OUR SLIDING DOLLAR AND ITS CONSEQUENCES

Sep 20, 2018 Editorial

One of the things that the Minister of Finance and the government seem to have overlooked since taking office is the impact of the country’s sliding dollar against the U.S dollar. The devaluation of the dollar should have been a major cause for concern, especially the poorer sections of society. Hard experience over the years has taught us that any precipitous slide in the dollar is an occasion for hardship and great pain. We know instinctively that a sliding dollar inevitably leads to an increase in the price of goods and services that are either imported or produced in the country.
Increase in the price of fuel and other imports is one of the biggest indicators of pain from a sliding dollar that has reverberated throughout the country with its resultant painful effects on the spending power of the nation. This is the economic reality of the sliding dollar which have deleterious effects on the poor, who are struggling to survive. Time and again, opposition politicians have always used the sliding dollar as an occasion to score political points against a sitting government. This is the mindset of both sides of the political divide in the country.
A lower dollar will lead to a higher exchange rate for Guyanese who travel to the U.S on vacation, visit relatives or conduct business. On the flip side, a lower dollar means a higher exchange rate for those receiving money from relatives and friends in the United States. But the government seems to ignore the real pain that comes to the poorest consumers and the fledgling middle class who are at the mercy of the sliding Guyana dollar and rising US dollar. Ignoring this reality and playing politics with the issue shows that our politicians have not taken the problem seriously. As the people’s problems magnify, their concerns about the sliding dollar are brushed aside due to the government’s inability to halt the slide. However, it is not so much the politicization of the issue that bothers people; it is the cataclysmic effect that it has upon their lives.

With a sliding dollar comes the inevitable increase in the price of staples, which the authority seemed to have turned a blind eye on.
The people are yet to be given a cogent explanation for the slide; glib explanations for a sliding dollar and rising gas and transportation costs will not suffice.

Guyana has a small, open economy that is not insulated from global market forces. However, economists have concurred that the slide in the dollar is usually a result of weak economic fundamentals such as a significant fall in foreign reserves, a substantial increase in inflation, a high fiscal deficit or a precipitous fall in production and a steep growth in the current account deficit—all of which Guyana is experiencing. The Government does not know how to handle what is taking place economically or what is promoting the slide, and what to do about it.

The nation is going through a very interesting but rough period at the moment.
As a nation, we are all in this together and we have to find solutions.

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