GUYANA GUARDS ITSELF AGAINST THE DUTCH DISEASE

Jan 22, 2023 News

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CONSUMER CONCERNS

PAT DIAL

Kaieteur News – Since the discovery of oil and gas in Guyana, many journalists and other public commentators, both locally and internationally, have been predicting that Guyana would inevitably be afflicted with the Dutch Disease. This is where all economic life becomes solely focused on the oil and gas industry, because of its lucrative revenue, neglecting other vital segments of the economy that once supported the country’s economy. When the oil resources become exhausted or there is a prolonged period of falling prices, the spectre of poverty would once again rise, and it will be exacerbated since all other industries would have fallen into decline.

The intelligentsia and those faced with managing the oil and gas industry are aware of the dangers of the Dutch Disease and have established a tightly protected Natural Resources Fund wherein the Oil revenues would be deposited and withdrawn with transparency.  Part of the funds would be kept for future generations, and part would be used for current activities which would include the long-desired injections of developmental capital into the social and economic life of the country.  Investments in economic life would include agriculture, mining and the creation of a modern manufacturing sector.   Social spending would be made in other areas, like raising the health and educational standards and subsidizing costs for citizens, increasing pensions and wages, and providing grants for cost of living relief.  The overall aim is to keep increasing the disposable income of citizens.

Before Oil was discovered, the country’s main earnings were derived from agriculture which included the sugar, rice and coconut industries, as well as food and fruit crops and fishing, mining which included the bauxite and gold industries, and all these industries, were always in the mode of struggle for investment capital.  Now that investment capital has become available, the policy should be to create a strong, sustainable and diversified non-oil economy.

Recently, Vice President Dr Jagdeo has said that agriculture is as important as the oil and gas industry, and in this offering we will review how agriculture is being strengthened and expanded to prevent any infection from the Dutch Disease: Last year, 7% of the Budget was allocated to the agriculture sector, which amounted to $38 billion.  This amount of funding was almost twice what was spent in 2020.

This money was invested into all aspects of agriculture: introduction and development of new crops; development of traditional areas of Agriculture; development of marine aspects; and investment in international cooperation and marketing.  The very able and proactive Minister of Agriculture, Hon. Zulfikar Mustapha has been providing an expert and forward-thinking leadership never before experienced in the Ministry.

Wheat flour is one of Guyana’s main imports and its shortage or absence lead to much suffering and the destabilization of the political life of the country.  The Ministry of Agriculture has been experimenting in Regions 8 and 9 with the cultivation of wheat and several varieties of tropical wheat have been imported from Mexico.  From all reports, the first crop of wheat would be reaped before year end.  If wheat could be grown economically, it would save the country much foreign exchange and may in time, graduate to an export crop like Rice.

There are a number of other new crops which have been introduced and these include soya and maize (corn) which have been planted along the Berbice River, and in a few months, 1000 acres of soya would be reaped.  Corn and soya are used for animal fodder and would be an import substitution.   A number of spices – ginger, black pepper, nutmeg and turmeric have been successfully grown and their acreage would be expanded.  Floriculture has been embarked upon with the cultivation of roses and in time the repertoire would include other flowers and orchids.  The late Boyo Ramsaroop had established a profitable flower export business and this resuscitation of Floriculture promises to be a profitable earner.

Coconut cultivation is being expanded to meet an insatiable world demand for coconuts and its byproducts.  One of the byproducts, coconut oil, is now comparable to olive oil and is preferred over olive oil by a growing number of consumers.  To improve the cultivation, 1000 Brazilian high yielding dwarf seeds have been imported and are growing.

In addition to coconuts, the traditional crops of rice and sugar were addressed.  Rice production increased and additional drying floors were constructed in Regions two and four.  A new market for packaged rice was found in Lebanon.  Sugar has begun its slow revival with the reopening of the Rose Hall, Enmore and Skeldon estates, employing approximately 1500 workers.  The mechanization of the factories is progressing and the expansion of the packaging plant at Blairmont will soon be completed.

Agriculture requires efficient drainage and irrigation as well as a number of good roads.  The pump stations and sluices throughout the agricultural areas have been rehabilitated and much work has been done on the roads, in particular the farm-to-market roads.

Fishing was supported and fisherfolk received grants of over $1.billion which they would use to rehabilitate their boats and engines.  Cage culture for fishing was introduced and eight cages were acquired.  Brackish water shrimp production increased and a prawn project was being developed at Onverwagt.

Livestock development continued with the importation of several hundred Black Belly sheep from Barbados, over 60 bulls from Texas for genetic improvement and a modular pig slaughtering and processing facility was established at Garden of Eden.

The Ministry of Agriculture personnel and other agriculturists attended a number of conferences in the Caribbean and Latin America, and were able to establish useful networks, some of which are with potential investors.  A Guyana/Barbados Food Terminal was established in Barbados which would assist in marketing Guyana’s agri-products.  Guyana was also accepted by CARICOM as the main supplier of produce for the Caribbean’s $5billion food market.

The successful efforts in agriculture over the last year are a clear indications that Guyana’s economy will remain diversified and profitable, and that the Dutch Disease would not be infecting this country.

 

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• CONSUMER CONCERNS, Dutch Disease, economy, fishing, GUYANA GUARDS, Mining, Natural Resources Fund

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