Guyana heading further into poverty despite oil production

Jul 30, 2023 News

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…aid will reduce as country now ranked as high income – Food For The Poor says

By Davina Bagot

Kaieteur News – Eight years ago when U.S. multinational oil conglomerate ExxonMobil announced the discovery of oil in Guyana’s territorial waters, the country thought its fortunes had changed and the lives of the poorest citizens especially would be transformed.

No one can debate that it would take some time before the wealth reaches the most depressed in the country, but the popular question is now ‘how soon’ this would happen.

While one side of the political divide believes in cash transfers to uplift the country’s population, the other side is adamant that investment must be made in the health, education and infrastructural sectors to boost the quality of life for Guyanese.

In the meantime, however, citizens continue to complain about the daily hardships, particularly as it relates to the cost of living in the country.

This year, the National Assembly approved $5B to ease the cost of living crisis, but just on Thursday; Vice President Bharrat Jagdeo revealed that the allocation has not yet been touched.

With revenue now flowing to the Natural Resource Fund (NRF) or the oil account, some sections of society believe that Guyanese should benefit more from their national patrimony.

In 2022, government for the first time utilized a portion of the oil revenue to fund the national budget. Some US$607.6M was transferred to the national coffers to be spent.

This year, another US$1B was approved to supplement the state’s development agenda; but despite the commencement of oil revenue spending, non-governmental organizations such as Food For The Poor, still sees a great need for food and other basic necessities among impoverished Guyanese.

FFTP is perhaps the largest donor organization in Guyana, assisting thousands of citizens all across the country each year through its distribution exercises and more recently, sustainable development projects to help create livelihood opportunities for Hinterland villagers.

Chief Executive Officer (CEO) of FTTP Guyana Inc., Kent Vincent in an interview earlier this week told Kaieteur News that notable efforts have been made by government to improve the roads, bridges and housing availability, however, the need for food and other basic items remains urgent in some instances.

The CEO was specifically asked whether he has observed a shift in the country’s poverty level since oil production commenced in 2019 when he explained, “We can’t confirm that the levels of poverty have been reducing. We don’t have the statistics to say that but we are aware of the greater need in the interior locations, so we have sort of- while not foregoing the needs out here in the easy to reach areas- we are going a bit more into the interior locations where there is a great need at the moment.”

The FFTP Executive is hopeful that in the next five years or thereabout, the living conditions might change for the better for the poor population in Guyana. In the meantime, he said “I can’t confirm whether there is any major change.”

According to the CEO, FFTP is still offering whatever assistance it can as it continues to see investments to improve the country’s infrastructure. He was keen to note that while strides are being made to improve access to housing, this still presents a challenge to the population that is deeply impoverished. This is so as this grouping would still encounter challenges when trying to access a loan to start construction for instance.

The organization has been offering assistance to construct affordable homes for families who already own a plot of land the CEO pointed out, while noting that there are numerous families across the country that may still be squatting in homes on the verge of collapse, since they cannot afford a land.

“The changes, this (oil) started recently…we see infrastructure, housing and so on and the government is working on other areas but we still work with people who reach out to us in the communities we serve, and the migrant community is growing too so there is a need there also,” Vincent related.

Reducing aid

Earlier this month, the World Bank reclassified Guyana as a high-income country, as a result of its thriving oil sector.

The World Bank’s 2022 gross national income (GNI) index covers the financial year 2024 (July 1, 2023- June 30, 2024). According to the institution, “The large increase in Guyana’s Atlas GNI per capita is driven by the increasing volume of oil and gas production which more than doubled in 2022. The nominal increase was further amplified by higher oil and gas prices, and despite strong increases in outflows of primary income abroad, Guyana’s nominal GNI jumped 86.2 percent leading to a 60 percent increase in Atlas GNI per capita.”

Previously, Guyana was a considered a middle-income country.

As a result of this change, FFTP foresees greater challenges in accessing aid for the country. The CEO explained, “Funding might be problematic at the moment as you know the World Bank just recently declared Guyana as a high-income country. This will affect donors giving towards projects here in Guyana.”

Vincent said he believes Guyana will now, more than ever, need the support of its corporate society to assist those in need.

He pointed out that a majority of FFTP projects are funded by overseas donors. “FFTP Inc. is in Florida but it’s going to become a bit more difficult now for them to source that funding for Guyana which has been deemed a high-income country,” the CEO noted.

He added, “When people Google Guyana and see this new status, they will doubt our need for funds and instead direct it to other countries that may seem in greater need and FFTP Inc. works more than 17 countries in Latin America and the Caribbean, so donors will now say I want my money to go here instead, so it might become a bit more challenging for us so that’s why we are reaching out to corporate society.”

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• CEO, FFTP Guyana Inc, Kent Vincent, oil, production

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