Jagdeo blasts US report on Guyana

May 01, 2010 News

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“I don’t care about some sterile economic index and our ranking on that”

Head of State, Bharrat Jagdeo, blasted the 2010 Economic Freedom Report on Guyana which was prepared by Heritage Foundation along with the Wall Street Journal. It lists Guyana’s economic freedom score at 48.4, making its economy the 153rd freest in the 2010 Index of Economic Freedom.
Jagdeo said that the report was prepared by a right wing organisation in the US and lamented what he called this publication’s coverage of the report as gloating which emanates from ignorance of the understanding of the concept of development that the people who put together the report and the index that they subscribe to.
He was at the time speaking at the commissioning ceremony of the GUYOIL service station in Diamond, on Thursday.
Jagdeo, in response to the suggestion that the oversized government is the main barrier to development in Guyana, said that the Government has expanded the public sector but it should not be seen in a negative light.
He spoke of the benefits of not privatising GUYOIL. He said that it has allowed for the regulation of the sector, given that had it all been in private hands then there would be no deterrent in place to prevent consumers from being taken advantage of.
Jagdeo said that if in the pursuit of the betterment of the people of Guyana that he has to expand the public sector then he will.
The Head of State added that investing in areas such as health and education will see a decline in the rating on the reports, “but again we don’t care…The government I head is not managing the country for some index.
Jagdeo said that the report will not affect the investors of potential visitors in that they will not pay attention to such reports.
Speaking to the authors of the report, Jagdeo said that what happens here on the ground in Guyana is very different and the people in Washington preparing the report and writing the indices do not have anyone on the ground here in Guyana.
He pointed to the report of that of the International Monetary Fund which stated that Guyana was one of the best managed economy in the crisis year.
Jagdeo also lashed out at the media, particularly Kaieteur News, for what he called an illiteracy in analysing the reports but rather to gloat in the negatives.
“They have become like parrots they just draw things down and gloat about it in the end without any attempt to seriously analyse these things.”
Jagdeo said that he had a country to run and will probably never in his lifetime meet with authors of the report, “it doesn’t bother me.”
Kaieteur News Editor-in-Chief, Adam Harris, in response to Jagdeo’s statement said that the newspaper simply presents to readers, all the evidence that is out there.
“Kaieteur News has presented the positive reports and the negative ones. It is not the aim of any newspaper to seek confrontation with a government so for the President to vent his spleen because the newspaper reports on yet another report is most unfortunate.”
When asked about the charges of widespread corruption levelled against the Guyana Government Jagdeo queried, “Yes, widespread based on what?”
He suggested that checks be made with the Millennium Challenge Corporation which is prepared by the US Government and which says that Guyana scores above average on fighting corruption.
When Jagdeo was told that the negative report was prepared in part by the Wall Street Journal (which is one of the most respected institutions in the US) he said, “Wall Street Journal doesn’t mean anything to me.”
The 2010 report that was recently released slated Guyana as having relatively high tax rates citing the income tax rate, corporate tax rate at 45 per cent with “other taxes including a property tax and a value-added tax (VAT).”
In the most recent year, overall tax revenue as a percentage of GDP was 35.7 percent.
Total Government expenditures, including consumption and transfer payments were listed as high, while privatisation of state-owned enterprises yielded mixed results according to the report.
“Poor management of public expenditures has led to persistent fiscal deficits. In the most recent year, Government spending equaled 49.6 percent of GDP.”
The 2010 report showed the inflation rates as being high, averaging 9.0 per cent between 2006 and 2008, but has been falling steadily from a peak of nearly 12 per cent in March 2008.
“Guyana has been moving toward a more welcoming environment for foreign investors, but major foreign investments receive intense political scrutiny in an economy still dominated by the state.
The approval process for investments can be burdensome and non-transparent…While there is no mandatory screening of foreign investment, the government conducts a de facto screening of most investments to determine eligibility for special tax treatment, access to licenses, availability of land, and approval for investment incentives.”
The report added, also, that investment is hindered by crime, corruption, inefficient and burdensome government bureaucracy, non-transparent regulations, a weak and burdensome judiciary, and an inadequately educated workforce.
Guyana’s judicial system was also lambasted and is listed as slow and inefficient. “It is also subject to corruption. Law enforcement officials and prominent lawyers question the independence of the judiciary and accuse the government of intervening in some cases.
“A shortage of trained court personnel and magistrates, poor resources, and persistent bribery prolong the resolution of court cases unreasonably…Widespread corruption undermines poverty-reduction efforts by international aid donors and discourages foreign investors.”

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