Guyanese are in for a rough ride in 2005 as political, economic and social conditions careen downhill with no one at the steering wheel. The wild card will be a pre-election year budget that raises the stakes for the ruling PPP/Civic and sets the stage for confrontation with the opposition PNC/Reform.

On the political front, preparations for the 2006 general elections will take center stage with the usual squabbling over electoral lists. Towards the end of the year, the PPP/C will begin to overemphasize its achievements to influence the electorate, only to come under severe criticism from the PNC/R for its failures. Arguments over power sharing will escalate, creating unprecedented political tensions, as the PNC/R attempts to bully its way into government. Fractures in both major political parties will emerge with the PPP/C facing its toughest challenge ever in cementing majority support.

Political tensions will lead to increased crime, heightening already tenuous conditions. The escalation in criminal activity will fuel renewed fear, especially among the East Indian segment of the population which has traditionally borne the brunt of criminal attacks. The police force, which is supposedly better prepared to deal with this problem, will be incapable of stemming the onslaught – partially because of its inherent weakness relative to that of the criminals and also due to intimidation from non-government sources.

Economically, conditions will continue to deteriorate, giving the opposition ammunition to attack the government. The IMF forecasts that the country will experience zero growth in 2005, exposing the government’s inability to stimulate growth, which by the end of the year would have averaged a meagre half of a percent since 1998, or roughly over the last two terms since the PPP/C has been in government. Yet the government would prophesize sustainable growth, even as the economy stagnates. Inflation, on the other hand, will remain relatively stable, with a weakening US dollar making imported goods cheaper.

The country will remain a beneficiary of debt relief, grants and handouts from international financial institutions – maintaining a trend that distorts economic reality in Guyana. As a result, the PPP/C administration will remain lackadaisical, basking in the false belief that the economy is running like a well-oiled machine, when in fact it is ticking like a time bomb. Nonetheless, its nonchalance will hurt its posture as the country's economic reality will prove otherwise.

In spite of ongoing relief, debt levels will climb relatively higher, albeit lower than in the PNC years – as the government will continue to borrow to finance its deficit, shifting the burden of repayment on future generations. The country will maintain its World Bank ranking as "severely indebted" and will come under increasing pressure from the IMF, which will tighten the screws on its spending habits.

The country’s ability to absorb donor funds will decline further in 2005, largely due to political tensions, crime and a dearth of professional and technical expertise, which could worsen during the year in anticipation of election year turbulence. More professionals may flee to foreign shores, aggravating the current personnel shortage.

Exports could suffer a further setback on the back of the increasing loss of preferential markets for principal exports, namely sugar and rice. The confluence of these factors would lead to a higher balance of trade deficit, as Guyanese will remain addicted to foreign goods. Talks of South American free trade will provide hope but Guyana will fail to emerge as a beneficiary of increased trade in terms of net exports.

Expanding the tax base – one of the IMF’s key dictates – will remain a challenge as Guyanese who have become accustomed to not paying their fair share of taxes will find ways to stymie government efforts to broaden its revenue base. Activities in the underground economy will increase, fuelled by corruption and the desire to evade taxes.

The key productive sectors – sugar and rice – will be left to the vagaries of the factors of production and the weather. Political tensions will add to production woes. Modernization of the sugar industry will not result in any substantial increase in production in 2005, while efforts to resuscitate rice will not have a significant impact because of the narrow concentration of efforts. The depletion of the country’s largest gold mine, Omai, and the accompanying decline in revenues will begin to hurt the economy in a significant manner but efficiency in the bauxite industry is expected to pick up with Omai taking over the reigns of administration.

Production of non-traditional agriculture will gain steam but growth will be hampered by continuing imports of substitutes. Plus, the overall neglect of agriculture will continue even though the government will boast of its importance to the economy. Positive drilling results for oil will raise hopes that this commodity could become the country’s "economic savior".

Poverty alleviation will of necessity remain the government’s central focus as the plight of the poor helps to bolster the government’s credibility in attracting funds to keep the country afloat. Nonetheless, while the standard of living of the poor will likely continue to improve, the rich-poor gap will widen, exacerbated by tax evasion and corruption, whose roots will sink deeper in the new year.

Political uncertainty will continue to hamper foreign investment, which is crucial to the country’s development. The government will make spurious claims of higher levels of foreign investment, which in reality would remain opaque to the average Guyanese. It is hardly likely that any significant investments will be made in the country this year.

The spread of HIV/AIDS will remain a threat to the survival of Guyanese. Largely ignored until a couple of years ago, programs to reduce the spread of the dreaded disease will become more prevalent on the back of foreign funding.

Guyana will remain an important hub for the drug trade and gain heightened notoriety as a major transshipment conduit. Although more drug busts will likely materialize, this lucrative illegal business will continue to flourish.

At a more micro level, the government will continue to make gains in areas such as education, healthcare, and roads, with concentration in specific geographical areas, instead of taking a more macro policy approach in pursuing development from a strategic standpoint. In similar vein, projects that benefit individual communities will receive emphasis for the sake of political appeasement heading into general elections.

The country will remain directionless due to the lack of a formal development plan. Although the decade old National Development Strategy will remain a reference tool, the Poverty Reduction Strategy Paper will guide all initiatives in the country, allowing the IMF to remain at the forefront in dictating Guyana’s future.

Administratively, the government will remain weak, with the "crisis of governance" becoming more serious on the back of challenges from the main opposition party and increased criminal activity in the wake of upcoming general elections.

On the whole, difficulties encountered in 2005 will cast a cloud over the country, leaving it in a much weaker position at the end of the year.