Dear Editor,
I have noted Minister Manzoor Nadir’s letter titled ‘Greenidge is far removed from the realities in Guyana’ (SN, January 22) with great interest. A more apt title would have been an attempt at comparing the Guyana economy under the PNC (1964-1992) with that under the PPP (1992-2011).
The more you read through Mr Nadir’s comparisons – interest rates 30% v 11% today; double-digit inflation v 4.5%; over 70% poverty v 33%; over 20% unemployment v 10%; little or no foreign reserves v foreign reserves to pay for seven months of imports; little foreign investment v US$692M – the more you realize you are comparing the economies of two different eras.
The Burnham-Hoyte economy had collapsed totally and completely. US AID had closed its office in Georgetown. Barclays and the Royal Bank had handed over their demand deposits (customers’ money) and sold their building to the government for $1. The government had resorted to the wholesale printing of money. The Guyana dollar had turned to dust. From US$1= $4 (1980) to US$1=$115 (1992). Guyana had been insolvent during some years of the Hoyte government. No foreign institutions would give a dollar to Guyana. Everything had frozen up. Suitcase traders barely kept the economy alive.
Then something happened. President Hoyte had an ephiphany. From being a proponent of a state controlled economy he became a champion of free market economics. Hoyte signed the agreement with the Paris Club, thus making Guyana solvent again. And, Guyana’s economy became irrevocably free market. The cambio system was set up. Funds began to flow again. New life was breathed into the economy making it functional again. Suitcase traders became a thing of the past.
Had Cheddi Jagan ruled Guyana 1964-1992, the economy would have collapsed in just the same way as it did under Burnham-Hoyte. Command economies do not work.
When Cheddi Jagan was returned to power in 1992, he wisely did not overturn the changes Hoyte had put in place to lay the foundations for a free market economy. And, all President Jagdeo did was to preside over a functional free market economy. The world environment had changed dramatically. Most of Guyana’s accumulated US$2.1 billion external debt had been waived. SIMAP kicked in to help rebuild infrastructure. Guyana was able to borrow over $1 billion new loans from multinational lenders. Import-export trade flows increased 20-fold. All to the credit of the new managers who found themselves presiding over it.
What exactly did the new managers do to create the free market economy and make it thrive? Mr Nadir does not offer a clue.
Manzoor Nadir’s letter is a sort of political diatribe – cheap politics. It is at once ridiculous and meaningless to compare today’s economy with that of Burnham-Hoyte almost 20 years ago when all the rules and the economic environment were different. It is not my intention to absolve the PNC from blame for a wrecked economy, but to point out that the world environment had changed with the fall of the Berlin Wall, and many command economies became free market overnight.
Mr Nadir is burnishing his PR credentials for the Jagdeo regime, taking over from Drs Misir and Randy Persaud. A SN blogger urged him to stick to the job of Labour Minister and negotiate an end to labour-management disputes, rather than waste his time doing cheap politics. He must know, however, that President Jagdeo and Dr Ashni Singh are fake knights in shining armour. And, when evaluating the performance of today’s economy he should do so in light of all the hardships experienced each day by the 700,000 people who live in Guyana (16% killer VAT, difficulty of living on US$3-5 average daily wage, power blackouts, no potable drinking water in some areas) and not compare it with a collapsed and insolvent economy of 20 years ago.
Yours faithfully,
Mike Persaud
