Dear Editor,
Our youth are complaining about the lack of job creation by new APNU+AFC government. Indeed all governments in developing states need to create the enabling environment for job creation and create some jobs. However, the bulk of the jobs have to be created by the private sector as they are indeed the ‘engine of growth’. Our youth should remember and understand that GuySuCo exemplifies the view that the government should not create jobs and subsidize failed business enterprises. Clearly, GuySuCo with a $77 billion debt, a need for another $45 billion to modernize its equipment and a cost structure that is twice the price of the market, is hopefully not what our youth are demanding of this new government.
Incidentally, GuySuco has received over $100 billion from the government over the last 5 years and $32 billion over the last 22 months with another $ 9 billion by year end. I hope that our youth also appreciate that this may explain why the University of Guyana did not receive the $5 billion it requested, but received just over $3 billion, and why there is little money for youth job creation, or why several taxes are now being imposed, leading to protests.
Indeed, although this will not comfort many of our young who need jobs, it should be known the APNU+AFC government inherited a corrupt economy. While this made the economy seem to be more robust, it was illicit funds that helped to generate the appearance of progress. The APNU+AFC government also inherited a huge underground economy. Remittances are also down from what they once were because of the situation in the USA. Construction is down along with other services because of the drop in global gold prices. Sugar is broke. Rice is also in trouble because again our cost structure is too high to be competitive and rice is owned 100% by the private sector.
The government is partly to blame for the blame it is receiving. Guyanese have all been told, over and over again, and by the private sector itself, that the private sector is the engine of growth, which implies that the private sector is the main source of job creation. But what is the record of both the government and the private sector in job creation over the last 25 years?
In July 1996, over 20 years ago, the Guyana 21 Plan was proposed by Stanley Ming, Khads Khan and myself, as a very viable blueprint for Guyana’s sustainable economic development. A road to Brazil, a deep water harbour and a Free Enterprise Zone were among 16 projects presented to the then PPP government.
Dr Cheddi Jagan liked the plan, but it got nowhere because Ming and I were co-founders of the Reform Group and Khads Khan was a member of the PNC. A few years later and after Cheddi Jagan’s death during the early days of the presidency of Bharrat Jagdeo, a detailed Guyana 21 Plan was presented and discussed in the newspapers. This plan indicated 100, 000 jobs would be created if implemented. The plan included 3 new communities along the road to Brazil that were necessary to sustain economic activity along the road, and included job creation for customs and law enforcement offices; restaurants; gas stations; banks; schools; farms along the newly opened agricultural lands adjacent to the road; a hospital with doctors, nurses and other staff; mechanics; transportation suppliers; construction workers, etc. Then President Jagdeo immediately in the newspapers claimed this plan was a dream, and indicated he himself had a plan to create many jobs. Of course, he was playing to his constituency, and as all can see, this was pure politics as very few jobs were created by him and his government. Of course, the Guyana 21 Plan was deemed to be “voodoo economics” by Dr Luncheon, the Head of the Presidential Secretariat.
If the Guyana 21 Plan had been implemented not only would those jobs have been created but the Guyana-Venezuela controversy would also have been given a different diplomatic and international context since because the road to Brazil would have passed through that same landmass Venezuela wrongfully claims, and of course Brazil has always supported Guyana’s sovereignty over this land.
Our young people should know that the last PPP/C government did not create many jobs over the 23 years of their rule. Yet, this new APNU+AFC government is being blamed for not creating jobs over its 23-month existence.
According to the World Bank, Guyana is the country with the highest migration level of tertiary graduates. There were no jobs for them. Yet, the PPP/C government was not blamed. Of course, jobs were created in the private sector. Guyana Goldfields (800-1000 jobs); Giftland Mall; Princess Hotel, and several hotels and tourism services in the hospitality industry. In addition, high gold prices resulted in many small miners, many off the books, and unknown to the GRA, also being employed. The aircraft industry also flourished because of high gold prices.
Many of the investors under the PPP/C promised jobs but delivered few. Baishanlin promised 10,000 jobs. The Marriott was built by 300 Chinese nationals. Vaitarna Holdings promised to create several hundred jobs for the large acreage of lands they were given. Amaila Falls promised jobs but the plan was to bring 2000 Chinese workers as the US$500 million loan was from the China Development Bank.
So, under the PPPC, there was growth, driven partly by an illegal economy. Some of the construction in Georgetown and elsewhere in Guyana, reflected not job creating growth, but illicit funds being legitimised through money laundering.
Now, back to the private sector: In its current form, because of ownership structures ‒ monopolistic, duopolistic and cartel ‒ the private sector comprises many non-competitive firms that are resellers of foreign imports. They manufacture very little. There is an absolutely no innovation. Expensive and unreliable energy only accounts for part of the failure to innovate by the private sector. Additionally, the private sector lived of the largesse of the Government of Guyana.
If one were to truly investigate some parts of the private sector one would see that their profits are obtained from the Guyana Government through gold, land and other concessions; government contracts to build roads; schools and other ministry purchases. Indeed, 70% of the annual Guyana budget is spent through government procurement. In essence, some sections of the private sector are very dependent on the same government they are currently at war with through manipulations of foreign currency, etc. Moreso, the procurement under Mr Jagdeo was political. Today, the country has changed and the new government is being asked to do what the previous government did not do. This is not a bad development.
But our young people need to also appreciate several facts. First, the drug, gold smuggling and other illicit activities are being squeezed because the US Drug Enforcement Agency (DEA) is in Guyana. SOCU is for the first time pursuing money laundering activities under the AML/CFT Bill (note that the Bank of America has stopped being a correspondent bank because of money laundering activities). SARA will soon pursue stolen state assets. The Guyana Revenue Authority is clamping down on underbilling and tax evasion and tax avoidance. Fuel smuggling is being addressed.
Much of what is occurring in the Guyanese economy has been inherited from the PPP/C’s 23 years of rule. Young people are indeed “looking for a change”. This change begins with the re-establishment of the rule of law. Today, the same contractors that built bad roads because of corruption are still winning contracts because those denied contracts have been told they have no experience.
Oil will soon be here. The last thing our young people would want is a criminalized state. Our youths deserve better. Our nation deserves better. Our young people are rightly upset. But they need to understand the true facts, and not the PPP propaganda that this economy is dying.
From this base, the new government can build a strong inclusive resilient economy for all Guyanese. Our young people need to join in this campaign. They need to become more engaged in constitutional reform and in making the state a non-criminalized one.
Yours faithfully,
Eric M Phillips
