The Story within the Story…A tough year ahead

Apr 09, 2017 News

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By Leonard Gildarie

It is a foregone conclusion that 2017 will be one of the toughest years we have faced in the

longest while. Consumer spending has taken a major hit and the ripple effects are being felt in all spheres of the economy. The world economy, global turmoil, our neighbours’ woes, as well as the local political climate, have all played a role.
It is not likely to get any easier.
At our banks, loans and mortgages are taking a hit, with figures indicating that more persons are finding it difficult to meet their monthly commitments. As a matter of fact, according to reports, bad loans doubled last year.
I can speak first hand of the experiences of paying a mortgage. Then there is the mandatory fire insurance. Many of the families are finding it tough to even meet that.
Commercial banks are reportedly rescheduling mortgages and loans as home owners and businesses face difficulties.
My kids attend a public school and it is good. It is heartrending the things you see daily.
Many of the kids are from single-parent homes. Many of them have parents who have to rise early in the morning for work.
It is a scary sight, seeing a first grade student trudging several streets, maneuvering traffic madness, in the busy Diamond area to his or her school.
Many of them have no lunch, as they eat it by break time. My family has been forced to intervene on many an occasion for a little lunch. The tears in their eyes tell another story of how difficult things are.
I have to check, but I am told that the cookies and juice distribution is only going to the first and second grade students. And it is not happening every day. Many students depend on the cookies and juice to help them through. I will be finding out more about this.
Their parents – those fortunate to have two living together- leave for work early in the morning, and many of the children are left to fend for themselves till the evening.
Some of the families can barely make it with two eggs and two rolls- not an unusual sale at a corner shop, some of the kids even have corn curls for lunch because its just $40.
If you don’t believe me, try striking up a conversation with the shopkeeper and you will learn of some of the purchasing patterns. It will surprise you how hard families are finding it.
Quite a few parents are unable to find the time to monitor the children’s performance or even examine the books. Education, even in the public schools, has become expensive.
There are books, food, transportation, clothes, lessons, study materials, and if you are fortunate to own a PC and printer, the ink and paper will be an added expense. Let us not talk about internet. Not all homes have.
This is the sad situation in almost all the new housing schemes – I can speak quite authoritatively on what happens in Diamond/Golden Grove, East Bank Demerara and La Parfaite Harmony, West Bank Demerara.
I agree that our old formula of opening new lands without creating jobs in those areas cannot work anymore. Several large employers feeling the squeeze from a drop in sales have started to send home staffers. These include at least one hardware giant and a major city department store.
I personally know of one business which will be making the hard decision to send home two staffers who served almost two decades, this week, as even the payroll cannot be met.
Business has dropped tremendously. Hire purchase companies have been complaining of at least 35 percent drop in business. Two years on with the new administration, I am disappointed that housing, my favourite topic, has ground to a halt.
There has been an announcement of a $5B project to build condos, duplexes and apartment buildings. A few model homes are currently being built at Providence.
Finance Minister Winston Jordan, talking about plans to jumpstart the economy, said that emphasis will be placed on using local materials, including our own wood to help things along.
Whatever the reason – from a crackdown on the drugs trade and fuel smuggling to less foreign earnings last year – we have to buckle down and find solutions now.
Oil is not for another three years. News that the US has attacked strategic locations in Syria has sent oil prices moving upwards. That is a good thing for oil producers, but bad for countries like Guyana. We have to also contend with a 50 percent tax on every barrel of oil coming here.
With the drug trade, fuel smuggling, and contracts slow to get off the mark, money has not been circulating.
I was in Berbice last weekend and met a good friend of mine from Corriverton.
He has a large metal fabrication workshop. It has been closed for several months now. Workers have been sent home. ‘Nothing is happening,” he said, as he shook his head with a resigned expression.
Recently, Central Bank Governor, Dr. Gobind Ganga, disclosed that last year, Guyana’s export earnings fell short by US$30M. That is bad. Businesses are complaining of hardship in getting foreign exchange. It will be worse this year. Skeldon estate will not start grinding until the second crop. We are likely to do worse than the 188,000 tonnes we did last year.
We have quite a few banks, cambios and businesses which have made a killing from the prevailing foreign currency situation. Trust me, they are not helping.
So yes, the picture is a gloomy one from all angles. I can go on and on about the number of complaints I have been receiving. We can no longer bury our heads in the sand and say we don’t have a real situation on our hands.
The Opposition has been busy criticizing. I am sure that its leaders will claim to have all the solutions. The administration, on the other hand, will not have all the answers.
I believe that it is time for all the players – including those who are criticizing from both sides – to meet and talk. After all, as a country, we could reach the point where return will be difficult, regardless of our oil prospects.

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