Controlled approach to national development is needed

Jan 28, 2024 Letters

Dear Editor,

The range of average savings amongst the top ten countries with the highest savings rates is 44.9% to 64.3% (reference: Investopedia, 2021). Oil revenues and low taxes have been attributed as key enablers to allow for increased savings. Guyana currently has these enablers in place. These high savings rates allow households and countries to remain financially stable during difficult times.

Building up our National Resource Fund and our reserves will also help increase the buying power of our currency. The stable pegging of our $G to the $US presents an opportunity for the Government to shift the currency value from $200:$1 to $2:$1. The removal of the two zeros is an easy adjustment to make and will help improve the perception of the strength of the economy and clarify the inflation rate, but more importantly having a stronger savings rate and increased currency reserves will make imports less expensive for the construction boom underway.

The price of gold reached an all-time high in December 2023 (reference: Channel NewsAsia Singapore, 2024). Guyana’s gold industry is strong, but falling victim to porous Southern borders. As the value of the industry increases, it becomes more important to have a military base and stronger border patrol along our border with Brazil. Being able to add more gold reserves will also strengthen our currency’s buying power and allow our citizens to better overcome inflation pressures.

Government spending has become very ambitious in recent years and by reducing the number of major capital projects to an essential few will help reduce the overheating in the economy. Increasing the height in the Sea Walls, improving drainage systems, electric grid expansion, upgrading the water distribution system (including water treatment plants) and a new Demerara Bridge are major essential capital projects of significance. Being able to focus on these projects will improve the lives of Guyanese and help move the country forward towards being closer to 2nd world status, while also reducing the risk of overheating the economy. This will help prevent our Nation’s current capabilities from being overwhelmed by too many undertakings and our investments will be better secured from the harms of climate change.

In summary, a controlled approach to national development is one needed going forward. Our spending will align with what the Ministries can successfully achieve, and allow for an improved balance in our budget. A stronger currency is beneficial during this expansionary period that is being driven by imports in the construction and adjacent sectors. Our people will feel the impact of an improved standard of living as clean water, continuous electricity, no flooding, and the ability to cover expenses and save become the new norm. It is imperative that our government focuses on these essential national development achievements.

Best regards,

Mr. Jamil Changlee

Chairman

The Cooperative Republicans of Guyana

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