No comfort in IMF analyses

Jun 20, 2019 Features / Columnists, Peeping Tom

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The PPPC and the PNCR have something in common that is fundamental to the way in which the economy is organized. They both practise neoliberal economic policies.
Neoliberal economies have certain features. They emphasize the free market system, free trade, an increased role for the private sector and a reduced role for Government.
Neoliberal economics ascribe a reduced role to the government, save and except regulation. Neoliberal economies are opposed to Government subsidies, Government handouts and place restraints on public sector wages and employment.
In an attempt to give neo-liberal economies a human face, Governments employ social safety nets such as providing milk powder to lactating mothers.
Guyana has been employing neo-liberal economic policies since 1989. State enterprises were privatized; goods, subsidies which kept prices low were removed and small producers and artisans were pushed out of business by the liberalization of trade which saw in influx of cheap imports.
There has been a lot of talk locally about Dutch disease and the resource curse. The Dutch disease refers to the decline of certain sectors when there is an increase in economic development. The fear is that when oil revenues begin to flow, that sectors such as agriculture and mining will become neglected.
The resource curse, on the other hand, refers instances in which an increase in valuable natural resources end up with undemocratic and unaccountable governments and high levels of poverty.
Those who understand the effects of the resource curse have been warning Guyanese about the dangers of dependence on oil. But there is bigger danger which Guyanese have had for the past 30 years and which is more pernicious than the resource curse or Dutch disease. It is called neoliberal economics.
This country has had 30 years of neoliberal economics and what has resulted is that while incomes have increased the gap between the rich and poor has widened. The wealth of country has become concentrated in the hands of the few.
Whether it is APNU+AFC or the PPPC the result in the same: those with wealth are doing much better than the poor. The gap is getting wider, the poor man is still struggling and public sector workers after 30 years and with oil on the horizon still cannot enjoy a living wage.
The APNU+AFC has not deviated from the neo-liberal economics. And the same people who used to make money under the PPPC are making more money under the APNU+AFC. They have simply swapped alliances but even if they did not, the result would have been the same because the neoliberal system is of such that it allows those who have to have more and those who do not have to still not have.
There was a time when both the PPPC and the PNC were highly critical of the International Monetary Fund. Burnham in 1984 described IMF prescriptions as being a recipe for riot. Jagan and the PPPC saw the IMF and World Bank and spin twins of the western imperialism. Yet the parties these men founded ended up pursuing the same neoliberal policies which the IMF champions.
The IMF is the kingmaker of neoliberalism. The IMF imposes the bitter economic medicine. The IMF polices are reviled around the developing world.
When governments, whether PPPC or PNCR, have to turn to IMF analysis in order to boost their credibility ratings you know that the economy is not doing too well and there is need for some window dressing. Only neoliberals take seriously what the IMF says
The IMF praises the government for growth, the public should ask about its effect on the standard of living. When the IMF says that the public sector deficit is reduced, the public should ask whether this came at the price of removing subsidies.
When they say that public finances improved, the public should ask whether this resulted in increased taxes.
When the IMF says that the medium-term prospects are favourable, the public should ask which segment of the population will benefit from the short-term windfall from oil. When the IMF expressed concern about the absence of ring-fencing, the public should know that the country has already been shafted by the oil companies.
When the IMF says that the financial sector remains stable, the public should ask what about non-performing loans within the commercial banking sector.
The IMF is not the bearer of good news. Its analysis is biased in favour of neoliberal economic policies, the same policies which have impoverished millions and wiped out small producers and placed small farmers at the mercy of competition from large countries and multinational corporations.
No one should, least of all Guyanese, should find any pleasure is using the IMF analysis as a basis for celebration. They should be worried that with oil around the corner, neoliberal policies will see the bulk of the oil revenues benefitting the rich more than the poor, as has been the case for 30 years in Guyana under neoliberalism.

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