Int’l sanctions could lead to economic decay, death of businesses in six months – Deodat Indar warns

If the Guyana Elections Commission (GECOM) fails to ensure the results of the March 2 General and Regional Elections are credible then the sanctions that would follow from international counterparts would be devastating to Guyana’s economy. This is according to former head of the Georgetown Chamber of Commerce and Industry (GCCI), Deodat Indar.

In his most recent analysis on this issue, Indar examined the economic implications that would ensue should Guyana find itself under undemocratic rule. Indar noted that the sanctions would take a variety of forms.
Expounding in this regard, Indar said that sanctions could be placed on the President and his entire Cabinet, their families, and in some cases, close associates. He said, too, that sanctions would befall the staff of the Guyana Elections Commission, all political appointees and their families, members of the Guyana Police Force directly involved and complicit in enforcing the installation of an illegal government, members of the army who were involved, members of the Judiciary who were also complicit, and all other politically affiliated persons contributing to or enabling the establishment of an illegal government.

Along with the foregoing, Indar was keen to note that Guyana, under an illegal government, will become a pariah state, subject as a country to expulsion from the international and regional community.
Indar said that such exclusion would see Guyana being excluded from accessing finance from international funding agencies such as the World Bank, the International Monetary Fund (IMF), the Caribbean Development Bank (CDB), the Inter-American Development Bank (IADB) and other international banks.
The businessman continued, “Needless to say that this would drastically retard national development and severely damage the way of life of the Guyanese people.”

In addition to this, Indar said that sanctions would further manifest itself with global banks being issued instructions from the US Treasury Department’s enforcement arm, the Office of Foreign Asset Control (OFAC), to bar financial transactions from being routed through the USA. He said that other countries such as Canada, the United Kingdom, and the European Union member states would put similar arrangements in place to bar wire transfers from being routed through their registered banks and jurisdiction(s) which they control.

Indar also said that the isolation of Guyana would essentially result in a suffocation of businesses. In this regard, he said that payments for imports would not be able to be completed, thereby starving Guyana of essential materials for plant and machinery, branded goods, parts for manufacturers and retailers, and all other forms of imported goods.
The former GCCI President said, too, that the trading of Guyana’s gold on the world market can be frozen while noting that remittances from countries such as US, Canada, UK and EU are expected to be prohibited.

Faced with these sanctions and international isolation, Indar also cautioned that Guyana could be forced to use up the little reserves left at the Central Bank, which is approximately 2.5 months of import cover based on the reserve level. Thereafter, Indar said that Guyana will find itself bereft of the kind of resource levels needed to sustain businesses and their operations.

Indar said, “Businesses in Guyana may be expected to die out within six months to one year. When this kind of shortage of goods and currency are imposed on an economy, it results in unmanageable inflation escalating further and deeper into hyperinflation, driving the poor to the brink of mass starvation.”
He added, “The chain reaction then pushes mass migration out of Guyana, thereby weakening local demand and resulting in the ultimate destruction of the entire fabric of the Guyanese society…”

For many Guyanese who have savings and property, Indar was keen to point out that savings in Guyanese dollars will evaporate in its value as well as purchasing power due to the inflationary effects as seen in Venezuela and Zimbabwe. He said too that property value will sink as a result, as no new investment would be viable.
Taking the foregoing into consideration, among other factors, the former GCCI President said it is quite clear that there is no scenario where a positive can come about from undemocratic rule.