Wednesday, February 08, 2006

Stella Says…Will the PPP ever acknowledge the reality of Guyana’s economic state?

by Stella Ramsaroop

(Originally published in the Kaieteur News on 07 Feb 2006)

Bisessar, I have one very important question to ask you. Do you and those in your office really and truly believe that Guyana is doing well economically – both on the local and international markets?

If so, then perhaps a field trip is in order for the entire party to get out and talk to the real people instead of just the “yes men” with whom you have surrounded yourselves. Certainly, you cannot judge the real economic state of the country based on your own living conditions, since many of you live in far better conditions than the average Guyanese.

I believe it is of utmost import to establish the fact that Guyana is not in fact flourishing economically, as the PPP would have us believe. In fact, figures released by the Bank of Guyana on foreign direct investment shows a significant decrease in 2003 and 2004 outside of the telecommunications sector. The figures show foreign direct investment in Guyana decreased from US$43.5 million in 2002 to US$26.1 million in 2003.

In 2004, the telecommunications sector accounted for US$25 million of the US$35 million invested in the country. Further, an investment climate report from the U.S. Embassy in April 2005 stated, “Political uncertainty and poor economic performance by the Guyanese economy since 1999 have eroded consumer and investor confidence.” Bisessar, please take note of the year mentioned in that quote, which means this is an investment climate created by the PPP – therefore, the blame game will not suffice as an excuse.

Further, in a recent country profile from December 2005, the BBC stated, “…political instability, inter-ethnic tension and economic mismanagement have left [Guyana] among the world's poorest countries, with an infrastructure that is barely able to support its population.” Okeydoke, Bisessar, having given a better representation of Guyana’s true economic veracity, I now feel we can effectively continue this discussion within the reality of the economic situation.

As such, I completely acknowledged the flaws of capitalism. There are at least as many as can be found in socialism and communism. As Freddie was so astute in pointing out in a recent column, all philosophies have failed the poor. Indeed, I believe it is easy to be a capitalist when you have money and it is easy to be a socialist when you do not, but equity probably lies somewhere in the middle (or perhaps with neither).

However, at least I am trying to be innovative and come up with a system that might actually work for Guyana instead of nailing myself down to one method that is a proven failure for the nation. It’s called progressive thinking, Bisessar. You and your cronies should give it a try sometime – that is if you can get permission from on high to have an independent thought every once in a while.

For example, how is Guyana ever going to take advantage, even to a small degree, of any reduction on tariffs to developed countries from developing countries if it has nothing (or very little) to be marketed? Yet still, when the call goes out for a diversified economy, the messenger is all but dismissed as a brainwashed imperialist and the nation is once again robbed of yet another opportunity to shed its colonial mentality and move into the 21st century.

Since you questioned as to how one expects to retrieve the money from a capitalist once he/she has brought in the spoils, please allow me to explain how a capitalist market works. You are right, those bringing in the big profits do not freely want to hand over their money to help the less fortunate, which is why taxes are imposed to collect the money.

As I have already stated, that amount is as much as one third of the total income for those who fall into the highest income brackets. This money then goes to the government for reinvestment into the nation. In the US, above and beyond these federal taxes, there are state and local taxes, as well as consumer taxes. If a person does not pay their income taxes they are fined and even jailed. Therefore, those who make the most also pay the most.

True, there are still many who are poor, however, many of the poor also get some form of federal aid called welfare (which is paid for by those in the highest income brackets). This is the system by which many free market economies establish a healthy infrastructure, pay their law enforcement officials a decent wage, provide for the elderly, offer high quality education, etc.

As far as those in New Orleans, theirs is a sad story indeed. Much like Guyana during this year’s rainy season, their president knew ahead of time that under the right conditions their entire city would flood and did nothing about it. After the storm had come and gone, those poor people were also left to fend for themselves.

It was not until they pleaded for help on international television that Bush’s lethargic administration took the necessary steps to alleviate the suffering. The only difference was that these victims in New Orleans did not give Bush a parade for victimising them. Many of them were finally put up in hotel rooms for several months – again, paid for by those stinking capitalists (whether they liked it or not).

Further, you said Joseph E. Stiglitz (whom, by the way, was awarded the Nobel Prize in Economics, not the Nobel Peace Prize as you stated) “had serious questions with regards the free market” [sic]. It is fair to say Stiglitz may have a few concerns regarding the value of free trade markets to lesser-developed states, but I believe it would be disingenuous to suggest that this brilliant economist would encourage a communist approach to trade entrenched with tight government control - as you are alluding and which the PPP has long implemented.

In fact, Stiglitz devoted an entire book to the promotion of free and fair trade through the ongoing negotiations of the Doha Declaration, which focuses on creating multilateral trade that is mutually beneficial for all parties, including (and, in fact, specifically for) developing countries.

In his book, Fair Trade For All, Stiglitz cites trade liberalisation as the primary driving factor for the significant progress and economic growth enjoyed in Britain during the 19th century, in Meiji Japan during the early 20th century, and in North America, Australia and the East Asian “Tiger economies” (India and China) at various point during the second half of the 20th century.

There were varying factors that also contributed to the success of each of these economies, one of which was a solid foundation on which to build a healthy free market economy – an aspect unfortunately absent in most developing countries, including Guyana. However, such information should motivate the government to action that would position the nation on the cusps of joining the rest of these strong economies instead of advancing further isolation.

Would that a more equitable approach could be designed and successfully implemented - one that would not neglect the poor while making the rich richer. Clearly it is not capitalism alone, yet neither is it socialism alone. However, until that day, each country is responsible for hammering out its own development agenda to ensure the economic security of its people. Which is why I am encouraging this dialogue – to facilitate a forum of economic debate within the parameters of realism.

Guyana is in desperate need of a multi-faceted economic development agenda that reaches beyond the mere trade agreements and diversification I have mentioned in this column. It needs a government that will lay aside its political insecurities and narrow agenda of self-preservation to focus on the interests of the people for a change.

Email: Stellasays[at]

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