Neglecting the productive sectors to focus on oil could result in jobless growth

Dear Editor,

Finance Minister Winston Jordan has finally admitted that the ‘interim’ status of the administration is impacting adversely on the investment climate in the country.

The failure to find suitable investors for the closed sugar estates, including the once flagship Skeldon Estate, is indicative of the hasty, short-sighted and ill-conceived manner in which the APNU+AFC government proceeded with the closure of grinding sugar estates and the consequential divestment deals which, from all indications, have now grounded to a halt.

The minister further indicated that the economy has recorded a positive growth rate of 4 per cent for the first half of this year. Among the sectors that underperformed were sugar, rice and fishing, all of which are labour intensive, providing not only a livelihood but employment opportunities for thousands of Guyanese.

The minister cannot blow hot and cold at the same time. On the one hand, he is claiming that there is economic growth which is touted to be among the ‘fastest in the world’, while on the other hand, he is blaming the political opposition for intimidating potential investors in respect to investment opportunities.

My own take on the matter is that the economy is operating at a sub-optimal level due to a flawed economic model in which the productive sectors such as agriculture, fishing and mining are being deemphasised in favour of fiscal and oilrelated economic activities, which could result in a situation where we could potentially have ‘growth without development’ or what is referred to in the literature as ‘jobless growth’.

While there can be no doubt that the economy would be given a significant lift with the inflow of oil revenues, the experiences of several oil producing nations have shown that unless oil revenues are buttressed by strong growth in the non-oil sectors, in particular the agricultural sector, we could very well find ourselves in a situation where the broad masses of people are economically worse off due to high levels of imported inflation, high levels of unemployment and the destruction of the indigenous agro-based economy.

Growth is a necessary but by no means a sufficient condition for economic and social progress. Other essential ingredients for progress must include good and accountable governance, adherence to constitutional rule and the rule of law, political stability and an investor-friendly environment.

The Private Sector Commission has voiced some serious concerns about the current political environment and its impact on business. Instead of dismissing these concerns, the administration is well advised to listen and take the necessary corrective action to address the concerns raised.

Yours faithfully,

Hydar Ally