Magnificent management of economy To the Editor
Guyana Chronicle
February 27, 2002

THE PPP/C Government continues to manage our economy very well. The latest figures put out by the Ministry of Finance indicate that the economy performed above expectations for the year 2001.

The Guyana economy grew by 1.9 per cent last year. This might sound very modest but it cannot be looked at in isolation. Instead, it must be viewed against the backdrop of the performance of other economies in the world.

For the year 2001, the economies of Latin America and the Caribbean grew by only 0.7 per cent and that of the US by a mere 1 per cent. Barbados, one of the strongest economies in the Caribbean experienced a negative growth in excess of -2 per cent.

We read earlier in the week that the Japanese economy is in such dire straits that the country’s credit worthiness is now being downgraded to that of countries such as Argentina and Indonesia. Here we are talking about the second largest economy in the world which is in such deep crisis that it has slipped into recession.

In Europe the German economy, the largest in Europe, is still not out of its downward spiral while that of Russia is still in a big mess. The Indonesian economy collapsed about a year ago, leading to the fall of the Abdur Rehman Presidency. And I don’t think anyone needs any education about what is happening in Argentina right now. Less than a week ago, “the world’s best known economist,” professor Jeffrey Sachs warned that the leaders of Trinidad and Tobago need to “resolve the current political deadlock before the economic risks overwhelm the country.”

The point is that worldwide the economic crisis has indeed overwhelmed very many countries and these economies are now in deep trouble.

But here in Guyana the economy has performed remarkably well. Yet, there are those who still question the management of the economy by the government.

However, the good news does not end there. Inflation was a mere 2.6 per cent as against a projected target of 6 per cent. The Guyana dollar depreciated by only 2.6 per cent against the US dollar for the entire year. Gross international reserves now stand at 4.4 months of exports which is again better than projections at the start of the year.

Moreover, continuous efforts at debt reduction have seen our external debt reduced to US$1.1B and these could be further reduced to US$800M this year. The Central Government’s fiscal position improved relative to last year while our total deficit decreased in 2001. At the same time Government’s spending in the public sector increased to $11.8B.

These are solid achievements and they cannot be lightly brushed aside. Indeed they have been achieved against four years of election violence organised and unleashed by the PNC and its allies in the Trades Union Congress. (Trinidad has suffered for only three months, yet the world famous economist is already warning about the consequences on the economy). The PPP/C Government had to fork out $150M as compensation for election related violence. In addition we suffered from the combined effects of the El Nino and La Nina weather phenomena with droughts and floods ravaging the country. Another $15M had to be found to compensate farmers in Cane Grove.

At the same time prices for our major exports have sunk to record low levels while the international economic situation remains very depressed. Markets for our main export commodities are increasingly difficult to access and international finance is being channelled into other sectors as the crisis deepens.

And on top of all this is the after effect of September 11, which has thrown the world economic scene into total disarray. How can anyone argue that the Guyana Government has not managed our economy properly? In fact we should be commending the Government on its magnificent performance instead of criticising it.

The Government must know, however, that its work is being admired in almost all quarters and it should not be bothered about the rumblings of a disgruntled few who seem to have their own axes to grind.
John Knights