Guyana being fastest growing economy in the world nothing but a mirage

Jul 21, 2022 News

– Dismal non-oil growth tells the truth – former Finance Minister

By Kiana Wilburg

Kaieteur News – With two oil ships, namely the Liza Destiny and the Liza Unity in operation and producing approximately 300,000 barrels a day, Guyana’s growth rate is forecast to jump from the initially projected 47.5 percent to 57.8 percent. This was recently noted by Senior Minister with responsibility for Finance, Dr. Ashni Singh who has also stated that Guyana’s pace of development and production makes it one of the fastest growing economies in the world.

Former Finance Minister, Winston Jordan

Many institutions such as the International Monetary Fund, the World Bank, the Inter-American Development Bank and even the Caribbean Development Bank have agreed with this perspective.

However, former Finance Minister, Winston Jordan has categorically stated that he is one who does not fall into this category. For him, the mantra that Guyana is supposedly the fastest growing economy is nothing but a mirage, adding that the real truth can be found in an examination of the dismal performance of the non-oil economy.

Speaking on the management of the economy while a guest on GlobeSpan24X7, Jordan said, “Over the last two years, the government has literally destroyed the tax base and it is now in a scenario where it has run out of options in an economy that is supposedly the fastest growing in the world but that is a mask.”

Senior Finance Minister, Dr. Ashni Singh

Jordan said in 2020 when the economy grew by 43.5 percent buoyed by a full year of oil production, the non-oil economy contracted by 7.3 percent. “So it would have declined from 5.2 percent in 2019 to a negative 7.3 percent even though the overall growth of the economy was a positive 43.5 percent,” expressed the economist.

He further noted that in 2021, growth was 20.9 percent while the non-oil economy’s growth was pegged at 6.1 percent. “So you will have to compare the 5.2 with the 6.1. This year, the economy is supposed to grow 57.8 percent and the non-oil is projected to grow about 7 percent but that will have its own challenges because rice, sugar performed dismally at half year. So those non-oil figures will have to be reviewed,” expressed the former Finance Minister.

FIRST QUARTER REPORT

According to Bank of Guyana’s 2022 first quarter report, the rice and sugar industries experienced declines in production by 53.1 and 47.7 percent, respectively. The institution explained that the substantial decline in the production of rice can be attributed to the effects of the flooding in 2021, which prevented farmers from sowing all available lands for the first crop of 2022 along with higher input costs.

Kaieteur News understands that sugar production decreased as a result of the halt on grinding at the Uitvlugt sugar estate, caused by mechanical issues, which impacted production, as this estate was responsible for 25 percent of output.

NOTE TO READERS

With respect to stats provided by the former Finance Minister for 2021, Kaieteur News’ perusal of the Bank of Guyana records showed that the Guyanese economy registered real oil and non-oil Gross Domestic Product (GDP) growth of 19.9 percent and 4.6 percent respectively, despite the devastating mid-year floods that affected the agriculture sector and the gold industry.

It should be noted as well that during the 2020 period, many sectors such as rice and forestry were hard-hit due to lock-down measures and restrictions that followed from the COVID-19 pandemic.