OPINION: Prez Ali in Berbice: a leader that has lost touch with reality

Last Updated on Sunday, 10 March 2024, 10:14 by Denis Chabrol

By GHK Lall

President Irfaan Ali went to Williamsburg, Corentyne, Berbice for the ribbon cutting for a new Republic Bank branch. The president spoke about loans, mortgages, investments, and more. He should have limited himself to ribbon cutting. It was a mouthful, according to a Demerara News article captioned, “More loans being repaid, borrowings increasingly diversified-President Ali” (March 09). When the president rolled into Williamsburg, he went on a roll, and rolled himself into a cigarette cylinder.

Indeed, Non-Performing Loans (NPLs) stand at a regional low of 2.8%, which is commendable. What is not so praiseworthy is President Ali’s boasting: “That is not accidental. That is because there is more money in the economy. That is because there is more disposable income. That is because people are in a better position to service their loans,” (see Demerara Waves article referenced earlier). I keep trying to lift up these leaders-Pres. Ali, VP Jagdeo, Ol Norton-and fail frequently. Yes, Mr. President, the level of NPLs has declined to 2.8%. What would be more revealing is how many of the loans that contributed to this wonderful state were personal loans, and what fraction were commercial ones. Also of interest is the quality of policies and practices that the local banking sector employed, which contributed significantly to the steep drop, this lovely 2.8% figure, in NPLs. I think that that could be more appropriately and honestly categorized as viable private sector initiative, rather than governance soundness.

I part company some more with President Ali when he said, “that is because there is more money in the economy.” No question Commander Ali. But where and to whom is the bulk of such money going? The hog of it has to be going to the runaway commercial/private sector, and President Ali knows this. When he makes these broad and bland (and beautiful) statements, as is now his norm, he must know that the regular citizen is not a direct beneficiary of what he asserted so loudly. The problem I have with President Ali is that he is so convinced that he has become the sole standing authority on things of this nature that the only voice he hears is his own. Further, President Ali is nothing if not given to overkill. For there he was like a snowflake bouncing merrily along: “that is because there is more disposable income.” God help Guyanese. Yes, skipper, but again in whose hands, sir?

Businesses are raking in cash, and can service loans, even pay them down aggressively. But regarding this increase in disposable income, there are some realities that contradict what the head of state represented. The minimum wage has been stuck at the same harrowingly unlivable levels where it has been for several years and counting; thus, those workers have little to no experience with more disposable income. For sure, the positives in the Guyana income tax threshold have their cushions but would have been negligible as to impacts on this category of worker. Most probably, they were not paying any income tax at all, given what they collect, so the threshold enhancement effect is lost on them; more disposable income is a stranger to them. Moreover, the ranks of tens of thousands of public servants, inclusive of approximately 14,000 teachers, have been left to cope with single-digit wage and salary increases for years. I contend that in a crippling cost of living environment, the combination of income tax threshold positives, meager pay raises, and other relief measures are not enough to put the kind of disposable income in the hands of regular Guyanese that could make a difference.

For starters, ordinary Guyanese lose consistently in the daily cost of living battles. Second, getting bogged down and defeated there, means that there is not an adequate level of disposable income in hand for them to participate in the loan/mortgage/investment markets. Third, the president noted the 22 percent increase in mortgages, and the greater repayment of loans, but again for whom and by whom. Fourth, investments increased to $299 million, and 68.7% are local in origin. With the private sector booming, it is reasonable to interpret what President Ali put on the table for investments is largely coming from local commercial sources. I think that the President got overenthusiastic, as is his wont, and would make us believe that the Guyanese masses are excited and vigorous participants. No, Dr. Ali, Guyana is still a tale of two countries, no matter the spin effort. The big boys, many of them close to the president, with the big plans and access to big money, are those cashing in and carrying on sweetly.

Last, teachers are in the throes of a war for a livable wage, and with an obstinate and heartless government (maybe, even president). It was Excellency Ali who spoke of $15M max as mortgages for teachers, and a reduced interest rate that his government was working towards with the banking sector. The truth of the matter is that NBS already had that $15M mortgage number among its offers, and most lending institutions had lower interest rates for eligible applicants. Whatever President Ali said his government was pushing for had to be something lower for teachers, and not what the banks already had in their mortgage menus. It would help to know the progress of that presidential promise. The bottom-line, Dr. Excellency, is this: at their present levels of compensation, most teachers (and public servants and minimum wagers) dare not show their face in a bank. Not enough substance (money). Not the required standing (money). And not enough ability to repay mortgages (money). After all his stirring percentages and billions identified in Williamsburg, Corentyne, His Excellency, President Dr. Mohammed Irfaan Ali may desire powerfully to do something about that, if only to prove he is real president and not a paper one. Or not a leader in a tightly packed suit packed with phrases that mean nothing to the little people.