GUYANA MODEL OF DEPLOYMENT OF OIL REVENUES WIDELY RESPECTED

Aug 27, 2023 Consumer Concerns, Features / Columnists, News, Waterfalls Magazine

CONSUMER CONCERNS

By PAT DIAL

Waterfalls Magazine – There is an old saying that ‘Money is the root of all dissension’. This has become an actuality now that Guyana has become a country earning substantial oil revenues. There have been numerous voices demanding how the funds should be utilized. Three proposals which have been discussed publicly are: Firstly, that all the oil revenues should be periodically distributed to every citizen at a million dollars each time; secondly, that the bulk of the revenues be similarly distributed with a small proportion being spent on social services; and thirdly, that a part of the revenues be kept as reserves, with part spent on the development and maintenance of social services such as health, education, the judiciary, increasing salaries and pensions among other things. Part of the oil revenues some have suggested, be devoted to investing in the developing the non-oil sectors of the economy.

The present Government has adopted the third alternative. They have been meticulously putting aside reserves and have been spending on social projects, such as health, education, judiciary, pensions, and salaries, with the major part of spending being directed to investment in developing the non-oil sectors of the economy. This commitment to diversification of the economy is intended to guard against the almost magnetic pull of becoming dependent on oil. Countries which become dependent on oil suffer great hardship and even poverty when the oil reserves become depleted or when oil prices fluctuate downwards. This scenario is known as The Dutch Disease. Several countries have been afflicted by the Dutch Disease; Venezuela, Guyana’s neighbour being one of the most prominent.

Guyana, in addition to the social spending as mentioned above, has been heavily investing in infrastructure, agriculture, mining and forestry.

The various new roads being built, the repair of older roads and the building of new bridges are interconnecting the country. For the first time the interior and the coast are being linked. The privately owned aeronautical industry is being supported with the repair and construction of new airstrips countrywide. This interconnectivity is providing the foundation for the economic take-off of the country. Indeed, without the new infrastructure, the other aspects of the Economy which are being developed could never attain full fruition.

Agriculture is the other aspect of the economy on which the most investment is being made. The Rice Industry is being successfully expanded and is even helping Trinidad to resuscitate their Rice Industry. Sugar, which was almost consciously destroyed some years ago, is beginning to have a new lease of life. Honey, which is a profitable niche market, is fast growing as new crops such as wheat, millet, soya and corn are being grown. Livestock with sperm from Frisian sperm banks and Blackbelly sheep from Barbados are improving this sector. Fish and shrimp farms are being developed and many fishermen, with government help, have renewed their boats and engines. And there is a Caribbean market of six billion dollars to absorb all of Guyana’s agricultural products.

The manufacturing industry such as food packaging, production of spices, jams and preserves, wooden furniture for a niche international market and even some types of garment manufacturing are already being entered with the expectation of the cheaper power, which will come with the “Gas to Shore Project” in less than two years.

Mining, especially for gold has been increasing. Quarrying for stone and sand has also been expanding, with the growing demands of the construction industry and the infrastructural developments. The Forestry industry has been expanding at the same time paying careful attention to Low Carbon Development Strategy, from which Guyana has been earning millions of dollars.

The economic and developmental model as a new oil producing country which Guyana has been pursuing, has firmly avoided the Dutch Disease, kept inflation under control and would still be a prosperous country when the oil resources would have been depleted.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)