Latest update April 20th, 2024 12:59 AM
Jan 11, 2010 Letters
Dear Editor,
The Financial Times reported on January 4 that remittances that Mexican emigrants sent home to their families from the US dropped by 16 per cent year-on-year in 2009.
This led me to consider this important point and with a desire that it is given greater attention in the 2010 Guyanese Annual Budget. The Ministry of Finance in Guyana will have to seriously evaluate our likely remittance contraction and what strategies we can use to compensate for the remittance contraction of 2009 and the impending contraction in 2010.
In the Bank of Guyana (BOG) Half Year Report, the Balance of Payments listed Current Account transfers which are mainly driven by remittances as declining from US$145 million to US$120 million, a 17% decline when comparing the 2009 to the 2008 (January to June period). This correlates with the annual decline of remittance from Mexico and thus is another spanner in the validity of the 2% growth figure being postulated as Guyana growth rate.
We must acknowledge for planning purposes in 2010, a very realistic figure for the decline in remittance in 2009 should be 18%. In the 2008 BOG Annual Report, remittance was tagged at US$274 million and a sensitivity analysis of this number into 2009 at a contraction rate of 16%, 18% and 20% to reflect the most optimistic, most likely and most pessimistic position is revealed
If we follow through with the most likely outcome, Guyana should be reporting a US$50 million decline in remittances in 2009; almost the size of the F/X earned from the entire forest sector. That is G$10 billion less to help folks in need build houses and support their disposable income. This obviously has feed through and thus the 3%-6% salary increase was a knife in the back of the workers. These people are losing from all direction and thus a significant salary increase in 2010 is the only way to go to ease the pressure on the working class in Guyana.
A proper state analysis should be done by the Ministry of Human Services of the lifestyle changes in Guyana to assess the impact of the decline in the remittances; especially in areas like Berbice where there is a heavy connection with the Non Resident Guyanese Communities (not discounting other areas of Guyana with connection). This should then drive social programmes to help these people who have seen their income stream decline significantly.
Good bit of new I have read over the Christmas was Minister Nadir and his retraining programme seem to be making headway. Is mobile training being carried out in the rural communities, e.g. going to Black Bush Polder to help housewives in the preservation of food and other life skills and even more academic skills like basic Maths?
My caution, 2010 is not going to be better for remittances and we must plan for this and not be caught off guard if it does not improve. Remittances to Guyana in 2009 are expected to be exceeded only by the combined Mining & Forestry Sector which is expected to generate US$420 million in export earnings and is under threat and a result of greater regulations to comply with the REDD+ initiatives and LCDS. Not even king sugar and rice individually will generate more income than remittance for Guyana in 2009 and thus a strategy to entice NRG to save more in Guyana and remit more to Guyana must be devised by the Government.
The Government has rejected criticism it is not doing enough to stimulate growth. But the truth of the matter is not enough is being done to really make the private sector the true engine of growth so that more jobs can be regenerated. The 2010 budget must offer some concrete investment stimulus to the private sector to entice investments since the Government cannot sustainably drive the PSIP as the international fund flow dries up.
This explains the “no hold bar attitude” at accessing the Norwegian Funds but the PSIP should not be the primary strategy at growing the economy out of recession. It should be part of a menu of measures that critically involves the private sector.
Initiatives such as the direct facilitation of rice exports to Venezuela are commendable and more of these initiatives can be done. Why not facilitate an opportunity to export rum, coconuts, non-traditional agricultural produce, completed furnishing from our furniture manufacturers, and certified jewelry to Venezuela? The President of Guyana can lead an investment mission to Venezuela to pursue this agenda in 2010.
The time has arrived for us to take direct action and intensify our “thinking out of the box” mentality. Here in the UK, the Department for Trade on a monthly basis is taking business people all over the world to share ideas, arrange network connections between business people and on many occasions real deals are signed. Our internal market in Guyana is small and thus we must aggressively pursue geographically sensible locations to grow our trade. Some effort should be made to provide Governmental (both Jagdeo and Chavez’s Government) cash incentives to a small direct flight between Caracas and Georgetown. Maybe both governments can fund seats based on affordability (Guyana will fund one seat, while Venezuela can fund more based on their wealth situation) on a trail basis to make it feasible for the Venezuelan national airline to send one of its small carriers to Guyana once a week. The opportunity can be explored if a possible stop in San Feliz can be done where thousand of born Guyanese are now naturalized Venezuelans.
This scenario can be repeated for the Brazilian state of Roraima by encouraging a second flight with META with the associated support in seats. I have done the rough computation and these two initiatives are expected to cost the Government less than G$7 million for 2010 and will result in more Venezuelan, Brazilian and Guyanese business people interacting, making deals and contributing to Guyana’s economic diversification and growth.
What do you think?
Sasenarine Singh
Where is the BETTER MANAGEMENT/RENEGOTIATION OF THE OIL CONTRACTS you promised Jagdeo?
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