Dear Editor,
I am writing in reference to a letter published by Stabroek News on April 4, 2023, authored by Gary Girdhari. The author sought to staunchly defend Chris Ram and described him as an outstanding accountant and attorney. Indeed, it is an indisputable fact that Chris Ram is a well-regarded chartered accountant.
It is quite perplexing, however, to fathom why it is that the author found my very mild and brief description of Chris Ram as one who seeks ‘relevance from time to time’ offensive. This is not a description without merit and justification of him, and arguably so. In this regard, I wish to publicly endorse two letters that were published in the Guyana Chronicle of April 1st, 2023, with the caption “Chris Ram has a chance to prove that he is not a fossil”, and on April 4th, 2023, with the caption “Chris Ram’s questionable actions”.
As a public commentator and advocate, Chris Ram is subject to be challenged because his analysis is not always impeccable. More so, since he is a longstanding, well-regarded public commentator, he is societally obligated to defend, correct, or clarify his publicly articulated postures―whenever he is so challenged.
In doing so, this lends credibility to the individual. It is also a responsible thing to do. I recalled reading a letter even by one his most respected colleague or associate, Mr. Anand Goolsaran, who published a letter of apology in the Stabroek News for an inadvertent assertion he made in one of his columns. Chris Ram should learn from his respected colleague and take a page out of his book.
As a public commentator and analyst myself, I am also subject to the aforementioned. It can be publicly verified that I have been challenged by a few heavyweights, namely the likes of―Rawle Lucas; former Finance Minister, Winston Jordan; Economics Professor, Kenrick Hunte, and Tom Sanzillo just to name a few―and all of whom I have rebutted and defended my positions and analysis.
It would be remiss of me not to highlight to the readers a few notable flaws I had identified in some of Chris Ram’s most recent analysis other than the foreign exchange matter which I have already dealt with―pending his response.
In a virtual discussion panel, Christopher Ram cited an incorrect figure representing the fiscal deficit obtained in 2022 of $193 billion. To arrive at this figure, I suspect that heused the 11.8% fiscal deficit reported by the Minister in the budget speech and using the (2021) GDP of about US$8 billion to calculate that fiscal deficit which was incorrect. Mr. Ram failed to observe that the fiscal deficit of 11.8% reported by the Minister is actually on the non-oil GDP figure for 2022 which stood at G$1.107 trillion, while the fiscal deficit relative to the overall GDP (2022) which stood at G$2.918 trillion is actually 4.52%, or $132 billion.This figure can be verified in the budget estimate (Vol.1). Additionally, the fiscal deficit projected for 2023 is lower than 2022 at $92 billion, $40 billion or 30% less than in 2022.
Another poor interpretation by Christopher Ram is in relation to the inflation rate where he posited that he does not believe that Guyana’s inflation rate is as low as reported. In Ram and McRae’s budget focus report, Mr. Ram contended that the 7.2% inflation reported for 2022 is the highest reported inflation in twenty years.
He cited in his report that the highest inflation rate reported in the last twenty years, barring the flood year in 2005 is 5.75% in 2021 which was attributed to imported price pressures, compounded by shocks in the agriculture sector.
Again, Mr. Ram is incorrect in the foregoing assertion in his report. The last twenty years would span the period 2003 – 2023. The highest inflation rate was actually obtained in 2007 at 14% (see budget speech 2008). This was attributed to “imported price escalation, particularly in fuel and food categories, unseasoned rains, and flood conditions in food-producing areas exerted upward pressures on domestic prices.
These were compounded by challenges in the transition to value-added taxes, where there was evidence that some retailers did not adjust for consumption tax transitional relief and input tax credits that they would have benefited from and merely added the value-added tax on top of their existing prices” (Budget Speech, 2008). For the readers’ benefit, when the VAT was introduced in 2007 at a rate of 16%, it replaced a consumption tax of 30% at the time.
Furthermore, while Mr. Ram may have his reasons known to him only why he does not believe that the low inflation of 7.2% obtained in 2022 which is projected to slow below 5% in 2023, he ignored altogether the impact of the Government’s intervention to combat inflation that would have credibly and tangibly led to this outcome.
To this end, as I have explained in my own budget analysis report, the Government implemented a suite of measures to combat inflation which is largely impacted by external factors within the global economy―that is, (1) imported inflation attributable to the fact that Guyana imports more than 80% of consumption goods, intermediate and capital goods.
This aspect of inflation is impacted by events in the global economy such as supply chain disruptions leading to cost-push inflation and demand-pull inflation, and (2) the inflationary impact within the domestic economy is also driven by strong domestic demand across all sectors as demonstrated by the vibrant double-digit growth in the overall economy and in the non-oil sectors. The total estimated cost of the COL measures implemented by the government in terms of direct cost to the treasury and foregone revenue to the treasury–is approximately $89 billion. This represents 11.3% of the total budget, 28% of tax revenues, and 43% of the NRF withdrawal to finance budget 2023.
Editor, permit me to end with an irony. In the same virtual panel referenced earlier that Chris Ram appeared on to discuss the budget 2023, he maliciously described the senior minister with responsibility for finance, Dr. Ashni Singh’s budget presentations in the National Assembly, as “dirty retail politics”.
Isn’t this disrespectful for him to do so? Dr. Ashni Singh is undeniably one of the most truly honorable and distinguished scholars in Guyana, and in his capacity as a senior minister in the Government.
Yours sincerely,
Joel Bhagwandin
Financial and Public Policy Analyst
