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History does not support this claim, since major economic indicators prior to 1992 show otherwise.
Carl Greenidge, who during the 1980s to early 1990s held the post of Minister of Finance, alluded to the fact that several economic indicators were in poor shape in his final budget presentation under the PNC era.
Far from the picture currently being painted, the People’s Progressive Party/Civic (PPPC) Government inherited a country with economic indicators that left little to be desired in 1992. The towering unemployment rate, huge public debt, out-of-control exchange rate, and extremely high inflation rate, to point out a few indicators are evidence of the economic doom prior to 1992.
In other words, when the PPP took office in 1992, the country was in economic chaos and most of the economic and social infrastructures were destroyed.
Director of the Government Information Agency (GINA), Dr. Prem Misir, in an article titled, “The debt burden: A forgotten legacy,” highlighted deficiencies in the economy prior to 1992.
He clearly pointed out that, “The PPP/C Government inherited a logistical nightmare in 1992. This Administration in 1992 had to grapple with numerous constraints. Guyana’s foreign debt was about US$2.1 billion; debt service payments amounted to 105 percent of current revenue; and the social sector received a mere 8 percent of revenue.”
Funds were scarcely available to achieve sustainable external debt levels, never mind sustainable development. In those dark days, Guyana was paying 94 percent of its total revenue earned to repay foreign debt incurred. This has now been reduced to less than half this sum.
The decline of the bauxite industry started in the 1970s during the Burnham era. In 1988, also under the PNC regime, inadequate foreign exchange for chemicals and low prices paid to rice farmers produced a crisis in the rice industry.
Rice production was 93,000 and 150,000 tonnes respectively in 1990 and 1991, as compared to 1999 when rice production reached an all time high of 365,000 tonnes, 291,000 tonnes in 2000, and 321,000 in 2001.
Upon its election to office, sugar was imported from Guatemala. In 1989, 167,000 tons of sugar was produced, with 129,000 tonnes in 1990. Sugar tonnage reached 321,000 in 1999, 273,000 in 2000, and 284,000 in 2001. These figures, comparatively, hardly show an economic boom prior to 1992.
Despite post-elections violence during the three last elections that saw PPP/C emerging victoriously and the periodic violent protests over the years, many orchestrated by the Opposition, Guyana experienced, although minimal, some sustainable growth and poverty reduction. In fact, Guyana was one of two countries in the Caribbean community (CARICOM) to enjoy a positive growth rate in 2001. Last year Guyana also recorded a positive growth rate. In 1991 the poverty rate was 86 percent, which was reduced to 35 percent in 1999.
The Gross Domestic Product (GDP) growth rates annually were 7.9%, 6.2%, 3.0%, and –0.8%, in 1996, 1997, 1999, and 2000, respectively.
Dr. Misir’s article also noted several indicators in the first half of 2002, which showed growth. These indicators include: real GDP increased by 2.9 percent, greater than the 1.3 percent increase for the same period in 2001.
The balance of payments deficit, taken as a whole, was reduced from US$19.3m to US$10.6m, due to a significant decrease in the current account deficit. The real growth rate of real GDP at the end of 2002 was 1.1. Today, therefore, it’s simplistic for critics to say that nothing much has been done. However, an objective analyst would seek to establish a baseline when making analogies, as any conclusion must be formed out of a premise.
Dr. Misir noted that, “attracting both domestic and foreign investments continues to be the norm of the PPP/C Government. But investments translated into revenues have a protracted lead-time in many cases. So while the effort exerted to attract investments is an ongoing process, the need to make debt payments and sustain an adequate social services sector requires funds not immediately available within the economy.” Hence, Guyana needs to seek debt relief.
Statistics from the Guyana Office for Investment (GO-Invest) indicated that the country attracted approximately 55 investments between 1997 and December 2000.
This includes developments in the investment arena include the establishment of 35 companies, expansion of 11 companies and the rehabilitation of nine others.
These investment projects distributed approximately about $38 billion countrywide at that time and the investment climate has recently seen some new ventures on the scene. (GOVERNMENT INFORMATION AGENCY GINA)