Economy has ground to halt under PPP/C
April 6, 2004
The last five years have seen marginal and even negative growth rates so the government's projection of a GDP increase of 2.5% for 2004 is unrealistic, PNCR's shadow minister of finance, Winston Murray said yesterday.
Speaking at a forum that the party held to vent its views on the 2004 Budget, Murray said the PPP has failed to pursue serious and focused policies with commitment to attract private sector investment.
"It should come as no surprise, therefore, that in 2003, net domestic credit of the banking system fell by 8.1% to $25.2B; that credit to the private sector decreased by 17.2% or $10.1B, that loans and advances to the manufacturing sector declined by 14.5%, to the agricultural sector by 48.4% and to the rice-milling sub-sector by 42.6%. Total liquid assets to the commercial banks amounted to $40B or 7.2% more than the previous year," he said.
What is disheartening, he said, is the fact that the government is attempting to conceal its failure by touting the current economic condition as sound. "It is a fad in government circles to speak of the soundness of our macro-economic fundamentals such as inflation, monetary aggregates, reserves and exchange rate, but the government needs to be reminded that in a stagnated or contracting economy that is of little relevance," he said.
He said too that the failure to convince private capital, both local and foreign, that it is truly welcome on a level playing-field is the major bottleneck in both broadening the base of the economy as well as bringing about the needed strategic alliances for backward and forward linkages, Murray said. "There is a crisis of confidence in our government which frightens away private capital. The government must give up its insatiable appetite for control and leverage. It must also remove the red tape and bureaucracy that [stifle] the efforts to bring an investment on-stream," he said.