Gov’t performance cannot be assessed in a vacuum – VP Jagdeo

Guyana’s inflation rate for 2023 is 1.9 per cent, when the global average is between 4 to 5 per cent, according to Vice President, Bharrat Jagdeo.

“We don’t invent laws of economics…in any part of the world, you have to assess how a government has been able to address a phenomenon, which is natural, particularly in times of escalating prices, global uncertainties, etc.…there are real reasons for price movement,” he said on Thursday (January 4, 2024) during a press conference at Office of the President, addressing the continued use of the cost of living as a political football.

Jagdeo added, “You have to assess the competence of a government in terms of how they have been addressing this issue, comparatively with others. It is not in a vacuum. It is not abstract… I have outlined how the pressures of inflation have impacted Guyana and how we have worked to mitigate those…. this can be easily fact-checked.”

COST OF SUPPORT

Importantly, on the issue of concerns of Guyanese regarding the cost of living, the vice president noted that these have not gone unnoticed and the PPP/C government, in different ways, have responded to ease the burdens successfully, considering the inflation rates that countries like neighbouring Suriname and Trinidad and Tobago are still battling.

In Guyana, some of the measures taken include:

•           The removal of VAT from water, electricity and data services along with some everyday commodities, fuel lubricants and construction materials.

•           Constant increase in old-age pension and public assistance which in 2022, put $2.3 billion and $432 million into the pockets of Guyanese.

•           The reinstatement of the ‘Because We Care’ cash grant and school uniform cash grant which stands at $30,000 per child in both public and private schools.

•           Support for the construction of homes through the handout of steel and cement.

•           One-off cash grants to sections of society, such as farmers, fishermen, persons with disabilities, hinterland and riverine households, and pensioners.

•           Farmers benefiting from free fertilizer from the government, a move the government said was necessary to keep food production low and,

•           The creation of over 11,000 part-time jobs across the coast.

The concerns about the cost of living in Guyana are being addressed by a $5B allocation that was earmarked for interventions under Budget 2022.  Notably, In August 2021, the President Ali-led government advanced an adjustment to the freight cost component, rolling back freight costs to pre-pandemic levels.  This measure was initially due to expire on January 31, 2022, but the application of this adjustment has been extended at the cost of billions.  

Along with supporting farmers and cushioning the net effect of the increased cost of freights, a range of tax benefits have been instituted to offset the full brunt of the cost of living problem. These included the removal of VAT on electricity and water, the 5% reduction—across the board—on water tariff, the zero-rated status on essential items and household items, the removal of VAT on data, the reduction of the excise tax rate on fuel (first in February and then in October) and the reduction of licence fee.

Guyanese also benefited from a one-off $25,000 relief grant, the re-introduction of educational grants (benefited both public and private school students), a one-off 25,000 cash grant for pensioners and a range of other incentives. Other measures announced are expected to support this effort, including reducing fuel and support to farmers.

Notably, according to the International Monetary Fund (IMF), Guyana’s neighbours are recording high inflation.