Guyana has exhibited symptoms of flatlining since 2012, but we’re not dead yet, Mr. Jagdeo

Aug 26, 2015 Letters

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Dear Editor,
What is our community responsibility when deliberate misrepresentation of history arises? Do we remain silent? Or do we stand together and gently provide greater context to the situation? Such a situation arose when I watched the 2015 Budget Debate on August 21, 2015.
As was expected, former President Jagdeo came out “firing on all cylinders” and fire he did – that credit I must give him.  When one listened to his message, on the surface it sounded quite believable, but the minute one started to interrogate the substance of his speech, one quickly unearthed the dangerous nature of the deceptive propaganda.
One would expect a former President to be more responsible with empirical evidence. We heard on Friday how under the Hoyte/Greenidge administration, some 10,000 public servants were “let go” between 1986 and 1991. And then we heard about the depreciation of the Guyana dollar to the US dollar from G$4.50 to G$115.00 during the same period.
We also heard that the budget deficit in the same period was over 50 percent. But no effort was made to properly address the genesis of the causation of these developments.  Any high school student can survey the existing literature on Guyana’s economic and political development since independence and explain why these actions were mandatory during this period; notwithstanding the trauma they brought to the masses.
We need to remind Jagdeo that after 1968, in a Hemisphere than was dominated by the United States, the powers that be in Guyana in the 1970’s thought it politically opportune to launch into cooperative socialism, with all its leftist paraphernalia. At the 1972 Conference of Foreign Ministers for the Non-Aligned Movement in Georgetown, this objective was reinforced with phrases such as the “evils of American imperialism” by leaders at that time in the PNC led Government of Guyana.  Freedom House and the PPP leadership at that time rejoiced!
This political strategy was simultaneously accompanied by nationalization of the commanding heights of the economy.  Again Freedom House and the PPP leadership rejoiced so much to the point that they offered full “critical support” and political cooperation to the Government of Guyana in this march to the left. The Mensheviks and Bolsheviks were at one on the political and economic strategy. But every action has a reaction with consequences.
Clearly the United States was not impressed.  So in places like the boardrooms of the IMF, World Bank and IDB, they took action. The Soviet Bloc could not be counted upon as a fall back option since they themselves were already financially broken, but reluctant to admit their true economic condition until the Berlin Wall fell and exposed them.  So we all watched as little Guyana ended up in a battle for its life against Big America. The consequences were a foregone conclusion – Guyana trudged along towards bankruptcy and un-creditworthiness like goats going to the slaughterhouse.
In a situation where an economy iss bankrupt and not creditworthy, there are few elementary policies that you must take to return the nation to solvency. This is exactly what the Hoyte/Greenidge administration did between 1986 and 1992. The Hoyte Government implemented a few policies to inspire the confidence of investors.  But this meant our exports had to become more competitive, our budget deficit had to be arrested and a more rational macro-economic framework established.
That can be decoded as painful economic medicine which entailed at minimum fiscal responsibility (decrease the size of the budget deficit by shrinking the size of the public service and cutting other costs) and devaluing the dollar (makes imports more expensive and exports more competitive).
It took a very brave Hoyte/Greenidge administration to engage the then largely destroyed private sector who were overwhelmingly East Indians to the point that some referred to Hoyte as “Desmond Persaud”.  But Hoyte and Greenidge were absolutely clear about what was needed to re-launch Guyana; the fruits of which the PPP reaped at the start of their term. It was an economic strategy called the Economic Recovery Programme (ERP) which Dr. Jagan and his Finance Ministers (Ally and Jagdeo) fully embraced.  The objective of the ERP was to restore economic growth, incorporate the black market into the official economy, eliminate imbalances in the financial sector and finally return Guyana to creditworthiness.  Done on all four counts before 1992!
In the final analysis – perception in everything in politics and Jagdeo left a perception that the economy is flatlining in 2015 and in his mind the 2015 Budget cannot reverse this situation. But how can a five months Budget reverse a period of economic meltdown that started since mid-2012? We now have a growth rate for the first six months of 2015 of 0.9 percent which was caused by bad governance, greed and material deviation from the economic framework set up by the ERP since 1988. So, if there is anyone who should be answering for this flatlining of the economy in 2015, it is Dr. Ashni Singh, not Winston Jordan.
I remain convinced, like the Hoyte and Jagan administrations in the past; this Granger/ Nagamootoo/Jordan administration can turn this country around since they have the wind of the people in their sails for now.  But certainly, no rational mind will expect an economic miracle in three months. We may at this time be exhibiting some serious symptoms of economic flatlining, but we are not dead yet, Mr. Jagdeo.
Sase Singh

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