Guyana’s economy will remain weak over the long term if improvements are not made

Jan 27, 2025 Letters

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Dear Editor,

The cost of a one-night stay at the Marriott Hotel is just over 100,000 Guyanese dollars on average, and can range between $80,000 and $140,000. Obviously, most Guyanese cannot afford to spend one month’s salary to spend one night at the government owned Marriott Hotel.

The cost of a one-night stay at the Hotel also makes it clear that the one-off grant of $100,000 being provided to all Guyanese over 18 years of age is quite unreasonable. It also brings into question the minimum wage requirements for the country. The Marriott in Houston is a fraction of the price of that charged in Guyana and ranges from $23,000 to $32,000 Guyanese dollars. A clear indication that our location is considered premium.

The average monthly salary at the Marriott in the USA for housekeepers is 288,000 Guyanese dollars, which allows a housekeeper to be able to spend at least 5 nights in the Hotel he or she cleans. If we take a similar approach to the Marriott in Guyana, the housekeepers would have to earn at a minimum $800,000 a month before taxes. If Guyana’s labour costs were to grow to this level our position would become less competitive, but the analysis does put into perspective how we should think about the minimum wage.

Even an equivalent rate to that which is in the USA of $288,000 would be welcomed in Guyana. Is it doable? Given the oil boom it is, but is it sustainable? The numbers on inflation at the Ministry of Finance is at odds with those of respected International Organizations. A thorough analysis of what a liveable wage in Guyana should be and must be completed and put forward as a proposal to improve the standard of living of the populace. At a minimum, the government should provide a minimum wage that is equivalent to that of a housekeeper in the USA. If it is determined that it is not sustainable over the long term, then it should be provided to every citizen over 18 years of age in the form of oil income payments that represent each individual’s share in the sector. This is the equivalent of G$3 million a year.

An amount which oil rich Guyana cannot afford. The current amounts gained in the sector allow for approximately 1 million Guyanese dollars a year for 500,000 Guyanese. Therefore, our wage bill cannot increase to the levels of the USA and our minimum wage has to reflect the reality of our economy.

If we estimate that the government can afford to distribute 20% of the earnings from the sector the amount would be the equivalent of two cash grant payments of $100,000 each. Is this the direction we wish to go in? That’s a salary increase of just over $16,500 monthly or an hourly increase of approximately 100 Guyanese dollars per hour. Goes to show that the wealth from the oil sector is not what we thought it was, and the economic realities of the average Guyanese is not able to keep pace with the increasing inflation as noted by non-governmental organizations.

What’s the solution? Increased earnings and lower taxes? Improving the top line is definitely a necessity. Reducing costs at the expense of government income has to be balanced with the projected economic growth that it will stimulate. The government must propose a stronger economic plan than will grow the economy in a way that is sustainable. The current plan is weak on earnings and inflation reduction measures. Making it another year of projected difficulties for those who are struggling to make ends meet. Hopefully, the budget debate process will bring forth ideas that both sides can agree upon to improve the economic prospects of the country.

One thing is certain, the aggressive spending of the funds in the National Resource Fund is not the best path forward. Those funds should be reinvested to ensure that it surpasses inflation and provides the earnings needed to better meet the needs of the nation. Maintaining the various benefits being put in place to increase disposable income and expanding upon the cash grant will require NRF growth beyond its current levels. The current poor performance over the life of the fund should be sufficient grounds to make the necessary changes to how the fund is managed. Norway has done an excellent job with their fund. Why hasn’t Guyana been able to perform at a similar level?

With concern,

Mr. Jamil Changlee

Chairman

(Guyana’s economy will remain weak over the long term if improvements are not made)

(Guyana’s economy)

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• Guyanese, Guyanese dollars, Marriott hotel, USA, wage bill

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