predicted in the present scenario; the almost immediate impoverishment of millions of persons, and the closure of thousands of businesses. Its effects spread globally, and that spread was rapid.

There will, of course, be repercussions from the present crisis, but it is hardly likely to even come close to the effects of the Great Depression. Even the International Monetary Fund this week has predicted that recovery is likely by late next year.

For its part, the financial sector in Guyana, because of its provincial nature, has been virtually insulated from this crisis. Nevertheless, it is expected that there will be repercussions in other sectors.

For this reason, the President’s call for a national stakeholder meeting to discuss the crisis and our response is a step in the right direction.

We hope that this session is called early, and that labour will feature prominently, since, if there is any sector which at the moment requires supportive policies, it is the labour market, which before the onset of the global financial crisis was reeling from the effects of rising prices.

We hope that when this meeting is held, it does not become another lecture session, but that, instead, the Government especially would be willing to talk with, rather than talk to, the participants, so as to arrive at the most suitable and less painful menu of measures to help further cushion Guyana from whatever ills this global financial crisis will bring our way.

More importantly, we hope that this global financial crisis does not become a diversion from the home-grown problems of our economy.

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Not the time for exaggeration

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