If global recession prolongs, Guyana could face consequences
PRESIDENT Bharrat Jagdeo, noting the global challenges faced, has expressed optimism about 2010 while emphasising that Government is managing its resources carefully.

The Head of State was speaking on Monday at the Guyana Defence Force (GDF) Camp Ayanganna headquarters in Georgetown, at the traditional ‘Soldiers Day’ and ‘Christmas Lunch’.

Addressing the ranks just after returning from the 15th Conference of Parties (COP15) of the United Nations Convention on Climate Change in Copenhagen, Denmark, he alluded to the global economic and financial situation during the year.

President Jagdeo said the world lost 30 trillion (US) dollars of value in one and a half years and the stock exchanges collapsed, with many currencies depreciating and house prices falling significantly.

He said about 20 million people worldwide lost their homes and another 50 million their jobs.

In the Caribbean region, President Jagdeo mentioned the collapse of CLICO and said the tourism industry is reeling from the impact of the global crisis.

He said, for example, Antigua and Barbuda cannot pay wages and salaries in the public sector and defaulted on its debt.

President Jagdeo said Jamaica has seen its currency depreciate significantly and the country had three of its four alumina plants, that contributed about 58 per cent of merchandise exports, shut down because of the crisis and fall in global demand.

He said, although he only gave two examples, almost every country in the region has some difficulty with meeting payments now, excepting, probably, Trinidad and Tobago, which has significant oil wealth.

“So, it has been a rough year for the world, a rough year for the region,” President Jagdeo remarked.

He said: “Here, too, in Guyana, we have seen some deviation from our original growth rate. But, fortunately, because of the accumulated work that we have done for a very long while, in getting rid of our debt, creating more fiscal space and, because of our creative approach to the taxation on fuel, we have not seen any major shrinkage in our revenue.”

CRASH
President Jagdeo reiterated that the economy has “managed to fairly stay afloat” and has not seen any crash in housing prices or people losing their homes.

“In fact, I have seen a situation where the New Building Society (NBS) now has reached its limit because it has lent so much out for mortgages and it can’t go beyond 66 per cent of its asset,” he stated.

President Jagdeo said the commercial banking sector was recently given tax free concessions on loans of up to $8M. “So they can lend to people at a very concessional rate because I want the housing construction to continue in the country.”

He said a few huge projects that are going to transform the country have moved forward.

“The financing deal for the hydro and the bridge across the Takutu River and what it entails with our relationship with Brazil as a new growth pole – these are all very critical issues.

“Fortunately, our economy has not faced these ravages that we have seen around the world,” the President reiterated.

He asked: “Now what happens if the recession is prolonged?”

Continuing, President Jagdeo warned: “If the recession is prolonged, we may face some consequences. We have already seen some reduction in remittances coming to our country but if the world continues to be where it is now, where it does not have any dynamism, then we may, in the future, face some of these consequences.”

He advised: “So we are very cautious about 2010. We are optimistic about it but we are managing our resources carefully.”

President Jagdeo reminded the Army officers that there are still challenging times ahead and said: “This is a beautiful country. This is our homeland. This country represents our dreams, our opportunities and it will only fulfill those expectations if we make it so.”

“We all have an important duty and work in the future. Each of us has a very important role to play in changing this country into what kind of society we want. We want a society at peace with itself, a society where our people are not judged or differentiated based on how they look or what they believe in but by the fact that they are Guyanese.

“A society where we can take care of the elderly and the vulnerable among us with compassion. That is the kind of society we aspire to.

“A society that rewards hard work because we are not going to get to the place where we want to be as a country and in each family, unless we do so through hard work and unless we ensure that every single day we add wealth to this country not decumulate wealth.

“Because, for a very long time in our history, almost for twenty years, we decumulated wealth. We consumed more than what we created…when you consume more than what you create, you end in deficit, you go backwards,” he observed.

President Jagdeo posited: “We are going to face all kinds of challenges, global challenges, local challenges, political challenges and economical challenges. But, if we keep our eyes on the prize of where we want to be and we have the energy, the commitment, the enthusiasm to pursue that pathway, I am convinced that this country will realise all of its expectations and, not as a country, but individually.”