Guyana poorly rated by Index of Economic Freedom

Stabroek News
August 16, 2001

Dear Editor,

I refer to the letter from Mr. Archer (4.8.200l) when he falsely claims that Guyana has "the freest economy in the Caribbean." In presenting any case, one needs facts on your side. Mr. Archer presented none. A free economy is not built on rhetoric and legislation only. It is built by the actions of the parties involved.

Guyana has been heading down a road paved with socialist intentions and socialist results. Today Guyana's President, the Moscow-trained Mr. Jagdeo is claiming that he has turned the economy around. He claims to have managed the economy better then the PNC, yet after 8 years in office, we have seen the continual implicit devaluation of our dollar, high inflation, large budget deficits, and negative growth as a result of poor economic policies which are causing business to fail all across our country, witness the press conference by the business sector a few weeks

ago. The President travels around the country giving lip service to free enterprise while the walls crumble around them.

Recently, the facts about Guyana's economic performance and orientations were compiled and released in the 2001 Edition of the Heritage Foundation/Wall Street Journal Index of Economic Freedom, an annual publication.

The entry for Guyana notes in the first sentence, "Since gaining its independence from the United Kingdom in 1966, Guyana has followed a mainly socialist economic course and today is among the world's poorest countries. ...Guyana's fiscal burden of government is worse, and inflation is rising. As a result, Guyana's overall [ranking] is worse this year" (p. 191 2001 Index of Economic Freedom). The Heritage Foundation/Wall Street Journal Index ranks 155 countries of the world using 50 variables, including:

+ trade policies,
+ tax burden of government,
+ government meddling in the economy,
+ inflation,
+ capital flow/flight,
+ banking and finances,
+ wages,
+ property rights,
+ regulation, and
+ black market.

This international study, read by leaders in Washington and by investors on Wall Street and worldwide, finds that Guyana under the PPP ranks in the ash heap of the Caribbean. Contrary to President Jagdeo and his apologists -

- We have a weaker GDP (Gross Domestic Product)

than Haiti.

- We have the worst economic growth of Caribbean countries ranked.

- When we compare the relative freedom of people to earn a return on investments, Guyana is ranked as Mostly Unfree. This is due to corruption, government meddling in the economy and socialist policies. Guyana's economy is ranked in comparison with Haiti, yet Haiti and Cuba have a higher GDP growth rate 3.1% and 1.2% as compared to our 1.5% negative growth.

Facts from 2001 Index of Economic Freedom

Country Rank GDP GDP Growth Category

Hong Kong 1 $143 billion 3% Free

Guyana 97 $700 million -1.5% Mostly Unfree
Trinidad and
Tobago 39 $5.9 billion 4.1% Mostly Free
Jamaica 56 $4 billion 0.1% Mostly Free
Haiti 137 $2.8 billion 3.1% Mostly Unfree
Republic 59 $14.8 billion 7.3% Mostly Free-

Cuba 152 N/A 1.2% Repressed
Barbados 35 $2.1 billion 4.4% Mostly Free
Bahamas 23 $3.9 billion 3% Mostly Free

Now on top of all this, to solidify Guyana's position as the place not to invest, Mr. Jagdeo now goes on to introduce legislation to alter a law after he discovered that he could not acquire the property of Toolsie Persaud under his terms. He just doesn't want to pay market value. Does the President understand what are the international implications of this action?

This is the same old PNC/PPP nationalization that ruined Guyana. Why did he lay an Investment Code, for international investors, which promises no compulsory acquisition of investments? In all international agreements where expropriation (nationalization) is allowed, provision would be made for adequate compensation reflecting market value and for disputes to be settled not by local courts but by international jurisdiction and arbitration. Are local investors to be discriminated against?

Quo Vadimus?

Yours faithfully,
Ravi Dev (MP)