PNC predicts dismal year for economy

Stabroek News
March 19, 1998

The 1998 Budget will contain some harsh measures as a consequence of the government's mismanagement of the economy, according to Lance Carberry.

These would include, he told reporters at a press conference hosted by the People's National Congress at Congress Place yesterday "tight control over public expenditure; the possibility of a public sector wage freeze (in a situation where) wages are already abysmally low and depressed; and the possibility of higher taxes to try to make up the fiscal gap."

Carberry was a candidate at the December 15, elections and will be a PNC parliamentarian if and when that party takes up its seats in the National Assembly. He claims too that because of the poor performance of the economy, Guyana ran the risk of disqualifying itself from benefitting from the resources available under the Highly Indebted Poor Countries (HIPC) Initiative.

Speaking with reporters at a press conference yesterday at the PNC's Congress Place headquarters, Carberry predicted that "the prospects for 1998 were very dismal."

"I think most people will tell that 1998 is going to be a very difficult year, Carberry said, adding that there were already high levels of retrenchment and with the business failures that were taking place, "that one did not need to paint a dismal picture - the reality is there."

He pointed out that last year's production of in the major areas did not achieve their targets claiming that at 276 349 tonnes rice production was 11 201 tonnes below targetted production; rice at 340 699 tonnes was 9 301 tonnes below production; and forestry products at 565 00 cubic metres was 57 300 cubic metres below production.

Carberry claimed too that last year the fiscal gap was 10 per cent as against the 4 per cent to which it had been projected it would been reduced and that the gap was unlikely to shrink to the 2.5 per cent it had been predicted for this year.

In addition, Carberry said there was the continuing drift downwards in the value of the Guyana dollar and that "all of that was indicative of a lack of confidence and a lack of willingness on the part of businesses to expand their investment."

Dealing with the issue of the HIPC, Carberry said that the Initiative recognised the need for performance standards and that access to the US$26 million of resources annually from 199 would not automatic.

He pointed out that such access could be jeopardised by the poor performance of the economy and the lack of institutional capacity to conceptualise, implement and manage projects which qualify for funding under the initiative.

PNC leader Desmond Hoyte, who was also at the press conference, claimed that the Trinidad Guardian reportedly quoted President Janet Jagan as blaming the deterioration of the exchange rate as a consequence of the riots we had in this country.

"I don't know what riots she was talking about, but everybody knows that the exchange rate was declining progressively during the whole of 1997 and that was a consequence of economic woes of the economy," he asserted.

He said the statements of the various spokesmen of the government were indicative of a lack of political will to face reality, to face the problem of poor management of the economy.

Hoyte asserted that the steep decline in investor confidence demonstrated by the withdrawal of SaskPower was related to the Government's propaganda overseas including claims that the PNC was trying to overthrow the government did nothing to inspire confidence in the investment community overseas.

The PNC leader said that the problems of the economy would only be dealt with when the Government moved to address the political problem including dealing with the validity of the December 15, elections so that it could be put to rest and the country could make a start in continuing the development of the country.

Hoyte also said that he had no intention of responding to President Jagan's invitation to him to take up the post of Minority Leader. The PNC, he reiterated had no intention of dealing with the Parliament until the audit report and the electoral problem and been settled and could not see the difficulty the People's Progressive Party (PPP)/Civic accepting that fact.