Good economic practices are cushioning Guyana

Oct 22, 2008 Features / Columnists

Guyana is cushioned against the global financial crisis, but that does not mean to say that it will escape some of the harsh effects that are affecting the rest of the world. Already President Bharrat Jagdeo has told the nation that there could be a loss of some financial inflows by way of reduced remittances and a scarcity of loans for macro projects such as electricity expansion and the hydro electricity programme.

Initially, many saw the crisis as a blip, because the financial managers in the United States had convinced the world that there was no problem with whatever investment the United States had attracted. But there were signs; from the time the housing mortgage crisis hit, to the wobbles on Wall Street, there was every indication that things were not normal.

These things happened at the same time that food prices were rising globally and when speculators and industrialists were buying grain to make an alternative fuel. The critics said that Guyana would collapse and that untold hardships would visit the nation. Freddie Kissoon blamed failed economic policies, even though he has not the slightest inkling of what economics is.

By the time the panic subsided, the people of Guyana knew that they had nothing to fear, unless they wanted to rely on imported foods. The people never realized it, but Guyana was producing enough food to cushion it from any external factor. What the global crisis did was to put money into the pockets of the farmer who over the years has been keeping the nation alive.

There was no mass starvation as the critics expected. Even the higher oil prices did not rock the nation as some expected because the government took condign action to ensure that the nation did not suffer harshly. Those who expected to see motor vehicles disappear from the roads because the country was too poor were forced to shut up.

Therefore, when President Jagdeo said that Guyana is cushioned against the financial crisis, he knew the kind of economy he had fashioned and he was confident that the people of Guyana would not be unduly affected.

The remittances that the Inter American Development Bank placed at about 40 per cent of the economy are still coming and for the records they never accounted for a sizeable portion of the economy. Had they not been coming, the exchange rate on the streets would have jumped alarmingly.

However, the Head of State knows that he is presiding over a country of resourceful people who now recognize that they have not tapped into their full potential.

They see development continuing around them, and while they become frustrated that some of the projects take longer than necessary to be completed, they know that this has to do with factors other than the global issue that has hit other countries.

For example, there is awareness that the country does not possess the level of skills that it once did and they know that if they move to qualify themselves then they could be the better people they want to be.

But even as these things are witnessed by the nation, the people are seeing falling prices, just as the Head of State promised. Rice, which once fetched a hefty price, is so much cheaper as are many other commodities.

The seasonal high prices of green vegetables has been something with which the nation had to put up, so there is no fear or worry in this area. Guyanese know that within weeks these prices will also fall.

It is therefore almost laughable when the Kissoons and others of his ilk talk about economic mismanagement. What they may wish to criticize are the cases of systems collapse, as is the case of the electricity company. And nobody can blame the government for this.

Machinery is becoming obsolete and the length of time it takes to order replacements is inordinate. Most of the pieces of equipment can only be fabricated on order and Guyana was never in a position to stockpile expensive pieces of equipment because of financial considerations. However, the management should have foreseen the problems and it is here that the government must act.

Yet there is a contradiction, because the Kissoons talk about micromanagement, suggesting that President Jagdeo seeks involvement in every sphere of economic activity in the country.

For the critics, now, to seek to blame the government for what is happening in the electricity sector is predictable. President Jagdeo and his team are in a Catch-22 situation and it is for this reason that there will always be the critics who at the drop of a hat will blame the government.

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