The Private Sector has a role in helping Guyana, now

Aug 10, 2015 Letters

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Dear Editor,
The article in Kaiteur News, August 7, 2015 ‘The Government Needs Help’ could be more definitive.  It is clear that ‘crime, unemployment, and poverty’ is popping up around the country.  These are the areas where the Government needs help the most, as was identified in the ‘Global Human Order Conference’ sponsored by the late Dr. Cheddi Jagan.
The Private Sector Commission’s sense of realization about the state of the economy and its lament on what to do is a bit too late.  There are fundamental processes at work that need to be reversed.
The Private Sector should know that when the government sector or government sponsored projects are spending on imported goods and services and they do not also earn foreign exchange, on their own account financing, the remaining economic sectors would experience declines in spending for both investment and consumption.
This is the classic case that economists refer to as ‘government spending displacing private spending.’ In an open economy, we cannot fool the sectors all of the time.  Reality would break out. We cannot move money from the left pocket to the right pocket internally and expect to grow the economy.  Economic decline would be the certain result.
I believe that Government has sufficient experiences and reports at its disposal to understand the problem and what to do, as it is currently doing in several areas to tidy up government management and its finances.
Looking at the exchange rate alone is superficial.  A real sector analysis of the economy requires digging deeper into the country’s economic structures and their linkages in agriculture, manufacturing, and services.
The editorials of this newspaper have done a good job of pointing out essential relationships and made a variety of policy suggestions, such as various inefficiencies and mismanagement in the country, including what to do to control floods, and generate value-added projects to name a few.
There are also many examples that abound in peasant agriculture, commercial agriculture, furniture making, etc. in such faraway places as India and Australia. These countries at the local level can help Guyana.
The ability to take local resources, such as timber, gold, diamond, and agricultural land and turn them into a net foreign exchange earner through value-added inside Guyana could provide a bright future for Guyanese.
We need to be less mean to the Guyanese people who understand that farms are factories and money grow on trees. Guyana should distribute from 5 to 15 acres of agricultural land to bona-fide farmers for inland fishing, shrimping, and various commercial tree and cash crop production.
Fifteen acres is the optimum small farm size in Canada and is close to the Black Bush Polder acreages for homestead and farming, revealed when I last checked with the late President Dr. Cheddi Jagan.
So far, we have been permissive to companies that cut wood and sell at zero price for a tree, while bagging huge financial gains by trading Guyana’s forestry and mining leases in Montreal, Vancouver, Toronto, and New York, using the sale of stock prices to earn interest income, and pay overseas dividends to the lucky owners of the shares based on Guyana’s land leases, (My Movie Script, ‘En La Sombra De Mi Gente).
The PSC is wringing its hands about economic collapse.  The savings, investment, and financing processes should be monitored closely. The private sector needs to look in the mirror for solutions to Guyana’s problems. It is clear that we cannot continue to shift spending on imports of goods and services to the Government or private pet projects without either authority having their own foreign exchange to draw down.
The spending imbalance will lead to poor private sector street expectations on the external value of the Guyana dollar.  The situation will worsen if exporters begin to hoard foreign currency and investors do not bring in foreign dollars to buy their imported goods and services.
Moreover, the PSC should help government to investigate capital flight, private sector remissions or their members’ stinginess in bringing back needed export earnings for funding investments in Guyana. Government needs the help of the private sector to examine the flow of funds into and out of ‘Trust Companies’ and other shadow banking entities to prevent money and bond laundering involving private companies transacting with Guyana.
The pie in the sky fiber optic cable and massive hydro electric production money spinning projects would succeed if the children of farmers get a good education to make use of those new opportunities in the future.
We should not depend on Venezuela and Brazil to buy surplus hydro electricity from Guyana.  Meanwhile, we should bet on solar and wind, build a national grid system, and encourage local investors to develop supplies, including mobile co-generation electricity plants for the grid.  The Wartzilla methods drain our resources through repairs and maintenance billing by its financial arm, White and Blue. In addition, their capital recoveries for financing are not transparent.
Finally, to deal with poverty, we may have to start with a long term policy of agricultural land and infrastructure development and land distribution that would engage the unemployed and spawn a new breed of entrepreneurs who would become viable farmers and agricultural food processors, as a start.
Ganga Persad Ramdas

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