Predictions of significant economic growth in Guyana due to the developing petroleum industry are being realized. Guyana’s Gross Domestic Product (GDP) in 2021 was US$8.04 B., representing a 20 percent growth rate. GDP reached the US$4 B mark in 2012 and increased to US$5 B in 2019. From US$8.04 B in 2021 the GDP is projected to grow in 2022 by 56 percent which will take its projected GDP to US$12+ B. Its per capita income grew from US$9,000+ to US$10,000+.
Increased spending projections for 2022 reflected the increased GDP for 2021. For example, spending by the Ministry of Works is due to increase from G$40 B in 2021 to G$96 B in 2022. It is due to increase from G$39 B to G$57 B for the Ministry of Health, G$25 B to G$33 B for the Ministry of Education and G$19 B to G$29 B for the Ministry of Agriculture. The total budget for 2022 was expected to be G$553 B. For 2021 it was G$383 B. Increased income in 2021 has, as expected, resulted in increased government expenditure in critical areas in 2022. The Ministry of Finance’s projections for 2022 are that the agriculture, forestry and fishing sectors are likely to expand by 11.9 percent, mining and quarrying by 99.9 percent driven by growth in the petroleum sector. Manufacturing, services and construction sectors are also expected to show impressive growth based on a 20 percent growth in the construction sector for the first half of 2022.
Amidst these impressive achievements, which are mainly due, it must be admitted, not to the genius of anyone, but to the growing petroleum sector, a World Bank report has found a poverty rate in 2019 of 48 percent based on earnings below US$5.5 per day. This means that persons earning less than G$1,500 per day, or G$10,500 per week, or G$42,000 per month are designated as living in poverty. The high rate of national poverty reflected a high rate of hinterland poverty, so that on the coast the rate would be expected to be lower. Nevertheless, the overall rate is high and may potentially reflect the economic ravages caused by the Covid-19 pandemic and its world economic consequences resulting in, among other things, a high inflation rate. The Government had advanced a G$4.8 B reduction in shipping charges, increased due to the pandemic, to reduce the rate of inflation, which is today having a positive impact.
In its report, “Headwinds Facing Post-Pandemic Recovery in the Caribbean,” the IDB noted that there is a broad economic consensus, reflected in a joint statement by the IMF, World Bank, Food and Agricultural Organisation, World Trade Organisation and World Food Programme, that cash transfers to the most vulnerable are more effective in cost and impact than untargeted food and energy subsidies. Following this policy, Guyana has advanced policies of targeted transfers to deal with immediate economic challenges. Old age pensioners saw increases for US$98 in 2020 to US$134 in 2022 benefitting 65,000 people. Public assistance increased from US$57 to US$67 per month benefitting 18,000. The “Because We Care” initiative to school children was resumed after the APNU+AFC Government had cancelled it and is now G$19,000 per child per year and will increase until it reaches G$50,000 per child per year. One-off cash grants of G$28,000 were given to pensioners, G$250,000 to sugar workers affected by the closure of the sugar estates and a similar sum to fisherfolk affected by the reneging of the Surinamese Government on its agreement to grant fishing licences to Guyanese. Had these admittedly modest cash transfers not been made, the poverty situation in Guyana would have been worse.
For the immediate period ahead, the Government needs to make a substantial impact on extreme poverty in Guyana by expanding the public assistance programme to include other categories of vulnerable persons, namely, the working poor living so far below the poverty line that they are sometimes unable to buy food. Small pockets of vulnerable communities living in extreme poverty such as at Parika Sea Dam, reported by SN, exist all over Guyana, particularly in the hinterland. The solutions are not only long term, such as employment and housing, but immediate. Food is needed today, not merely jobs next year and housing in coming years. It is not beyond the capacity of the Government to identify these communities and individuals, who are not always visible, and to advance a cash grant, even of modest proportions commencing from the budgetary allocation in the new year.
For the longer term trajectory, the resolution of the problems of stability and price in relation to electricity supply in the near future with the gas to shore facility, and extensive road network, will enhance Guyana’s capacity to industrialise, a long dreamt of development by the founders of modern Guyana. Unfortunately, national and international politics have stood in the way of Guyana’s development and, if given the chance, local civil society advocates, will derail this project, just as some helped to derail the Amaila Falls project. The people of Guyana have been held back for far too long, and have suffered grievous under-development, to allow Guyana’s grasp at the prospect of progress to slip.
(This column is reproduced with
permission from Ralph Ramkarran’s blog, www.conversationstree.gy)
