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|Addressing weaknesses in the global economy|
|Friday, 28 September 2012 20:48|
The weaknesses in the global economy are putting the more vulnerable economies under severe stress and is hampering their economic growth and advancement, because
in today’s world, all economies are interlinked and therefore when some countries experience economic troubles the rippling effects are felt across the world.
The famous expression of our late President Cheddi Jagan puts it vividly: “When North America sneezes Latin America catches[a] cold.” The only difference now is that when one or more major economy sneezes, the entire world catches a cold.
In the present scenario, financial and technical assistance to developing countries are severely curtailed which add to their already difficult plight, especially in light of the fact that they no longer enjoy preferential prices for their commodities. The dilemma here is that under such circumstances increased aid is even more needed, but they are not forthcoming because of donor countries’ troubled economies.
President Donald Ramotar therefore hit the nail on its head when he expressed concern about weaknesses in the international economy and the impact they are likely to have on sustained growth in developing countries if prolonged, even as he shared success stories in Guyana at the 67th United Nations General Assembly in New York.
Speaking to world leaders, he said cognizance of these challenges makes the case more compelling for reform of the graduation policies and aid-allocation criteria of the International Financial Institutions, measures to ease the debt burden, renewed access to concessionary financing for highly indebted middle- income countries, and strengthening financial regulations.
“Several of the major contributors to global output are grappling with unsustainable fiscal balances which hinder their ability to stimulate lasting recovery. The problems in these economies continue to place a drag on global growth. Compounding these difficulties is the slowdown in output in major, emerging economies. Naturally, these events have had serious, negative impacts on developing countries,” the Guyanese leader said.
“Although more resilient than in earlier times, developing countries have paid a heavy price as a result of the present difficulties experienced in the world economy… Much of the gains that were made in the pre–2008 period have been erased by the continuing difficulties in the world economy. The small,vulnerable economies of the Caribbean face special challenges, compounded by generally high levels of indebtedness and falling export revenues.”
President Ramotar made reference to Guyana maintaining stability at the time of the global recession and achieving an economic growth rate of approximately five percent per annum over the past six years.
Guyana’s economy recorded a 2.8% growth in real Gross Domestic Product, according to the 2012 midyear report, with total export earnings growing by 9.2%, gold by 13.2% and bauxite by 41.9%. Interest rates trended downwards and inflation remained within acceptable norms at 1.8%, while private sector credit expanded by 8% and Foreign Direct Investment amounted to US$167.2M in the first half of 2012.
Guyana was considered a country with bright growth prospects while other nations in the Caribbean Community were hindered by the economic downturn.
President Ramotar believes it was a result of the investments his government made in people, dedicating more than 30 percent of the country’s budget to education, health, housing, water and social programmes targeting the most vulnerable.
The goal for universal primary education has been achieved and attaining same at the secondary level is within reach; however, significant challenges remain in reaching people in the remote areas. “If we are to encourage our youth to become responsible citizens and prepare them to be the leaders of tomorrow, we must ensure that our education systems allows for the development of their full potential,” he urged.
The country is set to experience a new wave of development under the country’s Low Carbon Development Strategy (LCDS).
However Mr. Ramotar conceded that the global financial crisis is posing a threat to the sustainability of the gains made and this could result in serious social problems in developing countries.
It is therefore hoped that tremendous efforts would be put into the search for a solution to the global financial crisis so that it comes to an end sooner rather than later, because it is the poorer classes of people who feel the squeeze the hardest.
- Speaking with a concerted voice against this ‘naked vulgarity’
- Georgetown garbage scourge horrors
- Good news for our rice industry
- Those impeccable military standards
- Playing political football with the national interest
- Stable families make stable societies
- The dark practice of hypocrisy
- TVET assuming greater role in economic development
- A fine gesture to rice farmers
- Upholding the rights of the working class
- Of Motherhood and Nationhood
- Effective and proper drainage systems are vital
- An atrocity of uncivilised proportions
- Our continued economic success
- CHILD ABUSERS - simply monsters in human form
- The positives are visible
- Another record-breaking performance for the rice industry
- An unnecessary intervention
- Witter’s disdainful level of incivility
- The lawless mini-bus culture