President Bharrat Jagdeo needs a viable vision beyond the IMF/WB

Jun 03, 2009 Letters

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Dear Editor,

My letter, “The President should think about redeeming his sagging legacy,” (April 27), urged the President to at least spend the remaining two years of his tenure working on restoring public confidence in Government since he has not delivered in a meaningful way to ordinary Guyanese on pocket book and wallet issues.

Dr. Prem Misir (seemingly of no fixed official designation in Government) reacted on May 13 with a letter, “The economy must be evaluated in the context of external economic shocks, the legacy of the PNC and the years it took to attain financial viability,” (SN) to highlight what he deemed economic progress made by the PPP and the President relative to Guyana’s debt. From then to now, Dr. Misir spent an enormous amount of time deluging us with financial statistics and economic data to make his case for the Government, and while I credit him for at least trying to do his job as a media spinner, the rhetoric of his records still do not gel with the rawness of the people’s reality. If he doesn’t get it by now, he likely won’t get it anytime soon.

In his latest letter, “The Mervin debt relief saga,” (KN, June 2), he continued with more of his propaganda and spin by again reaching into the Government’s data base for more stats to help make his case for the goodness/benefits of debt relief, and I think he owes me a ‘thank you’ for making it possible for him to exhibit to his bosses that he knows how to take stats and turn them into information packages for readers, who may or may not be impressed, let alone be relieved and assured.

By the way, calling him a spin doctor was as easy as him calling my reasoning a chimera, so he needs to chill out! It’s either what I have written so far have struck a raw nerve in Dr. Misir thus forcing him to rush to defend the indefensible, or he was looking for the first opening to get all this bottled up information into the public domain. But is his defence of Government really connecting, with ordinary Guyanese?

He wrote, “…many comments on Guyana’s development fail to appreciate the implications of a huge debt burden; and the nine or 10 years subsequent to 1992 that elapsed before Guyana could reach financial viability. And so, given the lead time for the realisation of financial viability under the PPP/C’s watch, we are looking at less than 10 years when it comes to review this country’s developmental gains.

This letter writer has no comments on the time it took to reach financial viability; this was a period when little or no revenue was available for social sector development. Why did he not make any comments on the lead time for financial viability?”

Let’s examine his reasoning here, which implies developmental gains (automatically?) follow financial viability, shall we? Since nine or 10 years subsequent to 1992 would mean he is talking about 2002, is he saying that Guyana achieved financial viability in 2002; 10 years after the PPP returned to power, five years after Dr. Cheddi Jagan died and three years after President Jagdeo took over from Janet Jagan? Or is his spinning making him dizzy and discombobulated?

Further, if, according to him, 10 years (1992 – 2002) were ‘the lead time for the realisation of financial viability under the PPP’s watch, (and) we are looking at less than 10 years when it comes to review the country’s developmental gains,” then if we achieved financial viability in the 10-year lead time ending in 2002 and this is 2009, aren’t we supposed to be currently conducting a review of our developmental gains? What he may be dubbing developmental gains, for

others may just be growing pains!

This Government, which continues to be tied to a communist-oriented party, takes great comfort in quoting and citing the IMF and WB reports on Guyana achieving macroeconomic stability when the reports reflect favourably on the Government, but let’s be honest in our analysis. In the 16 years subsequent to the PPP’s return to power, but especially the last 10 years of the Jagdeo presidency, while the Government worked with the IMF/WB on Guyana’s debt, the Guyana economy was buoyed by fresh loans and grants, foreign remittances that could easily range between US$200M – US$400M a year, and the spin-offs from the informal economy (drugs and money laundering) that constituted about 40 – 60 percent of the formal economy.

According to the US State Department, proceeds from illicit drug smuggling from Guyana accounted for 20 per cent of the GNP in 2007, and it has been confirmed that almost one billion dollars were remitted from America in 2007 and 2008. By the way, do we know how much money was remitted over the years from other countries where Guyanese reside?

In short, while the Jagdeo administration was working with the IMF/WB, other factors were at play that made a huge difference that Government just doesn’t want to talk about. I will say it again: if we minus new loans and grants, foreign remittances and the drugs money, there is not way Guyana could have survived the way it did by having Government simply adhere to the IMF/WB. The Value Added Tax (VAT) regime alone could easily have spawned riots! Meanwhile, Guyana’s resources are begging to be exploited so the economy can do more than just achieve macroeconomic stability.

As an aside, I have noted the speed with which Dr. Misir reacts to my published letters and the volume of stats he readily presents, but I was seriously hoping that either he or someone from the Government or the PPP would have reacted by now to Dr. Henry B. Jeffrey’s letter on the genesis and growth of Guyana’s foreign debt and Dr. Cheddi Jagan’s plans not to repay the debt, but bolt the capitalist system for the socialist bloc system, only to have to settle for dealing with the IMF/WB after the socialist bloc collapsed. (Was that what caused the heart attack?) By all accounts now, Dr. Jagan certainly did have not a comprehensive plan for Guyana; only a plan for Dr. Jagan and the communist PPP and it explained why the Jagdeo regime is now stuck on the IMF/WB.

What exactly is there to praise this man about? Playing by the IMF/WB rules? The President needs a viable vision beyond the IMF/WB or he risks running Guyana according to the IMF/WB.

Folks may agree or disagree with him, but Florida-based Guyanese economist, Dr. Tarron Khemraj offered an interesting perspective in understanding the IMF/WB-government relationship when he wrote in a blog, “The PPP government’s economic policy agenda is rooted in the IMF’s stabilization mechanism – essentially IMF does the thinking and analysis for them (but at the same time the party itself vociferously holds on to the Leninist tenet of democratic centralism so the will/whims of 15 individuals can be foisted on the masses!). Part of the IMF’s agenda is something known as financial programming which the BOG implements. Essentially they liberalized everything; put a lower target on the Central Bank’s Net foreign Assets (NFA) and a maximum target on that institution’s Net Domestic Assets (NDA).

All this is premised on the assumption that once macroeconomic stability (through deflation) is maintained the markets will naturally do the rest on the supply side (while, of course, the ideas and views of those 15 individuals are paramount). But this is a mistaken view (and of course reeks with hypocrisy!) and an insufficient policy agenda, although macroeconomic stability is important but just part of the policy toolkit required for sustainable long-term growth.”

I will now leave Dr. Misir to wax euphoric with his hard stats and data to big up his Government’s handling of the Guyana economy, but I will continue to closely follow the harsh realities of ordinary Guyanese.

Emile Mervin

 

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