This broken and twisted economy the PPP has left behind – commentary

This broken and twisted economy the PPP has left behind

Pompous Editorial – Jul 12, 2015 – The Mosquito 

To understand the PPP’s current narrative the economy was like a Bugatti doing 120 on the highway and as soon as the opposition got into power they put it into an immediate, screeching reverse.

After all it’s been ten years of unbridled economic growth! Ashni Singh in January declared that “the people of Guyana have every reason to be proud and optimistic that their country has been witnessing economic growth for almost a decade with every sector showing significant and steady increases.” And even though official figures were not even released prior to May 11, Ramotar claimed GDP for 2014 grew by 4.5%. That’s bullshit as we suggested here.  

The truth is that this economy has been running on fumes for the better part of two years but the government fudged the numbers, tried to spend its way to growth with massive, wasteful projects and utterly failed to remedy outstanding vulnerabilities. And while all the traditional sectors have been in decline the economy was reliant on such ephemeral activities as the Caribbean Premier League which the government actually pays to host, duck curry competitions, mega concerts the organisers of which got tax breaks, and the annual GuyExpo bacchanal.

Robeson Benn said it best back in February when he told reporters he would go to jail for the illegal spending of $306M on the airport expansion project: “I stand in support of Minister Ashni Singh, who has found the way to allow the expenditure to be made so that our country’s development does not falter and so that our economy does not go into recession… we must have growth…. “ Yes. Pumping up GDP by having imported Chinese labourers move 520,000 truckloads of sand about a mile justified any illegalities, according to Benn.

The Chinese-built Marriott at a cost of US$58M; the US$30M Amaila Falls Road to Nowhere, the god knows how much failed fibre optic cable, the abandoned $600M High Street building habitable only by pygmies… $100M on rural call centres and chip factories, the list of misguided, wasteful projects goes on.

Meanwhile the government infused a haemorrhaging sugar industry with a subvention of US$30M  last year even as Ramsammy claimed in January that the US$110M albatross around its neck known as “Skeldon in 2014 showed signs of finally beginning to meet expectations.” Yes while Guysuco was sinking under US$58M in debt and had made a fatal blunder not to lock into a contract that would have guaranteed high prices for three years.

Then when it failed to get 25M Euros in grants from the EU because it could not account properly for previous funds, the government in a panic first tried illegally to transfer $3B from the GGMC only to have that blocked by the courts. Finally after more machinations, through an utterly bogus purchase of the Skeldon co-gen plant by GPL for US$30M, Guysuco apparently received US$9M upfront. Great!  Problem solved for the year! Not so fast! A few days after the elections the Guysuco “crisis” hit and it was for the new government to sort out the mess.

Over to what Ramsammy described as a “laudable success story” the rice sector which in fact has been subsidised and built on an annually renewable trade deal with a quixotic and economically ravaged neigbour which covets 2/3rd of this country’s land.

That’s sound economics…

After Jagdeo secured the deal in 2009, production numbers kept climbing from 182,000 MT in 2008 to 500,000 MT in 2014, a third of which went to Venezuela at preferred prices. The dirty truth is that the citizens of Guyana were actually propping up the rice sector by paying inflated fuel prices at Guyoil because proceeds from fuel sales went to pay farmers. Why else would gas still be around $200 a litre when the world oil price has halved in the past year?  And the rice deal was doomed as soon as oil fell, since Guyana would be exporting more rice than the value of its fuel imports. The government had to know this since last year but Ramsammy gave no hint of a problem for the industry when he came backfrom Caracas in March like a latter day Neville Chamberlain waving an agreement for 2015: “Rice in our time!”  No warning that this would be the last year and that a US$130M market would be wiped out. It is criminal to leave farmers literally holding the bags; then to cynically blame the cancellation on Granger’s belligerence over the border issue is close to treachery.

Do we need to describe the demise of the gold industry? Granted that was on the back of plummeting gold prices but even at US$1200 an oz, miners should be able to make money. And the boom of the past few years has been at a tremendous ecological and human cost: wild west crime in the interior, unsafe and completely unregulated working conditions which saw eleven miners killed days into the new administration, and the continued destruction and mercury riddled pollution of Jagdeo’s hallowed rainforest. All the while the government turned a blind eye to rampant gold smuggling including US$11.5M of ingots aboard a boat held up in Curacao. Are we really to believe the government did not know who it belonged to?

We should talk more of the previous administration’s embrace of dubious businessmen: Mortgage fraudster Ed Ahmad who was sold prime land at Leonora for $80M and other city real estate only months before his arrest;  EZ Jet embezzler Sonny Ramdeo hailed for “seeing it fitting to return to his country of birth and provide a service that will develop Guyana through tourism”; Khamraj Lall allowed to build a private hangar for his aircraft now facing up to two yaers in prison for smuggling US$620K out of the US and let’s not forget the US$6M he deposited over three years in such as way as to be unnoticed; and finally convicted drug trafficker Roger Khan who was sold land for his housing developments even while his gang was engaged in extra judicial killings “to  protect the people of Guyana against a coup d’etat” .

Let’s motor down to the city, a mini Medellín of multi storey buildings creating a new horizon that the PPP even used in its campaign as a sign of progress. The scene of a real estate bubble that saw empty city lots change hands for US$500,000 or more, a McMansion in Pradoville II for US$1.2M. Part of this was fuelled by mining money, and partly by businesses simply under invoicing and plain smuggling everything they import from jeans to cellphones. A recent report on illicit financial flows, of which under invoicing and smuggling make up a large part, estimated them at 511% of total public spending on education, making Guyana 6th in the world rankings.

And a lot of this real estate bubble has been caused by drug traffickers avoiding the banking system in the face of looming anti-money laundering legislation. The effect of narcotics on this economy cannot be overstated. The cocaine sector has propped up the exchange rate for years as it generates huge amounts of foreign currency. Cocaine barons have built business empires from their profits that appear legit but would never be competitive and sustainable without value added shipments. Look at just one container from Sukdeo Sons Fishing of Lusignan holding US$12M of cocaine; or Guyana Timber Products Inc busted in February 2013 with $1.5B in cocaine headed to Holland. We must brace for more hardship and job layoffs if and when the government and the DEA start cracking down on narcotics.

Yes folks, the charade is over: the office buildings already stand empty, the gold fields are deserted, rice mills will soon grind to a halt and the banks face major defaults. Hard times are coming to Guyana. But let’s get one thing straight: the seeds of this twisted economy’s demise were sown by the PPP.

It was never a Bugatti. They handed the new government the keys to a clunker.

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Comments

  • Deen  On September 27, 2015 at 10:51 am

    Wow! The Pandora box has been opened. This editorial has given us some disturbing facts about the gravity of corruption that prevailed during the Bharrat Jagdeo and Donald Ramotar administration. No wonder Guyana still wallow in the cesspool of economic decay and chaos. The mismanagement, incompetence and corruption by the PPP/C government from 1992 to 2015 have done much damage to the country behind a smoke screen of progress that hid the clandestine and criminal activities These leaders of the PPP/C, and all those involved, should be penalized for their egregious and deceptive actions. They have virtually defecated on the Guyanese people and the hallowed country of Guyana that we all love so dearly.
    I would tend to assume that there is much more dirty laundry to be aired and seen after a continued thorough investigation of all the transgressions, and we have seen the tip of the iceberg.
    It’s often said all that glitters is not gold. I think PPP/C under Bharrat Jagdeo and Donald Ramotar try to mislead the people of Guyana to believe in their deceptive leadership, but the truth will prevail…..the truth sometimes hurts and we’re all hurt.
    Thanks for this editorial.

  • Gigi  On September 27, 2015 at 12:27 pm

    “But let’s get one thing straight: the seeds of this twisted economy’s demise were sown by the PPP.

    It was never a Bugatti. They handed the new government the keys to a clunker.”

    Really, where does the the cesspool left by the PNC dictatorship fit into all this?
    And how do you explain all the money available for lavish salary increases and lifestyles for the new govt, the extravagant and constant partying, the creation of newly junior ministers receiving hefty salaries, and the ‘green and prosperous budget’ by the new economics guy. Where IS all that money coming out of the clunker the PPP left behind.

    Tell you people what. Us seasoned and marinated PPPites love our PPP govt and we ain’t switching sides. NEVER! I also believe that the same applies to you PNCites despite the failed years of the Burnham/Hoyte dictatorship. So why don’t we agree to divide Guyana into two separate and independent states. You can keep your perceived good life under the PNC and we will definitely keep our good life under the PPP. And we shall never have to meet or acknowledge each other. Both sides ought to be happy and contented and hard at work building and establishing their new countries that they wouldn’t have time to think about the ugly history of Guyana that keeps people chained to mental slavery. Life could be sweet for both sides. We need you to influence your side to support and push for a peaceful two state separation…like I am doing for my side. If your side decide you don’t want the PPP crossovers, the ABC countries will take them in. We don’t want them either. And we will reciprocate likewise.

  • detow  On September 27, 2015 at 3:31 pm

    Gigi, in the past I have suggested to you, mostly in jest, that you should drop dead, get lost, go to Venezuela or just get a new brain. This time around I am suggesting, seriously, that you do one or all of the aforementioned. Guyana does not need the likes of you nor your asinine suggestions. Both Burnham and Hoyte are long dead and play no significant part in today’s society while Jagdeo and Ramotar are both still here with us, the former of whom is still trying to screw the Guyanese populace. I feel sorry for you, dealing with issues of the past while the rest of the world is struggling to deal with the present and the future. Your mind is like a cesspit, s…t. goes in, stink comes out.

  • Yvonne  On September 27, 2015 at 9:07 pm

    Detow……don’t let Gigi the donkey rattle your chain. No one takes her seriously and no one cares about anything she has to say because they know it’s just a bunch of racist venom spewing from the stink mouth that she is. Two separate states….stupes!!!!!

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