Living with the IMF
July 30, 2004
Guyana is well and truly in the grips of the International Monetary Fund. Of course, like many developing countries, we have had to seek help from the IMF as we found the going rough to access funds for our development.
Unfortunately, the IMF prescription has been the same for just about every country. Many leaders have been heard to complain about the recipe - cut wages, retrench, curtail spending, divest. We have done all these things, sometimes with dire consequences.
When we first turned to the IMF, and that was under the previous administration, we retrenched many workers, particularly those who could ill-afford to be unemployed.
The message to them was that they could venture into the area of self-employment, but with precious little to fund any new operation, many simply moved to gain employment with other employers. They became security guards, domestic helpers and even sanitation workers.
Very few attempted to become vendors and farmers, which was what the government had hoped. They had moved away from the land a long time ago and in any case, they did not have the resources to reclaim some of the ancestral farmlands. Those who did found that marketing was a bit of a problem since the buyers sought to pay very little.
We continued with a depleted workforce, having been convinced that in the first instance, the public sector was over-staffed.
Years later, we were to do the same thing. This time, however, we received money to train those who were being retrenched. We even set up a special security guard service comprising those who had been sent packing from the public service.
We even began a process of divestment, beginning with the smaller corporations, among them the telephone system. Of course, the accusations that the telephone company was actually given away continue to be heard to this day. Some institutions such as the Mortgage Finance Bank and some of the commercial banks that were in government hands also ended up on the auction block.
The present administration had no option but to continue with the IMF programme. It divested such entities as Guyana Stores, the state-owned airline and the solitary state-owned bank among others.
But for all the efforts, precious little has changed. If one were to be honest, one would say that by adhering to the IMF prescription the country is going down the drain. We cannot undertake certain roadwork with the result that many streets and roads, barring the main thoroughfares, have been reduced to paths and even alleyways. Georgetown is full of these.
The talk about cutting expenditure, particularly public spending in the wages sector, has not gone down well. The workers in the public sector are calling for increased pay. Such has been the pressure on the government that it has repeatedly been forced to grant pay increases. However, the government ensured that the pay increases were a token since it caused certain regimes to come into force to erode the very increases.
More recently, the wider society has been clamouring about the absence of jobs, particularly for the young people who were leaving schools and the university. The society seems to have forgotten that for the past three years, the government has been enforcing a job freeze.
Senior positions, once vacated, remain unfilled. Many positions and designations simply went by the wayside. It would seem as if the IMF has condemned the working population to idleness, save for the periodic increases that are eroded as soon as the worker collects the extra money.
An eye-opener came with the disclosure that the IMF was questioning the construction of the World Cup stadium that is designed to bring in much needed money that would go a long way toward development.
The government has not denied the IMF call for a feasibility study but it has been quick to point out that the construction of the stadium will continue apace and alongside the feasibility study.
Our question is since the construction would go ahead, why worry with a feasibility study? Regardless of the outcome of the study, we are committed to the construction of the stadium.
But we must appease the IMF. And as we do, we have to always remember that we are now not the masters of our own destiny.