From tackling inflation to ensuring everyone gets an opportunity to prosper, former Prime Minister of Jamaica, Portia Simpson-Miller, has delivered sound advice for local authorities as they prepare for the oil boom.
Simpson-Miller was at the time delivering the feature address at the Georgetown Chamber of Commerce and Industry (GCCI) annual awards ceremony on Thursday night at the Marriott Hotel in Kingston, Georgetown.
Simpson-Miller was the first female Prime Minister of Jamaica, serving from March 2005 to September 2007 and then again from January 2012 to March 2016.
As someone who would have steered the path through some of the most difficult economic reforms in her country, Simpson-Miller cautioned Guyanese leaders that in pursuing this path of economic growth, major adjustments will have to be made.
Inflation
Inflation, she says, is an issue which has to be addressed, particularly, for prices to remain low and stable.
“Since inflation is the greatest tax on the poor, low inflation is the best gift any Government can give to its people,” Simpson-Miller stated.
Already, a consultant from the Caribbean Development Bank (CDB), Dr Justin Ram, has urged Guyana to guard against the impact that inflation driven by oil can have on the overall economy and exchange rate.
At a forum held in Guyana in October 2019, Dr Ram explained that the oil and gas sectors tend to drive inflation in the economy.
“And that inflation tends to lead to other workers in the economy seeking wage increases,” he had stated. According to the CDB consultant, while wage increases are desirable, they must be given by the Government in a structured way.
Small businesses
Meanwhile, Simpson-Miller, addressing a room full of businesspeople, also underscored the importance of achieving stability in the foreign exchange market.
“This is important for reducing inflationary pressures in the economy and also to enable businesses, especially those that must be able to import to plan their transactions in a stable, predictable environment,” she said.
Moreover, the former Head-of-Government suggested that Government implement legislative changes to ensure local and small businesses are able to successfully participate in bidding for government contracts.
“As your economy improves it is vital that local businesses are not disadvantaged in participating and prospering,” she noted.
Government had promised to put systems in place to ensure that 20 per cent of all Government contracts are given to small businesses. It is unclear if this system has been implemented.
Transparency and accountability
As she wrapped up her list of advice, Simpson-Miller underscored the importance of developing a system of public accountability and transparency so that there is public trust in Government and national institutions.
The Government has passed legislation for the establishment of a Natural Resources Fund which is intended to safe keep revenues from the oil and gas sector.
However, stakeholders, including the parliamentary opposition, have contended that there is room for too much political involvement in the Fund. In fact, Opposition Leader Bharrat Jagdeo has repeatedly argued that the mechanisms are not strong enough to prevent politicians from raiding the Fund.
Jagdeo believes that the Fund should be managed by a non-political group, rather than Government, and has since promised to address this matter with urgency, if his party, the Peoples Progressive Party Civic (PPP/C), is elected into Government next year.
