What the numbers say ten years on
Stabroek News
October 5, 2002

Related Links: Articles on historical feature
Letters Menu Archival Menu

Once you discard the propaganda, the protests and the stubborn perceptions, how do you go about judging the performance of a government? Ultimately by results.

This could mean a crude measurement of indicators such as economic growth, low inflation and debt ratio to GDP. But the hard economic numbers can be deceptive given that so much of the economy is unregulated and some of it plain illegal.

Remittances which are probably around 25% of GDP have kept families out of dire poverty but have not contributed significantly to investment. In fact they have gone mostly to the importers of plastic goods and milk powder in what could be termed “trickle up” economics. Anecdotally the disparity between rich and poor is still stark. The UNDP Development Report 2002 estimated that in 1993 the richest 20% of the country enjoyed 42% of all consumption/income, while the bottom 20% had 6.3%. It is a pity a survey has not been done lately.

Georgetown Mayor Hamilton Green congratulating President Janet Jagan after her swearing in.

This Hawley Harris cartoon appeared on 18th january 1998.

An argument could be made that the PPP in its first years in office benefited from the tough reforms PNC leader Desmond Hoyte put in place as part of the Economic Recovery Programme. In fact Dr Clive Thomas in a review of the economy after two years of the PPP noted that despite the rhetoric, “the government has in every fundamental essential, toed the line of the ERP...”

During the eighties GDP had fallen by on average 3% per year. From 1991 to 1997 as foreign investment and market reforms kicked in GDP growth averaged an impressive 7%. But the drought of 1997, the elections disturbances and lower prices for commodity exports saw the economy contract by 1.7% in 1998. Since then lower commodity prices especially for rice and sugar have largely continued and this is affecting GUYSUCO’s profitability and production in the debt laden rice industry. With 2000 growth at 0.6% and only 1.3% for the first half of 2001, the economy is essentially stalled.

Many of the favourable and non-favourable economic indicators would have occurred regardless of who was in power. The PPP was fortunate in that during most of the 1990’s commodity prices were strong. GUYSUCO run by private management put in place by the PNC government has seen production increase threefold. Rice production has also increased sharply, along with gold mainly due to Omai Gold Mines Limited’s operations. (see chart) Only the bauxite industries in Berbice and Linden have failed to become viable with the opposition charging that the government has kept them going on a shoestring.

Meanwhile the fisheries sector has tripled output with revenues of $6.5B in 2000, providing valuable year round jobs.

Stewardship of the economy is better measured by low inflation rates, debt service ratios or fiscal deficits; in this regard the PPP has been largely successful. After the currency depreciation of 1989-1991 inflation was around 90%. But improved monetary policy management constrained aggregate demand and helped to arrest the exchange slide, allowing inflation to fall to an average of 4.1% in 1997. A spike as a result of the El Nino/La Nina phenomenon in 1998 and higher fuel prices saw inflation increase to 8.6% in 1999, but since then prices have remained largely stable. These are the measurements that please the IMF and World Bank although they are now looking at poverty reduction with more commitment than before.

External debt has been brought under control. In 1990 it was a crippling 74% of GDP and by 2000 16.2%. Much of this reduction came from multilateral agreements (HIPC) between financial institutions and debtor nations but the government has managed to largely convince the international community that its policies are sound. The Fiscal Deficit was also addressed by the ERP with the drastic restructuring of the state sector. But by 1993 it was still around 21% of GDP and by 1996 was down to a healthy 3%.

Since then the deficit has widened as a result of the economic difficulties and stood at 10.9% of GDP (before grants) in 2000.

Important too is spending in the social sector and the outcome of that spending in increased life expectancies, lower infant mortality, reduction in crime, more children enrolled in secondary and tertiary education etc. Other things are harder to quantify but are equally important such as personal safety and access to justice. It would be hard to find evidence to suggest these two have improved under the PPP.

That being said the murder rate declined in the nineties along with most other crimes.

In 1991 there were 217 reported murders/manslaughters. By 2000 this was down to 95.

However figures for this year look alarming.

Health spending in 1990 was 2.9% of GDP and in 2000 4.5%.

Hospitals are better equipped and this may have played a part in a decline in infant mortality (per 1000 births) from 34.9 in 1993 to a low of 22.9 in 1998.

Enrolment in education has increased. The primary age group ratio was 92.8% enrolled in 1997 and for secondary age children 74.9%. Public expenditure on education as a % of GDP was 1985-1987 8.5% and between 1995-1997 was 5%.

Much of this infrastructure work has been achieved with copious amounts of international assistance. The 2002 UNDP Human Development Report states that Official Development Assistance received in 1990 was US$108.3M or 42% of GDP. By 2000 this was up to US$142M and 15% of GDP. Add this to estimated remittances and close to half the economy is based on some form of overseas donation.

But perhaps the most telling indicator of the last ten years is emigration.

After all a society where citizens are largely content and see a future for themselves will not experience significant rates of emigration. In 1991 23,000 more passengers left Timehri than arrived.

In 1994 the amounts were equal for the first time since at least 1979. Sadly by 1999 the exodus was continuing at a rate of 12,000 a year and one can only assume given the violence of the last few years that emigration will accelerate.

In this respect the government has failed to convince its people that Guyana is a place worth living in.