The global financial crisis has hit many countries hard and indeed many are reeling from it resulting in workers being laid off, economic slow down and cuts in social benefits etc. The end result of this being greater hardships on the poor and working class.

According to Anup Shah, it has been brewing for a while, and showed its effects in the middle of 2007 and into 2008.

Stock markets around the world have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with economic stimulus packages to bail out their financial systems.

On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world. The problem could have been avoided, if ideologues supporting the current economics models weren’t so vocal, influential and inconsiderate of others’ viewpoints and concerns.

Jonathan Jarvis in his article “The Crisis of Credit Visualized”, notes that the subprime crisis came about in large part because of financial instruments such as securitisation where banks would pool their various loans into sellable assets, thus off-loading risky loans onto others. (For banks, millions can be made in money-earning loans, but they are tied up for decades. So they were turned into securities. The security buyer gets regular payments from all those mortgages; the banker off loads the risk. Securitisation was seen as perhaps the greatest financial innovation in the 20th century.)

However, because of sound management of the economies in some countries the effects of the financial crisis has not been so harsh, and actually they have been minimal.

In Guyana, anyone who is objective will concede that the government has done a good job in minimising the adverse effects on the working class and the poor because it has always been committed to the protection of that section of society, and it has been managing the macro-fundamentals of the economy well.

Nevertheless, the pessimists and those with political and other axes to grind have been on the rampage criticising and lashing out at this government most unfairly for not doing enough in the present situation and actually mismanaging the economy.

But what is the reality? Of course, the current situation is a difficult one, but there has not been any massive lay-offs of workers, prices have not skyrocketed and the economy is stable, unlike what is happening in many countries including the more economically powerful.

And therefore it was not surprising that the IMF has commended the government for policy initiatives which has resulted in the maintenance of macroeconomic stability, in spite of the global turmoil.

The report stated that the progress being made on the financial sector reforms and legislation to prevent money laundering and financing of terrorism was welcomed, as Government seeks to strengthen the financial sector.

In addition policy moves by government in 2008, were lauded by the IMF, including that of temporarily reducing the excise taxes on petroleum products as that limited the pass-through of higher international fuel prices to consumers and effectively diffused social pressures while helping to contain inflation.

They applauded the authorities for reinstating the excise taxes in recent months in light of the abatement in international oil prices, to protect the fiscal position.

Notably, when it is projected that many countries would have a downturn in economic growth, earlier this month, the World Economic Outlook, which presents the IMF’s analysis and projections of economic development, projected Guyana’s economy would grow by 2.604 percent in 2009 and by 3.448 percent in 2010.

Now this is not the pronouncement of President Jagdeo or Ministers of Government. This is what the IMF is saying and therefore those who have been blasting the Government for mismanaging the economy, of course without any facts or evidence to support their ridiculous and outrageous contentions, cannot claim that the facts outlined are concoctions of the Government as they are wont to do. But of course, they might now allege that the Government has bribed IMF officials to paint a good picture of Guyana! However, if they do, they will certainly become the laughing stock of the year because the facts are staring them in the face.

The IMF pronouncements should put the “doomsayers” to rest for a while, until maybe they come up another concocted potion.