By Rawle Lucas

I READ in amazement, the doomsday claims being made by supporters of the PPP/C in the Guyana Times, in Kaieteur News and on social media about the state of the Guyana economy. Some of the posts reference the negative balances in the government account at the Bank of Guyana (BOG), numbers inferring excessive tax collection and monies left for the government to spend when the PPP/C was leaving office. Their frenzied views about the data are not consistent with an objective interpretation it. A look at the contentions around the negative balances in the government account is a good example. These writers are not seeking to educate anyone in addressing the negative balance in the account with the BoG. Instead, they are making misleading claims that the coalition has recklessly grown the debt and has bankrupted the economy. I would like to quote Dr. Tarron Khemraj, a highly-respected author of this subject and the one who pointed out the negative balances in the government’s account in the Sunday Business Page of Stabroek News. Dr. Khemraj, who went to great pains to explain what he was talking about states:

“Some observers might be tempted to use the overdraft as a reason to blame political foes. This monetary system, however, was developed for an independent country with its own national currency. It was designed to provide the government with some policy space … to meet expenditure without excessive belt tightening…”.

It is clear that Dr. Khemraj was saying that nothing was wrong with running a negative balance as long as it was not too excessive. The negative values do have positive implications for the country. Persons with sober heads would realise that that extra money would end up in the hands of private banks, which could use it to make loans or otherwise advance its business interests. Clearly, such negative balances have the potential of bringing benefits to the private sector as well through the intermediation process. Dr. Khemraj also noted that the decline in the balance in the account started under the PPP/C at a time when the economy started to decline dramatically.

In seeking to denigrate the coalition, one commentator observed that most of the money was likely spent on personal emoluments. That is not a bad thing either if you are trying to help people to come out of poverty or from falling into poverty. For those who care about the welfare of ordinary Guyanese, those negative balances therefore actually serve a useful purpose. The significance of the money is seen in Guyanese workers being able to retain an additional G$46 Billion in their pockets as a result of the salary increases provided by the government. That is clearly not the interest of the PPP/C, whose echo chamber has taken to social media and other platforms to criticise this sensitive and thoughtful act by government. As can be inferred from the writing of Dr. Khemraj, using its independent monetary system to prevent the public servants and vulnerable people of Guyana from suffering hardships is a worthy act. The logic of the harsh objection of the PPP/C to that action by the government is that people must stay impoverished as they were before being rescued by the coalition. This insensitive disposition to their fellow countrymen and women is incomprehensible. Yet, the PPP/C wants people to believe that if it got back into power, all Guyanese would be treated equally.

The tax collection of the Coalition was cited as being over G$300 billion more in taxes than collected by the PPP/C from around the time that it left office. They express wonderment as to where the money went. What the PPP/C alarmists are not telling Guyanese is that in contrast to the tax giveaways of the PPP/C that averaged between G$150-200 Billion, the Coalition was more judicious in the granting of tax concessions, with the result that more taxes and not less taxes were collected. Further, it must be recalled that the Coalition granted taxpayers a nine-month long amnesty programme in 2018, in which nearly 15,000 taxpayers stepped forward and honoured close to G$10 billion of their tax obligations. The money was owed by persons who did not pay their taxes during the years of the PPP/C. These are people and businesses who saw fairness in the application of the tax laws under the Granger administration and probably felt that they no longer needed to evade taxes just to stay in business or make ends meet. In addition to income tax, people and companies paid their fair share of capital gains and property taxes. Guyanese need to understand therefore that the increase in taxes came from responsible citizenship and not coercive practices.

The alarmists of the PPP/C want Guyanese to believe that the Coalition took their money and wasted it. In what looks like an ardent attempt to distort the truth, persons have referred to monies left with the Coalition by the PPP/C when it left office. With all that money that the PPP/C claimed it had in 2014, according to World Bank data, Guyana could only use 20 per cent of its GDP to invest in expanding the economy and improving the lives of the people of this country when the Coalition took over in 2015. Through proper management of the economy, Guyana is now able to use 37 per cent of its GDP for investments and to improve the lives of the people. All of this happened before the first barrel of oil was produced. As a consequence, the country has the capability to grow itself at a faster rate than before and that ability came from prudent spending of the taxes collected to help people and businesses. If one wants to talk about reckless spending, one must look at what happened from 1992 when the late President Hoyte left Guyana with the ability to spend 51 per cent of its GDP to improve the lives of Guyanese. By the time the PPP/C left office in 2015, it was at 20 per cent after falling all the way to eight per cent in 2013.

None of the critics can prove that the Guyana economy is unsound and incapable of sustaining the lives of its people. It is impossible for them to make that claim because the economy grew for five consecutive years under the Coalition administration. If one were to look back at the first term of the Jagdeo administration (2001-2005), one would see that the economy contracted on several occasions and the best growth rate of Jagdeo’s first term was below the lowest growth rate of the Granger administration. The performance of the first era of the Jagdeo administration culminated with a flood of the country in 2005 that devastated the lives of many Guyanese who were already struggling in a world of poverty. Yet, the propagandists of the PPP/C are stifling their conscience about the good handling of the economy under the Granger administration which could have only come from sound economic management.