It would be negligent of me to let another example of poor public policy under the Granger administration pass by without offering my remarks. The Guyana Chronicle, on February 2, 2017, reported that Finance Minister Winston Jordan informed the Cabinet about the “disequilibrium (imbalance) in the foreign exchange market” and offered as a policy response, more regulations and guidelines to ensure that “exporters repatriate their export earnings to the banking system”.
Knowing that such badly designed exchange control policy in the past was one of the main reasons that contributed to Guyana’s state of un-credit worthiness in the international community under the Burnham regime, one wonders, why are we back here?
Minister Jordan claimed he was cutting teeth in the Finance Ministry in those dark days of the early 1980’s and thus he, more than any, ought to have been aware of the foolhardiness of that strategy then and now. If this is his policy response, I am shocked because he clearly wasted his years in the Finance Ministry. His action today in the face of widespread rejection of these measures from the business community will only guarantee a path to certain economic meltdown over the next two to three years, which will then lead to social and economic implosion that even the promised oil money in 2022 cannot help. Has he learnt nothing from Desmond Hoyte, the intellectual architect who turned around Guyana’s economy?
The Private Sector issued a firm statement which “strongly condemns this move by the Government”. In the words of the PSC, this move by the Granger administration “would have the certain effect of accelerating the capital flight which has already begun with the erosion of confidence in the economy.”
There are two phrases in that PSC statement that send shivers down my spine – acceleration of capital flight and erosion of confidence.
Knowing the information put out by the private sector is one grounded in economic truth and it corroborates what I have already put out in my Straight Up Column of Friday, February 3, 2017, in the Guyana Times on the state of the investment portfolio, I am now calling on President Granger, as Head of State, to seek alternative advice on this issue. This recommended policy action exposes a situation where there is a heavy dose of policy paralysis in the Office of the Finance Ministry. I am absolutely sure even the President’s son-in-law, a longstanding businessman, Minister Dominic Gaskin has a better grasp of this situation.
What is required is policy actions to drive the economic reforms needed to bring back confidence in the economy and stem the capital flight that is now well advanced. Bullyism and regulations to control are not the answer; understanding the real problem is the first step.
Hard-nosed non-political answers to these questions will go a far way in helping the President. Why has the private sector lost confidence in the Granger administration? Why is there a shortage of foreign currency today, compared to May 2015 when there was not? How to rebuild the private sector’s confidence in the economy? There is so much more to share, but out of respect for the newspapers and their space constraint, I have to hold fire on this matter. The ball now is President Granger’s court.
Bullyism and regulations to control are not the answer