Restrictions on importations coming to protect foreign reserves

May 02, 2017 Letters

Dear Editor,
Guyana will have no choice but to restrict the importation of some goods to protect the foreign reserves as the local dollar slides to historic lows against the US dollar. Praised for its successful democratic transition of power in 2015, today Guyana struggles to progress the economy since then because of this resistance by the PNC-led government to reduce public waste at the top. There have been no cuts to the almost G$1 billion travel budget of the Coalition government.
Rather they increased taxation on the people to fund their lavish executive Cadillac lifestyle. All they are doing is pushing this economy right into the arms of the IMF. If this style of governance continues, Guyana will be going on its knees to the IMF to beg for their money once again thanks to President David Granger. In return, the IMF usually whips despotic economic managers into shape by demanding severe fiscal austerity and reforms and the pain will hit the poorest the hardest, especially the urban poor people who voted mainly for the Coalition in 2015. One only has to remember what happened to Guyana in the 1980’s under the then PNC government.
The biggest threat of this PNC-led government to the nation is their failure to make sensible strategic economic decisions. As a result of their total mismanagement of the economy under Minister Winston Jordan, we can now observe the output – the “septic water” of that style of management.
For the first time since 2009, the international reserves have fallen below US$600 million in December 2016 when the impact of the reduced sugar inflows hammered the Bank of Guyana stock of foreign currency. When we thought this was a one time trick, how wrong we were because since then the stock of net international reserves at the Bank of Guyana has remained below US$600 million for four months straight (December 2016 – March 2017).
To properly understand the gravity of the situation, the stock of foreign currency in the entire banking system (Bank of Guyana and all the commercial banks) at the end of April 2015 when the Coalition came to power was US$950 million; at the end of March 2017, it was US$101 million LESS. For ease of reference, all of these numbers were sourced from the official statistics of the Government of Guyana and can be found here -https://bankofguyana.org.gy/bog/images/research/Reports/abmar2017.pdf.
So while the President is busy travelling, the economic meltdown continues. There will be a further sharp decline of the currency if the Ministry of Finance does not competently manage this situation and all signs reveal the leadership in that Ministry is out to sea on the solutions. The cost of doing business in Guyana will continue to rise as the business community moves to import their supplies from abroad. The end result will be increased economic pressures on the poor as cost of living hitsthe roof, because no sensible business person bears the cost; it has to be passed on to the end user. Are we heading back to 1984?
Sase Singh

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News