Economics, Not Insults

SOMETHING predictable happens whenever a Guyanese leader says something complex out loud. It gets flattened into a headline, and the headline becomes the story.

That is exactly what happened this past week, when President Irfaan Ali’s remarks on changing consumption patterns and the cost of living were reduced, in some quarters, to a single accusation that he was telling struggling people to simply “change” their eating habits.

That is not a fair reading of what was said. It is a distortion, and a damaging one, because it trades a genuine conversation about prices for a manufactured scandal that Guyanese did not need and do not deserve.

Here is what actually happened. At a press conference, the President argued that grants and cash transfers, while necessary, cannot by themselves fix a cost-of-living problem with structural roots. Input costs, market margins, import dependency, and yes, how consumption itself has changed.

He pointed out, accurately, that more Guyanese are shopping in supermarkets instead of traditional markets than they were four years ago, and eating out more often, and that supermarkets carry a materially higher margin than the market stalls they are replacing.

That is not an insult. It is microeconomics. Consumer behaviour, which is what people buy, where, and why, has been a core subject of economic study for as long as the discipline has existed, and no economist would call it controversial to say that a shift in how and where people spend affects what they end up paying.

Turning that observation into “the President blames the poor” required stripping out the context on purpose.

What that distortion also erases is the record of the government actually in office. Guyana remains a free-market economy, but the PPP/C administration has intervened, deliberately and repeatedly, in nearly every channel through which global prices reach Guyanese households.

VAT has been zero-rated on key food items and household necessities since 2021, and removed entirely from electricity, water, medicine, fertiliser, farm chemicals, and agricultural machinery.

More than 200 taxes inherited from the previous administration have been scrapped outright. Electricity and water tariffs have not been raised, even as the State absorbs what it would cost to let them rise.

On top of that sit direct transfers: A new-born grant, the “Because We Care” cash payment, a $100,000 grant reaching households nation-wide, all worth billions of dollars returned straight to families.

 

None of that is theoretical relief. It is money that did not leave people’s pockets, at a moment when, around the world, it was leaving nearly everyone’s.

That last point matters, because no serious person claims Guyana is immune to the world, and no honest official has ever pretended otherwise.

A country that exports crude oil but still imports the refined fuel its taxis and trucks run on will always feel a distant war or a shipping bottleneck at the pump. What the data show, though, is that Guyana has absorbed those global shocks better than most of its neighbours.

Inflation has run at roughly 2.5 to 3.5 per cent through 2026, close to the government’s own target, and, by its account, among the lowest rates anywhere in Latin America and the Caribbean.

That gap between what Guyanese are feeling and what much of the rest of the hemisphere is feeling is not an accident. It is the visible result of policy choices that a headline about eating habits conveniently left out.

Here is the part of the President’s point that deserves more credit than it has gotten. Guyana’s consumption patterns are changing because Guyanese, on the whole, have more money than they did a few years ago, and more confidence to spend it. This is a fact that should be studied and celebrated at once. Former retailers are becoming wholesalers.

Roadside vendors are formalising into registered businesses. Families are defaulting to the convenience of the supermarket over the market stall, and paying the markup that comes with it.

That is what growth looks like when it arrives faster than habits can adjust, precisely the “good problem” that far wealthier, more established economies are also struggling to manage.

The Vice-President put a related point plainly months before this controversy: Guyana still isn’t producing enough of what its own people consume.

The Opposition called that a confession of failure. It reads more like the truth; an honest diagnosis from a government willing to say the hard part out loud instead of pretending the problem away.

That diagnosis points to the only durable answer, and, to the government’s credit, it has said so without flinching; grants cushion, they do not cure.

An import-dependent economy cannot subsidise its way out of a global price shock forever, at some point, it has to produce its way out.

That is the logic behind farmers’ markets designed to cut out inflated middlemen margins, behind the Small Business Bureau, which trained more than 3,200 entrepreneurs, and disbursed roughly $280 million in loans last year alone, and behind the Small Business Development Bank now taking shape to finance the next stage of that growth.

It is also the logic behind the Gas-to-Energy project, on track to cut electricity costs by roughly half once fully online. a single change that touches the cost structure of nearly every business and household in the country. None of this delivers relief overnight. All of it points in the right direction, and that direction is worth more than a slogan.

What Guyana cannot afford, at this stage of its transformation, is a public conditioned to hear every hard economic truth as a personal insult, or every difficult sentence from a podium as proof of bad faith. There is no version of this growth that arrives without friction, and there is no going back to what the economy looked like before oil changed its scale.

The sooner that is accepted, the sooner the real work, building skills, building businesses, adapting to a country that refuses to stand still, can begin in earnest.

The government’s direction has the potential to get Guyana where it says it wants to go. Getting there will take patience and honest engagement from citizens, not another news cycle built on a headline that was never true to begin with.

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