The Alliance For Change

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The Alliance For Change (AFC) says that with all the glowing reviews of the country’s economic performance by Finance Minister Ashni Singh, his analysis is based on sectors that are susceptible to external shocks and price uncertainty.Dr Tarron KhemrajThis is according to AFC’s economic advisor Dr Tarron Khemraj who told journalists at the party’s weekly press conference that essentially, this growth is based on selling Guyana’s primary resources without any major added value taking place at home.He said that the present tepid growth rate could have been much better if the PPP government got the Skeldon Sugar Factory in proper working order, which in turn includes planting the adequate amount of canes.Furthermore, he said an average growth rate of just below four per cent is far below the minimum target of seven per cent of the AFC, which has outlined a plan to meet that growth target.“We have missed the sugar price boom that will not continue indefinitely. In addition, we are benefitting from very high gold price but actual production of value added gold jewelry continues to lag price. We missed the great economic boom of the 1990s and also the early 2000s,” Dr. Khemraj emphatically said.He said that the PPP is boasting of the country’s housing development as a major growth factor in the economy.“While we support housing for the masses, we believe the Minister is mistaken to believe this sector can sustain long-term growth in the Guyanese economy. First, housing creates short-term jobs during the period when construction occurs. Second, there is no major industrial or service sector emerging that will produce the kind of income to pay off the housing loans. Third, we believe the PPP is setting up the banking sector for our own subprime-type housing financial crisis. Fourth, most house building materials are imported, thus the housing programme is not contributing to the kind of industry linkages the AFC envisages.”The economic advisor said that the economy is yet to undergo significant structural change, especially with new emerging tradable sectors that can break new foreign markets. Housing, he said, is a non-tradable sector where a house is not something one can export.“The AFC’s vision for housing would be to link the construction of houses to locally made components that could eventually be exported – thus adding a tradable component to housing. This will be true production transformation. We cannot wait another nineteen years to see the realization of these obvious economic activities,” he asserted.Noting that the AFC has articulated an alternative vision for Guyana, Dr Khemraj said that their economic policies will be financed by a portfolio of inflows ranging from diaspora investments, foreign direct investments, local investments, a state development bank and private capital markets. In addition the party will also seek multilateral concessional funding from the traditional sources. “We do not place all of Guyana’s financing in one basket as does the Low Carbon Development Strategy (LCDS). We do not see any of this in the PPP’s economic plan, which is meant to keep the masses at subsistence level. Moreover, there can be no development if the masses remain at subsistence.”