By Rawle Lucas

IT IS disappointing when persons who should know better find it difficult to present an objective assessment of the performance of the Guyana economy. This comment is prompted by an article appearing in the Guyana Times of September 1, 2019 in which a writer with the email address of jbinsights@outlook.com took his knowledge of Economics and, without batting an eyelid, comfortably proceeded to tell the Guyanese public a false story about the economy under the Granger Administration. An online search of the publication revealed that the article was linked to Mr. Joel Bhagwandin. One must wonder, after reading the article, if it was designed to fit the false narrative that the opposition keeps peddling about the Guyana economy, and to refute the favourable view that international observers, including the IMF, have of the future prospects of the country. His attempt at distortion unwittingly ended up highlighting a favourable macroeconomic point for the government.

In the article entitled “Comparative Analysis of real GDP (at current basic prices) for the periods 2011-2014, 2015-2018” that appeared in the Guyana Times of September 1, 2019, Mr. Bhagwandin veered off the road of truth and into the ditch of mendacity. In trying to make a case about poor performance by the Granger Administration, the writer extracted the incorrect data on the economy from the Annual Report of the Bank of Guyana. Mr. Bhagwandin took GDP at basic prices (Table 10-I) for the comparative years (2011-2014 and 2015-2018) and described it as reflecting the real GDP of Guyana. That act of disingenuity discredited the work and actually cost the writer the case that he was trying to make. For a person of his high intellect, one could only presume that Mr. Bhagwandin purposely took “nominal” GDP and deliberately called it “real” GDP to lead people into believing that only three sectors of the economy grew from 2015 to 2018. Real GDP refers to the actual amount of goods and services produced in a country in a given year. It is presented in the Bank of Guyana Report in Table 10-II as GDP at 2006 prices or what is normally referred to as constant prices.

One wonders if the publishers turned a blind eye to the immorality of the story by publishing it with the hope of convincing Guyanese that the economy was doing badly. Publishing an article with such obvious inaccuracy and academic injudiciousness appear to serve specious purposes that would benefit the publishers and the PPP/C. By publishing the article, the publishers seemed content to let Guyanese believe that the Guyana economy had 14 sectors and not four as classified by international standards. The four sectors are (1) Agriculture, Forestry, Fishing and Hunting, (2) Manufacturing, (3) Mining and Quarrying and (4) Services. The largest sector of the economy is Services which accounts for 54 percent of real GDP and not Agriculture which only accounts for 16 percent of GDP. Mining and Quarrying account for 13 percent of the real GDP while Construction accounted for 12 percent and Manufacturing for six percent. The Granger Administration has separated out Construction and Electricity from Services to emphasize their importance to the economy.
In what looks like a further attempt to mislead, Bhagwandin then compares three sectors with individual industries of the Services sector. Had he used the correct table for real GDP, Mr. Bhagwandin would have seen, using his own point index, that every industry in the Guyana economy grew in 2018 in comparison to that of 2015, except sugar, rice and forestry (Table 10-II). He appears oblivious to the reality that during the comparative period 2011 to 2014, the output of bauxite, sugar and fishing declined under the PPP/C. Consequently, nothing exceptional happened between 2011 and 2014 that could allow the PPP/C to claim a superior economic performance over that of the Granger Administration. We know for a fact also that the Granger Administration outperformed the PPP/C during the period 2001-2004 when the leader of the opposition had control of the economy. The leader of the opposition was given the job in 1999 and then was elected in 2001. He had two years practice before being elected President and several years prior as Minister of Finance and yet the performance of the economy was atrocious under his leadership.
The four largest industries in Guyana are (1) the wholesale & retail trade, (2) construction, (3) transportation and storage and (4) gold, following in that order. There is no doubt that oil and gas would be top-ranking when it starts flowing. Together, the four industries account for 45 percent of real GDP. However, when the remaining six largest industries are added (ICT, “Other Crops”, Financial Services, Tourism and Other Services, Education, and “Other Manufacturing”), a total of 10 industries account for 75 percent of the country’s GDP. The economy is not dependent solely on gold, construction and the distributive trade as he seeks to insinuate. The economy’s growth and forward progress depend on the performance of a much wider industry base which is inclusive of pre-eminent private sector investments.

Further, Mr. Bhagwandin knows fully well that a slower increase in nominal GDP (price multiplied by output) appearing in Table 10-I of the Bank of Guyana Report means that, with output increasing (Table 10-II), prices had to be declining. The true story about the negative numbers contained in his table therefore is that inflation under the Granger administration is lower than it was under the PPP/C. Those negative variances that he compiled should have given him a clue and caused him some pause. As such, Mr. Bhagwandin’s conclusion about the health of the Guyana economy is way off from reality. In contrast to him, the IMF used the correct data to reach valid conclusions about the macroeconomic strength of the country, a truth that exposes the falsities being peddled by the opposition.

This writer is perplexed as to why the editor would encourage the publication of the Bhagwandin article with its blatant inaccuracies. The disinformation seems politically motivated and what bothers me most of all is that journalism seems to have joined in this campaign of disinformation and is failing in objectivity and in its education of the children of this country. My lamentation includes the hope that the Private Sector Commission (PSC), which seems to have tied itself closely to the PPP/C, is not part of this political and economic farce. The private sector needs accurate information to plan its investments. The promotion of accurate information is what it should be encouraging and eliciting. Otherwise, all investors, especially the small ones, would be hurt.