Latest update March 20th, 2025 5:10 AM
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THAT MID-YEAR ECONOMIC REPORT
The 2016 mid-year economic report has indicated that there has been no recorded growth in the major sectors of the economy, except for mining and quarrying. According to the report, the economy grew by two percent in the first six months of the year due to the decline of sugar by 30 percent, rice by 26 percent, manufacturing by 14 percent and forestry by 13 percent.
Overall, agriculture, which is a major foreign currency earner, fell by 12 percent. The significant growth in gold could offset the decline in the major sectors, but it is too early to tell. The contraction of the economy is disconcerting and could spell trouble for a country that spends more than it earns and imports more than it exports.
With the slowdown in the economy, the government would be advised to establish a Council of Economic Advisers, with diverse views and different perspectives on how to stimulate growth. The Council, if properly conceptualized and allowed to function freely, could create significant initiatives.
Every initiative the authorities have tried in the past year to boost the economy has sputtered and the dial has moved in a negative direction. Sound policies are needed for the growth rate to reach four percent by the end of the year as forecast.
The belief that grandiose projects could do so is wishful thinking. It did not happen in the past and is unlikely to occur now. The economy has been limping at an anemic two to three percent growth in the past year and very little was done for it to recover. Part of the answer lies in an inadequate workforce, and the fact that the economy has been starved of capital while the government tries to woo foreign investors with little if any success.
Small businesses are the backbone of the economy, and if neglected and strung up by mindless regulations and lack of capital, they cannot contribute to growth. Without robust growth in small enterprises the economy cannot take off. This is basic economic sense. It seems that the authorities are aware of this, but except for speeches, they have not done much to tangibly support small businesses. GO-Invest has always seemed to be an entity without initiatives of how to grow the economy. And while the Ministries of Finance and Business are scrambling to find solutions, the economy is fading fast.
Unemployment could well be at an all-time high, as thousands of youths and others eligible to work are not meaningfully occupied, and many who are employed are in low-paying jobs and cannot by any means make ends meet. These are worrying trends and the challenges facing the current administration may well be too difficult to overcome unless proper advice is sought.
In the last year, sales and revenue have fallen and with the onset of the Brexit impact in addition to no emergency monetary policy in place to stimulate economic growth, the country will find it difficult to stave off whatever may be breathing down its neck.
So far, there have been no announced plans to grow the economy, create jobs and reduce food imports. And there are no economic czars to help the government solve the fiscal woes of the country. Printing more money will not be a solution; that will fuel inflation.
We believe that there are many willing and capable Guyanese here, and in the diaspora, who can be called upon to be part of the aforementioned Economic Council. The fact that there has been reticence, and in some cases obstinacy by some in authority, to seek quality assistance to help solve the country’s problems, is min-boggling. That mid-year economic report should change those attitudes.
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