Dear Editor,
Economics is an art form not a science, however there are a few rules. Governments that accept this premise are successful. I present a few options to assuage the cost-of-living increase in Guyana. These are not total solutions but will aid in lowering the cost of living. Remember we are no longer a Socialist, Marxist or Communist State. Those that think Guyana’s inflation is 3.4% annually may have imbibed our famous Demerara rum specialties or something else.
1. The Government should incentivize every working resident Guyanese. This should be done as an inducement for an increase in savings by each citizen going forward receiving $100 for every $250 saved in a bank account, perhaps to a matching max of $200k annually. Everyone must (have) open a bank account to get this remittance benefit. It enhances our savings rate versus spending rate. Trickle down economics does not work. No more walking around distributing cash grants. It also helps to eliminate the underground economy and corruption. Clearly some ground rules on withdrawals must be in place, I leave that to the actuaries.
2. Our currency should be reset to somewhere around $180 to the US dollar, this will knock imported inflation to the floor immediately. A mistaken belief is we have a floating currency, it is managed. It also lowers our costs of repaying foreign debt. This aids the banks because the saving rate will produce substantial deposits thereby making mortgages and government/business borrowing cheaper. Also, this will bring more banks into Guyana.
3. Our talented resources will not race to other countries in pursuit of wealth if we improvise the above, Nurses, Teachers, Doctors, etc. It is something we have overlooked, Antigua, Barbados, Trinidad, UK, USA, etc. Our currency is too weak! Our excuse has always been we want to attract foreign investment and prevent the Dutch disease. Not sure how meaningful that is today. I bought a whole pumpkin for $500 in 2020 today the same pumpkin is $1500.
4. We cannot raise interest rates to lower inflation (cost of living) which is the common elixir, we are a developing economy. However, when citizens feel wealthy or see an option of saving to gain wealth the rational expectation of increased wealth helps them make proper decisions to stay and save. None of this has any effect on Exxon since they pay us US$.
While building my home in Providence I always pondered why my Chinese contractors needed to go to Suriname every 2 weeks, there is leakage of currency in our economy. They never produced an invoice though work was well done. If countries smaller than ours can find Hamas and Hezbollah leaders, why can we not find mister Su?
Sincerely
Everton D. Morris
