Business Page 2005? Same old story

Saturday, January 1st, 2005


Even as we boldly look forward towards the New Year one cannot help but marvel at the manner in which nature trumps politicians and makes a mockery of men, and sometimes women. While the Minister of Tourism insensitively asserts that the Main St Lime will go on notwithstanding the devastating fire which destroyed the one hundred and forty-three year-old Sacred Heart Church - taking with it part of the soul of Guyana - the rains came and put paid to such plans.

Time Magazine named as its 'Man of the Year' George W Bush, re-elected for a second term as US President, but it is a tsunami in the far-off Indian Ocean that has riveted the world's attention and captured its imagination. This disaster is certain to deliver the picture that will forever be etched in the minds and memories of those who need to be reminded of nature's power and anger at the callous manner in which her bounty, hospitality and gentle quality are being abused.

These are two of the stark reminders as we focus on a year full of challenges, ripe with possibilities and missed opportunities. The year 2005 will not be special or indeed memorable, and will see us on the threshold of another general election, a census of sorts, an occasion on which Guyanese show themselves at their unthinking basest.

The decline of the USA

Shortly after the 2004 US presidential election, a friend schooled and experienced in international affairs told me that the greatest significance of Bush's re-election was not the pursuit of a conservative agenda but that it would herald the decline of the US. That sounded far-fetched, since the USA's reign can at best be measured in decades, its military might is unchallengeable, it is the largest economic as well as military power in the world, the cradle of entrepreneurs and host of the United Nations.

But America is ranked 13th on the Economist's worldwide quality-of-life index 2005, in which Euro-pean countries hold nine of the top ten spots - Australia being the only intruder. America's wealth clearly does not translate into satisfaction, but that is not where the challenge lies but in the growing power and influence of the fastest growing economy in the world - China.

In economic terms America is no longer the dominant player it was only a couple of years ago. It now faces an expansionist China with a population four times its own, labour costs about a tenth of that of the United States and a voracious appetite for the world's raw materials. China is now extending its wings in Latin America and its trade with those countries will help to sever the umbilical ties which have characterized US-Latin American relationships during the last century.

And then there is Europe, not only a resurgent power, it is also an expanding power that commands a place as an equal with the Americans. Europe's currency, the euro, is now not only at an all time high against the once all-powerful greenback, it is now a currency of choice for Chinese and Russian central bankers and the members of the Organisation of Petroleum Exporting Countries (OPEC) investing the mountains of surplus dollars generated by oil revenues.

The current danger for the US is that if not its current debts, then certainly its subsequent borrowings, which are measured in trillions, may no longer be measured in United States Dollars alone, leaving it with some serious adjustments to its lifestyle. That is not a prospect which the current generation of Americans will find palatable, but that does not make it any less real.

The UK and the Middle East

And on the other side of the Atlantic, Prime Minister Tony Blair will be voted back for a third term due as much to the dismal failure of the main opposition Conservative Party as to the economic successes of the first two terms. Indeed that country's perennial third force - the Liberal Democrats - may form the opposition in the next parliament giving false hopes to those who feel that a Third Force will magically matter in the 2006 Guyana elections.

Even at this late stage, it is doubtful whether elections in Iraq in January will be truly national and whether they will provide the opportunity for Bush to declare 'Mission accomplished' with some greater conviction. But expect no further adventures even against North Korea and Iran.

The first Palestinian leader to be elected other that Arafat will offer the best prospects for peace in the Middle East, but uprooting tens of thousands of settlers will prove difficult for Sharon and impossible without the active encouragement of the EU and America. A settlement will have wider positive impact in the Middle East as it can take away one of the lightning rods of the equally powerful but more recent phenomenon, international terrorism.

The rise of the South

Close to home Brazil's Lula will provide a voice and a face with which the countries south of the equator could readily identify. As part of the China-India-South Africa quartet, Brazil will command respect not only politically but economically as well, forcing the rich countries of the North to take notice of the South. Indeed the quartet and Russia will transform South-South trade, and give hope to countries like Guyana looking for a role in an international alliance in which it is more than just another vote at an international forum.

China, Russia and Brazil will be looking to joint ventures with third world countries, particularly those that have not already sold or mortgaged their patrimony of non-/semi-renewable natural resources. Guyana will do well even at this late stage to consider the lopsided nature of many of the so-called investments by international companies which bring little in return.

World trade will witness further liberalisation as the US finds it can no longer play the bully role in the World Trade Organisation (WTO) and rich countries realise that it is not in their long-term interest to alienate poor third world countries with restrictive trade policies and barriers designed to prop up their less productive sectors. Guyana will have to articulate a credible argument for supporting trade liberalisation while advocating the retention of preferences under the agricultural policy of the EU which gives Guyana and other ACP countries artificially high prices for some of their products, including the vital sugar industry.

Caricom and Brazil

In the Caribbean, Trinidad and Tobago will continue its march towards first-world status, despite the gradual decline in oil prices. While Guyana is naturally and ideally placed to be the bridge to the South American continent, and while it talks about it, Trinidad and Tobago will be actively promoting itself into that role, planning to become bilingual and cementing its place as a real powerhouse in the region.

St Lucia, Barbados and St Vincent will continue at their own measured pace; Grenada will not return to its pre-hurricane position and Dominica will find adjustment to a liberalised economy a continuing challenge.

It is not, however, for economic progress that Caricom will be remembered, but for the opening of its headquarters in Guyana and the lukewarm response to the establishment of the Caribbean Court of Justice, so much part of the infrastructure of the wider CSME which has been in the works for more than a decade.

Having already moved into the mining sector, the Brazilians will finally take over the nocturnal service sector and Brazil will show particular interest in one of the smaller parties with which it shares some common interest. Brazilians will continue to make up for the continuing migration of Guyanese to just about anywhere.


Guyana will move into election campaign mode with increased attention to the cricket stadium and a bridge across the Berbice River, with caution and the IMF being thrown to the wind. The PNC will still not be able to make up its mind whether it is inside or outside of parliament, and will find it increasingly difficult to attract funds for its election campaign. Unable to match the PPP's bank-rolled, Trinidad- managed PR campaign, the PNCR will finally but unsuccessfully call for elections finance reform. It will also find that the 'R' has done little to enhance its electoral chances.

A fourth Third Force will be announced while another hung jury will lead to Benchop being set free. There will be enough crimes to keep the Kaieteur going, and the Chang Commission will end with an inconclusive, expensive report that will generate controversy, change no opinion but allow Minister Gajraj to resume his duties.

In March the Minister of Finance will announce the 'largest ever, tax-free budget,' the tax measures having been imposed well in advance. He will announce growth of about one per cent (far below international rates) with much of it coming from services which possibly includes the laundry sector used to dry-clean the heaps of drug money which has been taking over the economy and crowding out so much of our legitimate business. The Minister will also announce the introduction of VAT (value added tax) to applause from his colleagues, many of whom will think it is something to do with the curing of rum. The Minister will again forget to tell us whether Guyana will replace the IMF programme with anything looking like a strategy we can call our own.

The Guyana Securities Council will continue to be stymied by the captains of industry, and corporate governance will face further setbacks as conflicts of interest and manipulation of the Stock Exchange become even more blatant. Auditors will continue to be poodles of management rather than the watchdogs of shareholders, lawyers will peddle their clients' lies and doctors will continue to issue medical certificates for imagined aliments.

Guyana will win the title of the highest per capita number of beauty pageants, the West Indies cricket team will continue to struggle as Lara proves that you can't teach old dogs new tricks and our newspapers will show that news is more important than facts.

At the end of it all, it will take neither Nostradamus nor Cassandra to tell us that very little will change - it will be the same old story.

Best wishes for the New Year!