A slowdown has been gripping the Guyanese economy affecting lives everywhere. In traveling around Guyana, observing empirically and talking with shoppers and business people, the anecdotal evidence is overwhelming that the economy has been slowing requiring urgent state intervention. Shopkeepers and other business owners (producers) complain their economic activities and revenues have been down around forty percent over the last six months. This affects GDP growth, employment, and cash flow.
Demand across all sectors of the economy is down. Consumption is down from basic to luxury items. Consumption demand across markets, urban and rural, corporations and individuals, have been flat if not declining. People are not making the kind of purchases as before. Even official data shows economic slowdown with the GDP expected to decline this year as it did over the last three years.
People don’t have much spare money to spend and as such demand is not keeping pace with production of goods and service. Importation and exports of goods are also affected. Manufacturers are not producing as robustly as they once did. The farm sector, indeed all sectors of the economy, seems to be in distress. While demand is down, prices have not decreased as one would expect in such a market condition. In fact, people complain about rising prices.
The economic slowdown may have to do with the political instability since December 21 when the government lost a no confidence motion in parliament. The government has been hanging in limbo for five months now not sure if it will remain in office for another year or is forced to call early elections. The quicker this matter is resolved, the better for the economy and the country.
The Caribbean Court of Justice should move quickly to render a decision on the issues before the court – settling the unilateral appointment of a GECOM Chair and the validity of the passage of the no confidence motion. If the court denies the appeals, then the government should take measures to boost demand – put more money in peoples’ pockets and encourage businesses to produce. If the court rules in favour of one or both appeals, the court should give clear directives (of what must be done) with timelines to be executed. So, for example, if the court were to rule that the GECOM Chair was not constitutionally appointed, then the new appointment should occur within a week. And if the no confidence motion is valid, then elections should be held within ninety days as stipulated in the constitution.
The government that emerges in new election must spare little time hitting the ground to create jobs, open up new industries or revive old ones, and boost spending all directed at creating demand to increase anemic growth.
Dr. Vishnu Bisram
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