Aug 24, 2016 News
By Sase Singh
A decade plus into the 21st century, the role of our manufacturing sector continues to deteriorate.
From a position of 11.2% of GDP under Hoyte, it expanded to 12.4% under Jagan, then declined to 9.8% under Jagdeo; 7.4% under Ramotar and it is now 6.2% under Granger.
The Guyana Manufacturing & Services Association (GMSA) held another luncheon, and the messages coming out from bona fide business people, remain brutally gloomy. But it is clear that very few in the ruling political directorate in 2016 are listening.
Every week we get another message from a Cabinet member that “the economy not in crisis”. However, anyone who is aware of the granular details in the manufacturing sector (like the agriculture sector) will know that on the policy front, we are disintegrating on this question of how to transform these vital sectors.
One only has to read the 2016 Half Year Report put out by the Ministry of Finance and you can see that key benchmarks that can aid in the sustained economic transformation process, are all under clear and present danger. The end result; a continuation of a predominance of poverty, unemployment and inequity, in all 10 regions.
FOREIGN DIRECT INVESTMENT
Foreign direct investment inflows fell in the first half of 2016 by 62% to US$29.2 million compared to the corresponding period in 2015. Why is FDI not surging in Guyana in 2016? The policy makers are telling us that the macroeconomic fundamental is in order, there is political stability, and the “economy is solid”. But yet foreign direct investments have rapidly declined in the first half of 2016.
Too many key business bosses have told me that they feel unwelcomed, to the point that they are preparing to invest in other countries like Suriname, Brazil, and Trinidad rather than Guyana. Only those who are ready to feed the financial kickback machinery in the public service at all levels have been prospering for over a decade now. So where is this commitment to breaking from the past with its associated financial skullduggery and “Ponzi” scheme deals?
WHERE IS THE MANUFACTURING SECTOR?
But how do we generate economic expansion? Exports, and of course consumption, are key ingredients. The working class continues to be starved due to unnecessary delays in the finalization of the wage package, and this economic docility is not helping at all. FITUG was totally in order to refer to this situation as “empty pockets and empty stomachs” because the Granger administration has done precious little to help the workers over the last 14 months.
Where is the good life? Combined with a decline in remittances from overseas, we have an economic “Molotov” cocktail on our hands in 2016. Inflows of remittances from overseas declined by some 23% from the first half of 2015 to US$95.7 million in the first half of 2016.
Those who were rich under the PPP remain rich under this Granger administration, and the overwhelming majority who were struggling under the PPP, continue to struggle today in 2016.
So what really has changed in Guyana for the people other than a greater occurrence of national parades and military maneuvers? But parades and military maneuvers will do very little for the manufacturing sector and by extension put bread on the dinner tables of the proletariats. National pride cannot feed our people; real policy action on the wages front, on the foreign investment front and on making Guyana as an attractive and easy location to invest, will deliver the bacon. But constructing this troika of progress seems to be beating the Economic Presidential Advisors.
BORROWING BY THE MANUFACTURING SECTOR
Credit to the manufacturing sector declined by 2.4% or G$733 million in the first six months of 2016. The fact remains that in 2016, our manufacturers are not borrowing enough, to invest more, so that we can make more taxable profits in Guyana, create more jobs for Guyanese and in the process contribute to the expansion of the economy. There is a tremendous amount of “investment fear” in Guyana today.
Just read the narrative coming out of SARA, SOCU, and GRA and you can detect heavy doses of illegitimate intimidations and fear mongering. However, when these organizations are called upon to back up these threats with real prosecutable cases, they put their tails between their legs and run for the hills.
Every day that goes by, you can detect that there is no concrete plan on this front. The agenda of collectively bluffing the nation has directly contributed to the commencement of a wait and see period in Guyana. This will only aid in the economic destruction of the nation.
I challenge those in charge to prosecute some people rather than continue their charade of making infantile excuses why SARU and SOCU cannot deliver on their mandate. I would be the first to celebrate their success, but I am fully aware these people are playing with the intelligence of the Guyanese people as they continue to fail on all fronts.
These people are a danger to Guyana’s progress and the Granger administration. We are struggling to mold the nation because their action is causing too many business people to apply pause on Guyana. If business people are not investing then the poor and the working class are being denied a fighting chance to craft and own their tomorrow. But today in 2016, SARU and SOCU incompetence rules the roost and thus value for money from these witch-hunting outfits should not be expected.
MADE IN GUYANA
Like Agriculture and Mining, the Manufacturing sector is critical to Guyana’s success, but too little attention is being paid to crafting and implementing public policy to catapult these sectors forward. While we are busy in pause mode developmentally, countries like Trinidad, Suriname, and Brazil continue to benefit from the wealth of Guyana, because business people are not going to wait until SARU, SOCU and the GRA wake up from their policy slumber. Every day Guyanese business people are making investment decisions, but they are borrowing and investing at an increasing level overseas to the detriment of the ordinary masses in Guyana.
Today, the “Made in Guyana” campaign lacks fire in its belly. Our investment environment lacks enhanced competitiveness, and too many manufacturers are being made to feel unwelcomed in Guyana. When you look at the performance of GO-Invest and the Ministry of Business, the bureaucracy is clearly not working for the nation, because I am yet to see the deliverables on the scaled projects like the next GT&T, as was done under the Hoyte Government.
Although we now have a totally independent Ministry of Business, its performance to date is nothing but appalling. After two jaunts to Toronto and New York, both of which I attended, we are yet to see the impact of the Diaspora investments on the economy. But more importantly, where is the impact of the non-Diaspora foreign direct investments?
When the Singapore investment team goes to New York, they are meeting early stage investors, the banks, the hedge funds, the finance managers from an employee retirement plan, the accredited investors, and the trust fund representatives.
We are clearly fishing in the wrong pond when we do not even have Black Rock Inc. in the room.
As more people around the world enter the consumer class, their demands are changing. Their need for raw sugar and raw rice is very low. What they really need is value added products. Unfortunately, our manufacturing sector is losing this battle, thanks to a dysfunctional GO-Invest.
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