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Economic recovery vs Economic transformation
Dear Editor,
One can easily argue that Guyana is not going through economic transformation but instead is experiencing a period of economic recovery with the addition of the oil and gas sector. Most of the expenditure over the last five years has been focused on fixing long lasting problems in infrastructure, education and housing that have taken root since we gained independence. It should also be noted that if our economy had kept pace with the world’s economic growth since gaining independence, our economy’s size would be in the lower double digits today vs. the paltry lower single digits we have experienced for decades due to wasteful spending, poor investments, and corruption.
Our economy’s recovery must be built on a foundation of strong fiscal management that ensures that the natural resource fund expands at a rate that outpaces national spending. It’s premature and accelerated depletion has resulted in the fund foregoing an annual rate of return that ranges from 13.4% to 14.4%. This would have been easily gained by investing in the American stock market. The result could have been a NRF equivalent to what our economy would have been if Guyana’s growth had kept pace with the world’s economic growth over that last 60 years. That’s an amount just short of $12 Billion USD. An amount that allows for the sustainable distribution & increase in cash grants for our citizens over 18 years of age, the “because we care” cash grants for school children and monthly payments to pensioners. Instead, government spending has ballooned beyond government tax revenue, and corruption has become widespread. We need a government that can do a much better job managing the finances of the nation. Thus, what is being termed economic transformation is nothing more than a squandered opportunity for robust economic recovery that can be sustained. What Comrade Ali outlined in his recent visit to the Baker Institute at Rice University does not add confidence that his vision for economic diversification and global leadership will be accomplished. China on the other hand has accelerated their adoption to renewable energy with the help of their economic growth and development strategy. Diversification of their economy has also been stellar. Unfortunately, Comrade Ali’s administration has yet to show that they can successfully diversify our economy to replace the growth gap that will be left after the hydrocarbons are consumed.
Instead, “transformation” and urgency are being used as an excuse to raid the nation’s coffers and to justify poor project selection and wasteful spending as seen in the gas to energy saga and the power ship fiasco. We must demand better of our fellow comrades, and a clear message must be sent at the upcoming local government elections that if they do not perform, they will be replaced!
Best regards,
Jamil Changlee
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