ONE indication of development is when the country’s economy is getting bigger and bigger. An increase in the economy is one indicator that the size of the national pie is getting bigger, which is an important prerequisite for rising levels of prosperity.

Growth is a necessary condition for development, even though it is possible to have growth without development. Growth is quantitative, as opposed to development which is more qualitative, and refers to the extent to which the standard of living of the average citizen has improved. Thankfully, under the current PPP/C administration, the country is experiencing both growth and development.

For a significant period of our post-independence years, the Guyana economy registered negative growth. This was due mainly to the economic mismanagement, squandermania, extravagance and waste under the PNC regime. Whereas other economies in the region were registering positive growth rates, Guyana’s economy retrogressed for several consecutive years to the point where we had to borrow in order to survive.

Because of falling production and productivity, the PNC regime had to dip into the Bank of Guyana’s reserves, which at one time had reached unsustainable levels. The regime was forced to resort to printing money, which at one time was not worth the paper it was printed on.

One consequence of such a situation was the rapid devaluation of the Guyana currency, and high levels of inflation. At one time, the Guyana currency was inconvertible; that is to say, it was almost useless outside of the country, quite unlike other countries in CARICOM, where their currencies were traded on the international financial markets. The exchange value of the Guyana dollar was the weakest in the region, and remained so for quite some time.

Interestingly, during the early 1960s when the PPP was in office, the Guyana currency was almost on par with the US dollar in terms of exchange value. How, then, did the Guyana dollar experience such a free fall to become, under the PNC regime, one of the weakest in terms of its purchasing power and its exchange rate, vis-a vis the US dollar?

The reasons are many, but one major cause was the precipitate decline in production and productivity levels, and a consequential decline in exports and export earnings. All the major sectors of the economy were on a downward spiral, including manufacturing, trade and commerce. The private sector was pushed into the backwater, and very little incentives were provided for private sector growth and development. In such an environment, there was neither growth nor development, and poverty stalked the land.

With the coming to office of the PPP/C in October 1992, the growth dynamic of the country has changed. The private sector is once again playing its role as the engine of growth, and the manufacturing sector is again showing its resilience, even in the face of an economic slowdown caused by the COVID-19 pandemic. According to data released by the Bank of Guyana, the sector recorded a 13.1 per cent increase in the first half of this year, compared to a 0.2 per cent contraction for the corresponding period last year.

This is, indeed, encouraging news, and is indicative that the economy may very well be on the road to recovery, after taking a beating from the COVID-19 measures taken by the administration to contain the spread of the novel coronavirus. The private sector and the manufacturing sector play a key and critical role in terms of job creation and foreign exchange earnings.

The PPP/C administration has done a commendable job in reversing the economic decline caused by the past regime, and laying a solid foundation for robust and sustainable growth and development.