Guyana trails the Caribbean in economic growth, and the reason is obvious

Dec 21, 2013 Letters

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DEAR EDITOR,
For the past two decades, Guyana has desired and pined for robust economic growth but so far has not attained it. Sadly, not only has it not achieved economic growth, it has also steadily declined while other nations around it have experienced increasing growth.
The Bahamas, Barbados, Jamaica, Trinidad and Tobago and The Cayman Islands were on par with Guyana or just behind it in economic growth in the 60s. Now, they are far ahead, (except for Jamaica) nearing First World status, leaving Guyana in the dust.
In 2011, Guyanese voted for a new political dispensation, hoping that it would bring relief to their plight, but so far, nothing has changed except for rapid increases in corruption, crime and cost of living and the reckless spending of the taxpayers’ money on ill-conceived projects aimed at benefitting a few.
It seems to us that, despite all the talk about wanting and pursuing economic growth, this corrupt regime has either not understood what economic growth is, or how to attain it. They have been unable or unprepared to do what is required. If we are to believe their bogus claim that the economy grew at five percent, then why are they refusing to give the civil/public servants a 10% increase in wages and pay pensioners $20,000 per month instead of the meagre $12,500.
The truth is, Guyana’s economy is in shambles and the wreckage is around for all to see—high unemployment, widespread poverty, huge potholes in the streets, dilapidated buildings, poor health care and educational services, poor water supply, constant blackouts, and a stinking capital city. The poor economic situation demonstrates the highly mobile nature of both labour and capital, as skilled personnel and investment capital have left the country.
Now, into the 21st century, Guyana is back to ‘square one’, with the people hoping that the latest extensive borrowing from international and regional financial institutions will bring relief, though similar borrowing in the past brought nothing. Borrowing money is one thing, growing the economy, creating jobs and reducing poverty, corruption and crime are another. The truth is, this regime does not have the wherewithal to grow the economy or create jobs and they have proved to be highly incompetent in their efforts to reduce crime and corruption and improve the lives of the poor.
For Guyana to achieve economic growth, the regime must understand what economic growth is, the obstacles to it, and must be prepared remove those obstacles – crime and corruption. For, until these obstacles are removed, the masses will continue to suffer.
Policies must first be put in place to attract and retain foreign investment. The country’s huge size and undiscovered natural resources cannot provide all it needs without outside investment. But the question must be asked: Is Guyana attractive to foreign investment? Another way to ask this question: If you were a foreign investor wanting to do business in the Caribbean, would you pass over countries such as Barbados, The Cayman Islands, The Bahamas, and invest in Guyana?
Why would anyone choose to invest in a country with prohibitively high corporate taxes? Guyana has one of the highest, most burdensome tax regimes in the Caribbean. Its Corporate Tax rate is between 30 and 45 per cent compared to Barbados with a rate of 25 per cent that can be reduced to 1.75 per cent and the Bahamas and Cayman Islands each has zero corporate tax rates. Then there is the perennial corruption in government and the ordinary citizen; from the corruption at the wharf, when you import goods, to the corruption doing business with the government and the man in the street. And there are not enough skills, technical or otherwise, left in the country due to migration.
Above all is the increasing scourge of crime. A potential outside investor only has to go on the Internet and read the independent newspapers to see that if he sets up shop in Guyana he will be putting his life and those of his workers at risk. Millions of dollars are lost to theft every year, both from workers and business people who refuse to expand so as not to lose more to thieves. And millions are lost due to crime, as actual dollars are lost in the high cost of security or are passed to consumers in high prices. And the people and country suffer. Thus the vicious cycle will never end.
The bottom line is that this regime has done nothing to reverse the obstacles of crime and corruption in order to attract foreign investment so that the economy can grow and jobs can be created. Doing this will definitely ease the burden on the poor.
Dr. Asquith Rose and Harish S. Singh 

 

 

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