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Trinidad’s “economic meltdown” caused by overdependence on oil
– Guyana will avoid similar fate – VP Jagdeo
Kaieteur News – Vice President, Dr. Bharrat Jagdeo is blaming the economic troubles currently facing Trinidad and Tobago on the Dutch Disease.
Vice President, Dr. Bharrat Jagdeo
The Vice President made this statement during an interview with News Room, as he explained the Government’s plan to build a diverse economy to ensure the country avoids a similar fate.
“Look at Trinidad and Tobago, what they’re having now, an economic meltdown because they didn’t have the foresight to invest in the non-oil and gas sector. And so many countries have suffered this. It’s called the Dutch disease. So that is what we’re examining carefully.”
Since 2019, Kaieteur News pointed out the state its sister CARICOM country found itself in, trapped in years of declining growth. With dwindling oil production, the country had no choice but to start restructuring its economy away from oil.
Dr. Jagdeo said Guyana will have to ensure it utilises its oil money to build a strong non-oil economy.
“We have to build, utilise those funds to build the conditions for a progressive, prosperous non-oil economy so that when the oil disappears, we still have a booming economy with jobs for all of our people, unlike many of those countries that utilise all the money, not for the oil and gas sector or for welfare and didn’t build the fundamentals of a non-oil economy, so that when the oil and gas resources became depleted, they’ve ran into serious trouble.”
The Government intends to overhaul the Natural Resource Fund, which was put in place by the previous David Granger administration. The Vice President said the Irfaan Ali administration will come up with a programme for spending that will go through a parliamentary process.
“Any time we utilise funds from that pool of resources, they will have to go through a transparent process. And the process will be publicly identifying the project, saying how much money will be utilised from the fund for that project, ensuring that the auditor general is also aware of what, how the process is involved, it will require parliamentary approval.”
He said the process will allow scrutiny, where all the questions can be asked by the public before implementation.
He reminded that right now, the funds in the NRF are transparent, adding that that will continue.
Dr. Jagdeo considers the current amount in the fund, US$436M, to be de minimis (meaning negligible). So, it will not be used. However, his expectation is for the flow of money into the funds to increase significantly around 2025/2026.
Speaking on plans for use of the oil money, the Vice President said that though some say the money should all be saved, the Government intends for there to be a balance.
“We cannot have poor people; people who don’t have water and electricity and basic minimum, and not address those concerns whilst we are saving for intergenerational equity,” the Vice President said.
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