The economic and financial impact of elections 2020

The economic and financial impact of elections 2020

…10 things you need to know about sanctions

Dear Editor,
While it may seem that the role of the international observers is trivial, it is necessary to understand why they are here. Their role is to report back to International organisations whether or not a government of the day in a certain country followed the necessary legal steps in electing their current government. As an economy in 2020, we must understand the far-reaching consequences of what their sanctions could do with Guyana. I want readers to bear in mind that the observers are not saying that PPP/C won. They are merely asking for the country to follow the procedures in place, mutually agreed upon by all political parties and GECOM, in order to verify the results in Region 4.

While it may seem that the observers are here to: ‘Wait and See’, we know that the first step of action, is always data collection. They have already collected their data and now they can choose to act if a president is sworn without the correct procedure.

Every Guyanese regardless of political affiliation must understand the effect on their own livelihood. When the government officials cannot provide for themselves, how can they provide for you? The international observers have been using very tame language so far to tell GECOM to follow the procedures, but we all know that: ‘Easy Snake does bite hot’.
If a President, is sworn into office without GECOM first following the correct procedure of ballot counting, verifying and reporting, we can expect the following to happen. But since we have spoken about the legal aspect already, let us now focus on economics. Here are the 10 things you need to know.

1) All Guyana’s Oil revenues will be sent directly to our SWF (Sovereign Wealth Fund) which, while it is managed by the Bank of Guyana, is actually being held in the Federal Reserve Bank of New York. This means that any sanctions on Guyana will start with the country not being able to access any of the oil money that the country was promised. This means that while we think we are fighting over the oil money, there will be no oil money to fight over. It will not matter about our rumblings over 2% of the oil revenue, we will now have zero.

2) International private sector companies will be blacklisted from doing business in Guyana. This means that honest businesses cannot invest in the country. Additionally, it means that no private company in the USA or across the world can ‘pass money’ to government officials to enact their agenda in order to operate in Guyana. Do you think that the Anti-Money Laundering Bill which was passed that requires all Guyanese to declare the source of funds was meant for the average citizens of Guyana? Do you think that America cares that Aunty Dularie’s Plantain Chip Business made a profit this month? No, they care that foreign companies don’t bribe local government officials or contravene the blacklist. So new businesses cannot invest, and existing business will close, and Government officials cannot be paid off.

3) If Government officials now cannot get money via the oil revenues or via private sector legal spending or illegal bribes, we can still rely on our domestic activity to earn foreign income right? No! We will be expelled from CARICOM, which means that we will not be part of the Common External Tariff, and we now need to negotiate with every country in the world about importing and exporting. When we also get blacklisted by the World Trade Organization, we will not be able to trade with any country. So that means that we cannot export sugar or rice or fruits or vegetables. Neither can we can import anything from the USA or Canada or EU or UK, which includes almost all consumer and capital goods. Sure, local manufacturing can continue, but did you know that the majority of manufacturers need to import raw materials from overseas?

4) If you think that you, the average Guyanese, whether Afro Guyanese or Indo Guyanese, can survive on a minimal budget to provide enough food for 1 meal a day, then you are wrong. The value of the Guyana dollar will plummet and one loaf of bread will cost much more than $200. If you think you can still steal, the question is: where will you steal from? Supermarkets won’t have stock and importers cannot import. You will go back to basic agriculture and plant your own food, right? Wrong! Seeds and fertilizers and pesticides are imported into the country. So we will have no food, we won’t be able to grow food and we won’t be able to import food.

5) Additionally, all Guyanese foreign bank accounts and assets will be frozen. So the politicians keep saying that you will have enough money and food, but the fact is that they won’t have enough themselves. The politicians may also claim that you will be fine because they may have offshore bank accounts, with no foreign jurisdiction to sanction that money. That’s not true, the money that is stashed away would have been deposited from onshore bank accounts, which can easily be traced.

6) If the politicians think that they have already moved money out of their names into their family names, let me remind you that the IRS in the USA knows a lot more about the 300 million residents in the USA than they let on. Let’s keep in mind that Al Capone was convicted on Tax Fraud in 1931. With E-Banking now, you can be discovered in a matter of minutes, not hours or days.

7) If your argument is that: I don’t get money from the politicians, I get it from the Public Sector/Ministries, then I implore you to understand that the Ministry of Finance allocates money to Ministries. They get money in a few major ways: 1) Foreign Direct Investments, 2) Foreign Portfolio Investment 3) Debt Financing 4) Taxes. The first three ways won’t happen because the foreign countries won’t deal with us, which includes the IDB (one of the biggest lenders to Guyana). In terms of taxes, if you thought 14% VAT was bad, please remember that 14% was the lowest they would go. I don’t want to imagine the highest.

8) Ministry benefits will be slashed – Every minister will see a drastic fall in their salaries and minister allowances will not exist. Each ministry’s budget will be diminished to a point that they cannot provide basic services. Ministry of Health will have no medicine, Ministry of Infrastructure will not be able to build roads, much less assist GPL in keeping on the electricity, Ministry of Education will not have resources to teach children, Ministry of Youth Culture and Sports will not be able to send our athletes to international competitions and the Ministry of Public Security will not be able to fund the activities of policemen and women.

9) Now you think, its okay, I will use my salary as a worker in the private sector or old age pension to fund my activities. The answer again is No. Foreign businesses, will be forced to close operations thus laying off countless staff. The local businesses will either close in protest or close because they have nothing to sell or because no one is buying or the staff do not come to work. You will not be able to access any money from local banks because a run on banks will force local banks to close since they will have a liquidity problem and lock out account holders from accessing their money. In terms of pension now, the NIS will not have enough money to sustain the pension programme and will seek a bailout from the Government, which will not be able to help.

10) It’s okay though, everyone has foreign family who can send us money through western union, or money gram or local bank accounts or send money through GTT or Digicel. All these financial services have to sign on with the bank of Guyana as well as their international Parent companies. But I mentioned that we will be expelled from Caricom, OAS, WTO, IDB, World Bank, IMF, so then those services will not exist. Also, I am not sure if you guys guessed it as yet, but talking about international activities, air travel to get out of the trouble will be severely hampered. No more Visa/Passports/Travel docs.

Therefore, GECOM and GECOM officials, while the law is being flouted, please understand the impact on yourselves and all your supports and all the citizens of Guyana. This is not a legal matter anymore, this now has become an economic concern. Supporters, please question your political parties and GECOM as to how they will help you to survive in they continue to ignore the law and sanctions are imposed.

Because of the disregard of the law for political power, we Guyanese, Afro Guyanese and Indo Guyanese have been divided. So as the old saying goes, ‘Divide and Conquer’. But let me ask you, if the Guyanese Politicians, Businesses, Workers and Citizens do not benefit…I wonder who will conquer us…and thus benefit?

Name withheld

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