Dear Editor,
The Bank of Guyana and the Ministry of Finance would have had immediate access to the Economic Intelligence Unit (EIU) April 2010 Guyana Country Report. Since these reports are considered mandatory reading for policymakers across the world, it is a reasonable assumption that the Minister of Finance, Dr Ashni Singh and Rajendra Rampersaud of the Bank of Guyana would have read the report some time ago.
If they had concerns with its methodology or contents they kept these quiet. But suddenly, within days of the Stabroek News reporting on the report, the doors of hell are opened wide. Mr Rampersaud pronounces authoritatively on statistics in a letter in Stabroek News of June 28 (‘Empirical data do not support the growth contention by Economist Intelligence Unit’) and Dr Singh on June 26 through GINA abuses everyone about house, mouth and integrity.
For the sake of convenience and brevity, I will respond separately to Mr Rampersaud and Dr Singh.
First Mr Rampersaud:
1. In his haste to respond, he fails to distinguish between Stabroek Business and Business Page or the meaning of “one of only few.”
2. He completely ignores the fact that the EIU’s principal concern is the inexplicable growth in the fourth quarter after negative growth in the first three quarters, and that the report derived its questions from comparative data published by the Bank of Guyana where he works.
3. His claim that production data are difficult to manipulate shows a lack of understanding of assumptions made about the local consumption of rice, the massive under-declaration of gold, and transfer pricing in forestry and bauxite. By implication, however, he is admitting to ease of manipulation in the other sectors that account for an overwhelming share of GDP.
4. Mr Rampersaud fails to mention that the major elements and contributors to GDP derive from sectors that are easy to manipulate – wholesale and retail (13.5%), transportation and storage (7.5%), construction (9.7%) and other services (4.4%) which together account for 35.1% of 2009 GDP. Or that the public sector categories – Public Administration, Education, and Health and Social Services account for 15.2% of GDP.
5. He asserts that agriculture is a key component in real GDP growth. In fact Agriculture is a sub-sector in Agriculture, Forestry and Fishing which as a group contributed 20.9% of GDP at Constant Prices in 2009. If the numbers
are disaggregated, he will see that Agriculture contributed 15.0% to GDP, made up by sugar 4.7%, rice 2.7%, Livestock 2.7% and “Other crops” 4.9%. As a policy adviser, he may wish to consider whether the state gets an adequate return from the substantial sums it expends every year on these industries and tell us whether he believes that the Other Crops contribute almost twice as much to Agriculture as rice does.
6. If as he claims the Statistical Bureau is the “official agency charged with dissemination on authentic real sector data in Guyana,” Mr Rampersaud may offer his views on the propriety of the President advertising growth and inflation figures in his end-of-year broadcast, or the inaccessibility of the Stats Bureau to the press, or about the bureau publishing critical data, including those on inflation, only after it has received political clearance.
Yours faithfully,
Christopher Ram
