Glorious days are so far away

Aug 10, 2016 Editorial

Based on recent statements from the Minister of Finance, one can deduce that the country’s current economy is by no means anything to boast about. Quite frankly it is not as expected. Tax collection is down and many businesses are experiencing difficulties as a result of average sales. Instead of spending, people are essentially hoarding their money.
One could say the government is not being forthright with the public. It is doing a disservice to the people by presenting an overly optimistic belief that the economic difficulties facing the country are easily manageable. It is wrong. It is wishful thinking for the government to believe that the citizens can be lulled into a false sense of security. It is always wise to report on the facts.
In support of the Minister, the governor of the Bank of Guyana has also reassured the people that the economy, which is currently at two percent growth rate, will increase to 4.4 percent by the end of the year. But no evidence has been provided to support the claim for such a substantial recovery.
The truth is, no country has had such a significant growth rate in six months, not the United States, China or Germany. However, for any short term recovery to take place, the government has to encourage the private sector to inject hundreds of millions of dollars into the economy, especially in the agriculture and mining sectors.
Few believe that the economy could recover from its present GDP growth rate in such a short time. The shutting down of the Wales Sugar Factory at the end of the year will not aid in this regard. In fact, it will more than likely result in staggering losses in totality. It will be a lingering crisis for a government which has not announced any definitive plans about what it intends to do with the estate.
It seems that the authorities are at a loss and are hoping the issue just goes away. The perennial huge debt, massive borrowing and extensive government spending are a recipe for financial disaster. They could also result in economic contraction and a loss of jobs and revenue.
It is a fact that too much damage has already been done to the sugar industry by the last government for it to recover. The granting of as much as $12 billion in subsidies annually by the government to keep the sugar industry afloat is a drag on the economy. And the rice industry is barely doing better. The cancellation of the PetroCaribe agreement by Venezuela due to the border dispute with Guyana has reduced the price of rice by almost 50 percent from US$730 dollars a ton to US$390 a ton, which is the current price on the world market.
All of this spells trouble for the economy and the government, which must continue to maintain and improve the social services in the country. Given that the economy is ailing, the people need answers to the following questions: How, in the prevailing circumstances, will the government preserve the country’s free secondary education system? How will it improve the services at the public hospitals? Where will it get the resources to repair dilapidated infrastructure it inherited from the last administration? How will it solve the problems of water shortage and the frustrating power outages across the country? Can it create jobs for the 10,000 young people who graduate from secondary schools and the University of Guyana every year?
It is normal for a government not to have solutions to all the problems. However, unless this nation’s leaders develop and implement a solid economic plan to boost the economy, they certainly will not be able to provide a better life for all, as promised. Glorious days are so far away.

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