TOUGH TIMES AHEAD

Oct 31, 2016 Editorial

The election of the APNU+AFC government was welcomed by most Guyanese both at home and in the diaspora. They were of the view that the government would end corruption, reduce crime and improve the economy and create jobs. But the economy remains stagnant and has contributed to higher unemployment, increased poverty and possibly crime. It is disheartening to many that the government has not implemented any solid policies to turn around the economy.
The economy is ailing and this is particularly noticeable within the business community which has experienced its lowest output during the last nine months as reported by the Bank of Guyana. The decline in production suggests that tough times are ahead for the country and the people. In Guyana’s mixed economy model, the private sector is assigned the important role of the engine of growth. It therefore stands to reason that if the business community is becoming less upbeat about the country’s economic prospects, they are less likely to invest in new projects, which will have a negative impact on economic growth in the country.
However, the role of the government is to create an environment for business to flourish so that the economy could gain momentum. But for this to happen, the government has to engage the private sector and the wider public in more meaningful discussions, so that everyone can contribute to the development of the economy. But so far, there has been hardly any communication between the government and the people. In fact, the public is of the view that the government is shrouded in secrecy and many in the cabinet have not seen it fit to seek professional and expert advice to help in the development of the country.
The government should consider the issue of tax reform with a view to ease the burden on both businesses and individuals. A higher and complicated tax system seems to be a disincentive for companies that are planning new investments. Individuals may also decide not to work extra hours because they believe that most of their extra-earning will be eaten up by the pay-as you earn tax system. The end result is that production will drop and the country and the people will suffer.
However, like everything else, a balance must be struck. The challenge facing the government is to find a balance where its financial needs are satisfactorily met without excessive borrowing which will increase the national debt, bankrupt the country and stifle economic growth. In order to improve the economy and ease the financial burden on the country, the government should privatise some state corporations; especially those which are a drain on the treasury.They include the National Communication Network (NCN) and the Chronicle newspaper. Not to mention GUYSUCO which should be a public/private venture, with the government retaining a majority share to ensure that the interest of the company and the country is preserved. But the mere mention of privatisation, especially the media outlets would automatically trigger considerable opposition from some in the government because they believe that having control of the media is important for them to communicate with the people.
In addition, it would be in the interest of the government to lower the national debt because the larger the debt, the more it would cost the taxpayers to service it. If the debt is not reduced, the government would be forced to cut back on the much needed resources to improve health care, education, social services and infrastructure. Privatisation and reducing the national debt would also provide the fiscal space the government would need to improve the economy, create jobs and provide a better life for all.
However, for this to happen, the government will have to develop better strategies to improve the economy, health care and education. It must also increase production in all sectors, create jobs, especially for youths and lower the food import bill. This should be done with the same zeal that the government has used to promote the jubilee celebrations.

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