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Economy is slowly being ‘choked to death’ by Govt.’s policies – PPP
– Says IMF preliminary findings validate its position
The People’s Progressive Party (PPP) is of the impression that the government’s policies are slowly choking the economy to death.
In fact, it believes it is justified in making such a conclusion given the recent preliminary findings of the International Monetary Fund (IMF) which was in Guyana during March 6 to 17.
The PPP said that the preliminary findings of the IMF validate the positions that it has articulated for months, including the perception that the local economy is in trouble.
The IMF noted that Guyana’s Gross Domestic Product (GDP) growth was uneven, buoyed by the new gold mines, while the non-mining sector saw a contraction in growth.
In this regard, the Opposition Party said, “We have seen no plans by the Coalition government to stimulate growth; rather increased burdens on major sectors with a slew of tax measures and other policies that constrict their potential for growth.”
Furthermore, the PPP highlighted the fact that the IMF projects real economic growth of 3.5 per cent driven by an increase in public investment and a recovery in rice production.
In spite of this projection, the PPP said that the reality is that Guyanese are witnessing the continued deterioration of the rice sector’s performance. The Party said that two weeks ago one major rice operator, after 25 years, closed down his operations. In this regard, the PPP was referring to Alesie Rice Group.
Opposition Leader, Bharrat Jagdeo
The Party said, “We are also witnessing massive underperformance by the government, relative to public investment. The IMF itself noted that Guyana saw ‘lower than budgeted public investment’ in 2016, which was a point that was made by the Opposition during the Budget 2017 debates.”
It continued, “The IMF statement confirms that the Government slavishly followed the recommendations of CARTAC on extending the Value Added Tax (VAT) regime to crucial sectors, without regard to the social impact on Guyanese. The IMF noted that it welcomed the VAT ‘reform’ that was advanced.
Additionally, the PPP said, “the increased borrowing by the Coalition government has also been a major point of concern, particularly over the last few months – with government inking multiple multi-billion dollar loan agreements – as many as five in one week, as we have seen recently.”
Furthermore, the IMF said that the debt-to-GDP ratio is projected to reach 61 per cent of Gross Domestic Product by 2019 and has recommended fiscal adjustments. In this regard, the PPP blasted the government for the fact that it continues to bank on oil money. It was not pleased that the government informed the IMF that once oil production starts the debt to GDP ratio will decrease.
On the issue of the sugar sector, the PPP noted the IMF’s call for careful decisions to be made about the future of the industry. The Political opposition has said repeatedly that the decisions taken so far have been political, given the absence of any socio-economic study. The IMF has warned the government to be mindful of the large social impact and the need to protect those affected by the process of change in the industry.
“The Coalition government must face reality. The local economy is slowly being choked to death. Guyanese are witnessing policies that hurt businesses and increasing hardships on average people,” expressed the Party.
It added, “In the last year, there have been no major announcements regarding foreign direct investments in Guyana, nor any major job creation initiatives. The Coalition government must act.”
The PPP said that it will address the preliminary findings of the IMF report in greater detail at a later date.
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