I offer comments on Mr. Craig Sylvester’s article (KN, 11-26-2015) advancing the issue ‘Export-led Growth is the Solution For Developing Economies Like Guyana.’ The export-led model has had a very specific purpose and is not a generalized economic development model or approach. It does not mobilize or develop all of the inputs into production, people and indigenous capital sources. In Guyana’s case, the model focused largely on Guyana’s non-renewable stocks of natural resources that are exportable without regard to internal development.
The model has its historical lineage in the debt and fiscal sustainability policies of the World-Bank and I.M.F. It was hoped that once countries achieved fiscal and balance of payments stabilization, their attention would be focused steadfastly on the Millennium Development Goals (MDG) adopted by countries and these lending institutions. The ‘Export-led’ growth model has thrived to benefit foreign companies in the forestry sector operating as enclaves. The forestry resources Guyana gave up did not result in material wealth in, say hydro electricity plants; only more debt in the long run.
This pie in the sky methodology has earned profits for multinationals and led Guyana largely down a path of plundering its relatively vast amounts of natural resources in all of its exhaustive economic sectors-gold, diamonds, forestry-without bringing Guyana’s development on par with its neighboring island economies, especially Barbados, Trinidad and Tobago, and St. Lucia, sustainably speaking, ready for economic growth and Guyana’s strategic economic development takeoff.
In its efforts to help create sustainable jobs and remove poverty Guyana was granted a clean slate in debt write-off packages launched some 10 years ago. It was hoped that Guyana would achieve internationally acceptable ‘Millennium Development Goals.’ Incidentally, the export-led growth model does not maximize profits. It maximizes sales and ignores costs, especially the costs of non-renewable resources (Thanks to Dr. Maurice Odle for teaching the Princeton sales maximization model at U.G., for which export-led growth model is an application). The export-led model was useful to deal with national debt issues. Countries were able to achieve domestic currency convertibility and repay their debts on schedule. Its history of speeding up the exploitation of exhaustive resources has left Guyana in its previous predicament, high exports, relatively high debt in 10 years, and lack of sustainable economic development, showing population declines, joblessness, low health standards, and broken links in its educational and industry pipelines. Much ground has to be covered when it comes to the Millennium Development Goals’ achievements. For example,
On the poverty front, Jagan’s dreams for a New Global Human Order, eradication of crime, poverty, unemployment especially among vulnerable youths and new graduates from our educational system have hardly inched up when compared with 13 years ago. Guyana is now witnessing the fruits of its past socio-economic policies.
Little use or affiliation was made of the Millennium Development Goal, “…to end Maternal and Child Mortality by 2030,” in a small country like Guyana. Similarly, “Financing the end of Poverty” which requires periodic assessments over several years, without data-adjustments in the base or current year requires a consistent approach to gathering the relevant data-indicators and reporting accurately.
A strategic plan may require some scaling and prioritization in order to set goals, choose and implement technology products, systems, and education training levels. Strict adherence to “results-based” financing for education and health may create the conditions for attracting foreign direct investments outside of the exhaustible natural resource sectors.
The benefits of taking an integrated approach to the education pipeline internally in Guyana has been recognized in a countries where America outsources its jobs, the Asian economies. For example, in a country like Bangladesh, “ … A girl with a 5th grade education is likely to marry at a later age, have fewer children, decrease her chances of being infected with HIV/AIDS, find employment later in life, seek medical care, vote in her community, and gain access to credit.” These appear to be the development levers that other countries are using so well. I wonder what expectations are there for the male and female youths of Guyana, in agriculture and industry, hotel services aside?
The old attempts to launch foreign direct investment campaigns in Guyana’s exhaustive resource sectors have not helped many of Guyana’s youths to consolidate and live better lives, owning and developing their farms and agri-businesses for over half a century. Instead, Guyana-led exports were its people, seeking opportunities offshore, fleeing Guyanese ‘malaise’ in their efforts to overcome a destiny of poverty, the wrath of politicians, and job-alienation or discrimination.
Some relevant ideas on using exports as a driver of economic development are to promote “private markets (that) drive economic growth, tapping initiatives and investment (domestic) to create productive jobs and raise incomes (World Bank website).” Guyana’s export-led economic growth model has left much to be desired. Companies promise and do not deliver under resource-depletion schemes, even with red carpet subsidies and a valid contract.
Ganga Persad Ramdas
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