How to avoid the Dutch Disease

Apr 25, 2024 Letters

Dear Editor,

Developing countries such as ours need to avoid the Dutch Disease or else face the ignominy of wallowing in abject poverty while that same natural wealth abounds all around us. This is not an idle statement by any means, it is as real as noonday, and we do not have to go very far to witness the dire results of this failure.

The experiences of our neighbour Venezuela are ever before us, for a country that has the largest deposits of crude oil in the world, however, the path chosen by successive administrations have seen a downward spiral in the state of affairs of that country. The reason for this is a country stricken by the Dutch Disease!

Now, what is the dreaded Dutch Disease? Dutch Disease is an economic phenomenon, where the rapid development of one sector of the economy (particularly natural resource) precipitates a decline in other sectors. Closer home, that definition is reflective of what have started here in Guyana and for which we were well on the way to being bankrupt in a few years. We’ve seen the closure of four (4) productive sugar estates and a huge downgrade in the agricultural sector overall. We are talking about a major contraction of traditional crops that have sustained this country throughout its formative years, only to shut them down to focus on the developing oil sector.

Placing so much emphasis in one sector virtually starves others, especially those in the income generating or productive sectors. Other areas of gross mismanagement can be seen in the PNC Led Coalition’s fueling monies into non-productive areas such as a ministry of social cohesion and Durban Park. These were ministries set up to siphon off monies into dubious avenues, in other words, these were “slush funds” set up to open the floodgates of corrupt government transactions. To answer the question why many countries, go down the crippling path of underdevelopment, the above data expresses this fact.

Even the use of first oil monies was shrouded in mystery during the Coalition Years, which was a clear sign to this nation of what was to come, with no vision as to where this country was going, meant that Guyana was in the welcoming arms of an economic disaster and headed for the dumps. The combination of poor planning and corruption was a recipe for disaster, and a sure curse of the Dutch Disease.

Contrast the Coalition’s approach to that of the present-day PPP/C Government, and we see a marked difference, there is the expansion of the traditional agriculture sector while there is the introduction of improved, genetically adaptive animals and plants. This augurs well for the future as we are assured that we would not be under the curse of the dreaded Dutch Disease.

Further, every dollar earned from sovereign wealth is public knowledge, as well as, the developmental works financed from that sovereign wealth is also in the national domain. It therefore increases public trust in the government, that their interest is in good hands.

Finally, all sectors must develop at a simultaneous pace, no one sector being more highly favoured than another.

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