Will the new communist-oriented policies work?

Jun 03, 2025 Letters

Dear Editor,

There have been numerous new policies put in place that go against free market principles and that are more aligned with communist economic theory. Collective ownership is being pursued and achieved via government ownership and centralised planning; and needs-based distribution is being facilitated using numerous government subsidies.

Before the rise of China, many questioned the effectiveness of communism and saw those who embraced it as opponents to capitalism. Guyana knows this story well and experienced a lack of democracy due to Dr. Jagan’s declaration of the PPP as a Marxist-Leninist Party in 1969 (Reference: Jagan.org). A choice that proved beneficial to the PNC, which was socialist and pursued nationalist policies during its initial terms in office. The view was that “socialism became more radicalised…and Burnham’s resurrection of radical socialism was inspired by the opportunity which the ideology afforded to gain near-total authoritarian charge of the society…” (Reference: Stanford.edu The Foreign Policy of Guyana 1970-1985).

With the discovery of oil and gas, the increase in resources has provided an opportunity for the PPP to embrace the use of government subsidies that increases the affordability of goods for the masses, but may lead to inefficiencies in the market due to the lack of market competition and the limitations placed on supply and demand by government intervention. Iran has tried gasoline subsidies for many years, but this has resulted in excessive consumption, gas smuggling and lower private sector investment in the sector. The government has started to use this policy, which has also been used to justify investments in the oil and gas sector that will not provide a profit. This has also led to poor central planning, poor project execution and financial losses due to project delays. We must be cautious not to restrict free market dynamics and allow our sectors to remain globally competitive.

The sugar sector is another important example of where socialist and communist economic policies have failed. From nationalisation to the extensive use of subsidies and protective tariffs, the sector has continually underperformed and competition has been artificially reduced. This has led to higher industry inefficiencies and poor central planning. The sector is now unable to effectively compete globally in markets where free market dynamics have improved the competitiveness of others. The rice sector and other agricultural sub sectors appear to be headed in a similar direction. It is important to note that the government is planning to play a significant role by directly influencing the approach taken by farmers in the development of their business.

So what is different between our country’s approach and the successful approach being taken by China? China’s communist policies allowed for high volume production (economies of scale) in key profitable markets. This is a current gap in our country’s economic development policy.

CRG suggests that we first identify where to play and focus on those few key profitable markets where we can gain a sustainable competitive advantage. The opening up of virgin land for agriculture provides an opportunity to quickly ramp up our production in organic farming. Something which many countries are unable to do as quickly.

China also secured key partners that provided long term access to strong demand for the profitable products that they decided to focus on. This is where we have another significant gap in our economic development policy. Securing space on local shelves for our goods is not a guarantee of purchase. Unless secured on consignment, it may also reduce the profitability of the grocery stores and limit the expansion and growth of the sector.

CRG suggests that it is more important for the government to be focused on leveraging the newly gained exposure on the global stage to open up markets for our farmers. Secure key international partnerships that leverage our focus on the coconut industry and other products where we can develop a sustainable competitive advantage (our rum production may be such an opportunity). This will secure the demand for our farmers’ products. This will ensure that our products are easily sold when produced. The local demand may be attractive, but it is not close to the demand generated by accessing markets in the U.S. and the EU. It is important that we make the decisions today that will enable us to be successful over the long term.

Best regards,

Mr. Jamil Changlee

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