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Govt. has already taken US$1 Billion from oil account
Kaieteur News – The People’s Progressive Party Civic (PPP/C) government has already drawn more than US$1 billion from the Natural Resource Fund (NRF) since it began withdrawals in 2022.
This includes a US$607 million removal for the 2022 Budget and part of an approved US$1 billion for the 2023 budget. The initial half of this latter sum, a sizable US$400 million, has already been withdrawn in the first half of the year.
These substantial revenues originate from royalties and profit oil sales from ExxonMobil’s production in the offshore Stabroek Block, and they are being used to drive Guyana’s development. Guyana is rich in natural resources, not only significant oil and gas reserves but also a variety of minerals and vast forest cover. The oil boom is prompting an increase in infrastructure investment, supporting the development of additional industries, including agriculture.
However, despite all of this, and the World Bank recently reclassifying Guyana as a high-income economy, questions remain about whether this income will tangibly improve the lives of the Guyanese people. The World Bank states, “Guyana has emerged as one of the world’s fastest-growing economies with the development of its oil and gas sector. The government’s aggressive investment programme seeks to structurally transform the non-oil economy.
Nevertheless, Guyana’s increasing reliance on the oil and gas sector, a weak institutional base, and a fragile political environment pose significant risks to long-term development.”
It said despite Guyana’s resource wealth, Guyana faces substantial challenges. Around half of the population was living below US$5.50 a day in 2019, and issues of poverty and social exclusion are particularly severe in Guyana’s hinterland and among Amerindians. Limited access to basic services has been a persistent problem.
Recently, Guyana’s President Dr. Mohamed Irfaan Ali held a press conference, during which he pointed to significant achievements and plans by the government, including in health and education.
While the government has instituted many fruitful policies, which would undoubtedly improve the lives of many, the government’s methods of tracking and quantifying inequality – if it is using such a thing – are opaque. The government often rejects assertions that there is discrimination or unequal benefit from Guyana’s development.
However, the classification of Guyana as a high-income economy by the World Bank, coupled with the harsh reality of poverty, suggests that there are significant disparities in the distribution of wealth, which must be addressed as a priority.
The wealth inequality becomes even more striking when one considers the rural-urban divide. More than 70% of the working-age population resides in rural areas, engaged in sectors such as agriculture, forestry, and fishing, which are less lucrative compared to the oil and gas sector.
In light of this stark contrast between resource wealth and Guyana’s socio-economic challenges, the question persists: Will the spending of the oil money result in a better life for ALL Guyanese people – and when?
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