Jagdeo’s illogical rejection of the World Bank’s Commodity Market Outlook

Nov 09, 2024 Features / Columnists, Peeping Tom

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…Peeping Tom

(Jagdeo’s illogical rejection)

Kaieteur News- Vice President Bharrat Jagdeo’s recent comments on the World Bank’s Global Commodity Markets Outlook expose a troubling disregard for credible economic projections. When asked by a Kaieteur News reporter to respond to the World Bank’s report predicting an oil surplus in 2025—one that could potentially drive prices down and reduce Guyana’s oil take—Jagdeo’s response was not only dismissive but woefully shortsighted.

He said that those who are uninitiated often place a great deal of credence on these economic outlook reports produced by international financial institutions but for persons who are actually in the sectors, they pay only scant regard to these reports. He went to state that if you asked any of the oil majors about these commodity market outlook reports, they would probably not have heard of it.

Jagdeo’s comments reflects a shocking indifference to the very data-driven insights that should inform Guyana’s economic policies. And coming from someone who has oversight over key sectors in Guyana is mind-boggling

Jagdeo’s dismissive stance is baffling for several reasons. First, the World Bank’s Global Commodity Markets Outlook is one of the most robustly researched publications on commodity prices and trends, relying on the expertise of seasoned analysts and economists who meticulously track global demand and supply.

These reports are vital tools for governments worldwide, as they form the foundation of economic planning, guiding everything from fiscal policy to export projections. The World Bank’s Global Commodity Markets Outlook has garnered support for its timely analysis on key commodity trends that impact global economies. Experts and organizations have referenced it, especially as it reflects critical supply-demand dynamics and offers projections amid fluctuating energy and metal prices.

Yet, instead of recognizing the value of these insights, Jagdeo questioned their credibility, downplaying their relevance without offering any specific evidence or alternative sources. This sort of rhetorical evasion undermines the legitimacy of his own economic policies and raises questions about the transparency and reliability of Guyana’s commodity forecasting under his administration.

To further complicate matters, the World Bank’s projection is no mere guesswork. Oil prices have indeed declined substantially since April 2024, falling from approximately $91 to $72 per barrel, with an anticipated dip to $60 per barrel in 2025. This projected decline represents a nearly 50% drop from April’s 2024 high and would have far-reaching implications for Guyana’s oil revenue, despite the country’s low break-even price for its crude. Lower prices mean reduced earnings, which could shrink Guyana’s fiscal space and strain its budget. Ignoring these risks doesn’t make them disappear—it only leaves Guyana’s economic planners blind to potential turbulence ahead.

Jagdeo’s remarks also introduce a larger and more troubling question: what, then, are the sources his government relies upon for forecasting? If the World Bank’s comprehensive projections are disregarded, one is left to wonder what alternative analyses or data sources his administration consults in guiding the nation’s economic policies. Commodity market forecasts are indispensable for any nation that is resource-reliant, as they allow governments to anticipate revenue streams, budget accordingly, and mitigate against downturns. By questioning the reliability of established institutions like the World Bank without providing a substantive counterpoint, Jagdeo signals a disregard for evidence-based economic planning—an alarming stance given Guyana’s reliance on oil revenues.

If the Vice President has access to more reliable data, one would hope he would be transparent and forthcoming with these insights. Jagdeo’s experience and position should entail sharing credible alternative views. If such proprietary knowledge truly exists, why not make it available? Without transparency, his statements come across as ungrounded conjecture, hardly fitting for someone in charge of steering the nation’s economic future.

Moreover, Jagdeo’s comments dismiss not just the World Bank’s oil projections but by extension the credibility of forecasts for other key sectors as well. Guyana’s economy is not solely reliant on oil—rice, sugar, and gold exports also significantly impact revenue. If the administration is similarly cavalier about the World Bank’s projections in these areas, it could make uninformed or even reckless policy choices, risking the livelihoods of farmers, miners, and businesses that rely on accurate market forecasts.

Jagdeo’s reaction to the World Bank’s outlook is not just an ill-considered response to a single report but a symptom of a deeper problem. His dismissiveness betrays an unwillingness to engage with uncomfortable truths or prepare the nation for less-than-rosy scenarios. No credible economic strategy should be built on wishful thinking or gut feeling; it should be grounded in data and sound analysis. By ignoring the possibility of lower oil prices and the broader implications for the Guyanese economy, Jagdeo risks putting the country on a precarious path.

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

(Jagdeo’s illogical rejection of the World Bank’s Commodity Market Outlook)

 

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• financial institutions, Markets Outlook, Peeping Tom, World Bank’s Global Commodity

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