Significant reduction in government spending during the first half of last year arising out of the prorogation of Parliament and the consequential failure of the PPP/C administration to present a budget for 2015 was, arguably, the primary factor accounting for the country’s likely lacklustre economic performance, George-town Chamber of Commerce and Industry (GCCI) President Lance Hinds has told Stabroek Business.
Asked in an interview earlier this week to assess the performance of the country’s economy in 2015 and more particularly the volume of commercial activity during the customarily high-spending Christmas period, Hinds said that his assessment would be “speculative at best,” since apart from the fact that the commercial sector was “simply not forthcoming” on the volume of seasonal trade this year, the fact that Guyana is a cash-based society continues to make it difficult to do accurate reporting on the extent of trading. “In other countries there are various mechanisms including what in some instances is a preponderance of credit that makes it easier to measure the extent of spending. Here in Guyana government spending is the only structured indicator of the overall spending in the economy. However, common sense would probably indicate that last year the economy did not perform as well as in previous years. Certainly it did not meet the hoped-for 3.4 per cent growth target.”
Meanwhile, both Hinds and Chamber First Vice President Vishnu Doerga say that the 2016 budget due later this month is likely to provide indicators as to how the country’s economy will perform this year. Hinds told Stabroek Business that the Chamber is anticipating that this year’s budget will focus on “job-creation on a large scale” though he argued that the technology-driven “openings” that are likely to come on stream may not be sufficient to respond adequately to the high unemployment rate particularly among young people. “What is clear is that an aggressive capital works programme, including infrastructural works like road construction must continue if we are to create jobs on a significant scale. We also need to see a budget that reflects planning for diversification into other areas that can grow the economy. We have no choice there,” Hinds says.
Both Hinds and Doerga say, however, that the country’s economic direction in the year ahead must reflect a sense of what is necessary to drive the country’s economy. Doerga told Stabroek Business that the focus must go beyond “emphasis on quantity” in any job-creation programme. “We need to create higher quality, better paying jobs. We need to provide our people with jobs that allow them to do much more than simply survive,” Doerga says.
Hinds, meanwhile, told Stabroek Business, that the job-creation component of economic vision would require careful planning as well as “more robust support for business from government.” Alluding to an issue on which he has pronounced frequently during his tenure as Chamber President Hinds said that the demands of the country’s economy now make it imperative that government focus more attention on ICT development including education and training and moving ahead with the drafting of ICT and the liberalization of the sector.
Meanwhile, as oil prices dipped below US$30 per barrel earlier this week the Chamber is calling for further strategic reductions in the price of fuel – including further lowering in the price of gasoline at the pump – targeting key sectors of the country’s economy.
Hinds, meanwhile, told Stabroek Business that while there had been some positive development in the small business sector in recent years including the creation of state-run infrastructure – the Small Business Council and the Small Business Bureau – to support small business development, it was important that emerging private enterprises did not continue “forever” to benefit from concessions afforded small businesses. “We are not here to maintain small businesses as small businesses forever. They must grow. They must make way for other emerging ventures that need support in their infant stages. Frankly, it would make no sense if we cannot have our small businesses graduating to the medium scale level. We need to put them out there to compete,” Hinds declared.
Hinds, meanwhile, told Stabroek Business that there is need for a more robust Private Sector Commission in which a broader cross-section of businessmen and women play an active role. He asserted that the sharing of knowledge and experiences amongst members who could “share actual experiences of being involved in business” was likely to contribute to the growth of the private sector as a whole.”
