Another bad year?

Editorial
Stabroek News
June 17, 1999


Will l999 be another bad year economically? On the plus side, sugar is set for a record year, rice production could be good though the European market is posing problems, and the privatisation of the Guyana Electricity Corporation and the state owned bauxite industry continue to be promising prospects. Apart from that, the economic picture is not encouraging.

The strike has hurt the government and many private businesses. Substantial revenue has been lost, ships have had to be turned back with their cargo, exports have not been shipped, some businesses have been closed temporarily and there has been laying off of staff. The cost to the economy has been heavy. Reports indicate that the government may have been borrowing to cover current expenditure.

The government must be deeply frustrated. Last year they were faced with the post-election political protests, this year there has been a long strike which will affect budget estimates. More than that, they have been under considerable constraints as a result of the conditions involved in the structural adjustment programme they inherited from the PNC government and continued and the debt relief recently negotiated under the Heavily Indebted Poor Countries (HIPC) Initiative. After negotiations last month between the government and the International Monetary Fund (IMF) the IMF announced in a Public Information Notice that its directors had "stressed the paramount importance of avoiding excessive increases in the wage bill of l999 and took note of the authorities' commitment to take any necessary additional measures to achieve the programme's fiscal objectives". It also welcomed the ongoing initiative "to further reduce the size of the civil service and to introduce a new remuneration structure for the skilled and professional staff".

The government is between a rock and a hard place. It has on the one side a badly underpaid, and overstaffed, civil service, which it inherited, and on the other the international financial institutions who are seeking to maintain an orthodox financial programme. But at the end of the day, there must be some room for manoeuvre. The IMF has seen these problems before and has shown an ability and a willingness to adapt. There are several precedents. for this. Perhaps the government and the unions can visit the IMF together to seek their approval for whatever deal or award is eventually made.

Inheriting a shattered economy was never going to be easy. Inevitably after a few years everyone forgets how it got that way. But that's how it goes in government and other managerial jobs, you take it as you find it and you have to do your best to fix it. The government can comfort itself with the fact that the pay increase is well merited. The priority at the end of the strike will be to get the economy moving again, hard as that may prove with all the backlogs and bottlenecks that will exist. And the government should also seek, despite all that has happened, to develop a better and more effective relationship with the unions.


A page from:
Guyana: Land of Six Peoples