Structural Stagnation

Economic Corner by Dr. Peter R. Ramsaroop, MBA

– APNU/AFC Fails Economic Test
– No Growth Just Decline
– Puts Our Nation 3 Years Behind For Every Year Of Failure
– PPP Version 2.0 Must Be Adopted
There continues to be a lack of an Economic Vision for our nation. Analysing all the speeches and press coverage from the Government, one can see that there has been no indication on what are their economic plans. It is now over a month since the Budget was presented, and we have yet to see a formal short and/or long-run integrated framework on what the new initiatives are to move our economy along.
The Government has failed with policies and implementation of both the micro and macro economics. These are both interelated.

What happens in the economy as a whole is based on individual decisions, but individual decisions are made within an economic framework For example, whether a firm decides to expand capacity, it will depend on what the owners expect will happen. With the negative envrironment that APNU has created, most business owners have made the decision to maintain or cut investments.

This has caused our economy to become stagnant. Senior PPP/C MP, Irfaan Ali, referred to this as Stagflation. With the 200 tax increases, consumers are limiting their spending.

Where we should have been in 2017:
Looking at the manner in which our economy is managed and comparing it to the policies the PPP/C had advocated we are now almost 3 years behind where our structural infrastructure should have been. The short sighted stoppage of the Amaila Falls Hydro project as a Capital Investment (Long Run Plan) has been done with zero alternatives.

Currently, they are still analysing alternative energy scenarios postulating that they will build many Hydro Plants. By the time those are assesed, Amaila would have been completed in our original plans This is a prime example of their incompentency in strategic thinking and planning, leaving us way behind on alternative energy.- another structural stagnation. Cheaper energy leads to new industries and new jobs and creation of new wealth for the citizens.

Below is a summary of the PPP/C Version 2.0:
Note, under the Transformative Infrastructure, the key Structural Components that were necessary to move our nation along included, the Amaila Falls Hydro Project, the Georgetown ByPass Road, Airport Expansion, Expanding our Domestic Cargo Port, Building a Deep Water Harbour and Paving the Road to Lethem. We were already in the process of acessing a new Demerara Harbour Bridge.

Have you heard any of these projects being seriously talked about by APNU?

These should have been started in 2015 – three years behind.

We have seen APNU take the Demerara Bridge as one of their plans. It was not about new towns, but they should have been creating economic free zones to boost our trade.

Creation of new towns without plans; additional new tax burdens on our citizens.

I specifically left out the Specialty Hospital.

This was the most unconscionable plan that was stagnated and withdrawn by the APNU/AFC. Just imagine the government is encouraging the Diaspora to come back, the foreign investors to come in, yet they can’t provide the necessity of healthcare that requires a specialty focus. Most Diaspora individuals that can return with money are older and healthcare in Guyana scares them.

For those of us at home, as we get older, it becomes more frightening. Many do not have money to travel to the US or Trinidad for treatment. The PPP had already gotten the funding for this – just simply cruel to punish our citizens.
The overall summary plan above is very comprehensive. We even have full details on implementation. With all of this, the Government is still struggling to come up with any alternative of their own, resorting to disingenuously adopting some of ours and using them. Even with that, we are worried that there are no competent Ministers to implement.

Our nation is under structural stagnation – slow growth and rising unemployment. We are experiencing a rise in our exchange rates and rising prices in our every day goods, along with all the new taxes, parking meters and rising fuel prices. With the recent MOU signed to relook at the sugar industry, with an Auto Car Company, was , as I had mentioned in a recent interview, rather disturbing. This company appears to have no experience of looking at the sugar industry.

As quoted in Guyana Times from my interview I said: “how can Go-Invest sign such a MoU with a company to look at sugar production, make rum or ethanol, etc. in Guyana….The last time any Trinidadian company managed sugar was in 2007, when the industry was abolished and thousands were out of work.”

The APNU/AFC is planning on putting thousands of our own sugar workers out of work. There is danger brewing, as I said before.

Why are the PPP Version 2.0 2015-2020 plans critical?
An integrated approach of cheaper energy, creation of new industries such as the Deep Water Harbour, and the Transport Economic Initiative of the paving of the road to Brazil and the Bridge to Suriname, increases our ability to create products and get them to market with the right transportation routes. These lead to new jobs, higher paying jobs, growth of our nation, and money to support our families. There must be a comprehensive and integrated plan to move our nation forward.

The APNU/AFC continues to take us backwards. The u-turn of our economy to the 1980s continues.

Summary
The prospect of oil will not take us into the modern world, as we had proposed. There are many transformative infrastructural initiatives that must be implemented as per our plan.

We have to look at continued development of our nation. The APNU/AFC went ahead to dismantle our economic institutions without any form of restructuring or new initiatives.

If one studies the PPP Version 2.0 carefully, we see an integrated approach to managing our economy. Invest more in sugar and the diversification to ethanol, energy etc, build a Deep Water Harbour and Road to Brazil, adding cheaper energy with hydro would have propelled our manufacturing sectors and entice new industries to come in given the fact that oil is in our future. Now we have the potential of oil, but no structural improvement in order to create industries that will give us more jobs.

The PPP is about economic growth, continued development, jobs, more income, creation of wealth and above all, a safe environment.

There is Danger
It is incumbent on all of us to shape our future by being involved to avoid the continuation of the destruction of our economy by the APNU/AFC government.

We have to be strong, brave and vigilant as we work at regaining power for the benefit of all Guyanese.