Coalition didn’t live up to promise of rapid economic growth
Dear Editor, In a desperate attempt to deceive the electorate, leading up to the 2015 general election, the APNU+AFC coalition government propounded one of the most vacuous and misleading manifestos ever. Three years later, a meticulous factcheck reveals that the coalition government failed miserably to deliver on some of their key policies.
According to the 2015 APNU+AFC coalition manifesto, the following measures and policies were supposed to take effect once the party got into office, however, as outlined thereafter, the contrary was achieved. Over the next few days I wish to examine each measure so we can determine how faithful they have been to their promise.
1. Achieve rapid economic growth and development driven by the private sector in combination with the state and cooperatives.
Economic development has slowed significantly due to the underperformance of key, traditional sectors such as rice, sugar, and timber. Contemporary growth in GDP is attributed mainly to high production levels by the two major foreign mining companies.
With respect to the private sector, over the past three years, a slew of counterproductive policies have been unleashed by the government in their unstoppable attempt to boost domestic revenue. More than 200 tax measures have been levied on consumers, precipitating one of the sharpest declines in private consumption by more than $32B in 2017, when compared to 2014. Thus, from 2014 to 2017, aggregate private consumption contracted by more than $196 billion. When compared to 2014, actual private consumption in 2017 is $32 billion less. What this tells us is that, on average, from 2014-2017, each household in Guyana has cut back on spending by more than $1.1 million or $30,500 monthly. With respect to domestic credit, central government increased their share by more than 259% since taking up office, whilst the public sector got a mere 12% increase. The implication is a larger government, which is ostensibly seen in the huge increase in recurrent expenditure by more than $49B. Moreover, the government continues to slumber in the development of the local content policy, a critical piece of legislation that is instrumental in insulating our future oil economy from the “resource curse”.
Finally, based on the latest report of prudential ratios for financial sectors by the Bank of Guyana, the return on equity of the five major commercial banks, Republic Bank Limited, GBTI, Nova Scotia, Demerara Bank Limited, and Citizens Bank, contracted by 10%, 6.5%, 9%, 8.2% and 5.1%, respectively, during the first six months of 2018. Thus these are all signs of an emasculated financial sector, one that is rapidly deteriorating. Given our burgeoning deficit, and forecasted low growth, Guyana may soon have to pursue restrictive fiscal policies: slashing of the budgetary allocation to key sectors such as health, education and housing, etc. Yours faithfully, Mohamed Irfaan Ali PPP/C MP