Now that Guyana is an oil-producing state, there is an expectation by many that since we have “the highest growth rate in the Region, if not the world”, then all Guyanese should be “rich”. We should be living like “Dubai”. But we should realise that when Dubai struck oil in the 1960s, they were as poor as we were but took concrete steps to develop their economy.
As the oil revenues generated from the approximately 14.5 per cent of the oil produced have become available since 2020, the PPP Government – which was democratically elected to office – has unfurled a multi-pronged developmental plan to raise the standard of living. As in a functioning democracy, they had outlined their plans in their 2020 Manifesto so that all citizens, not just those that gave them a majority know of these plans. They have focused on maintaining and improving the social and other services that have been traditionally provided free of cost to the citizens. Medical care, education from nursery to secondary school (and now to University), old-age pensions, etc. They are also diversifying the economy by starting with a structured local content programme to ensure employment and profits from the oil sector; securing cheaper energy through the Gas -to-Shore project; building infrastructure for industrialisation and opening up the interior savannahs for large scale agriculture as part of a Caricom 25X25 initiative to reduce importation of foods into the Region by 25 per cent by this year.
At the same time, however, the Opposition has criticised the Government for not accepting their proposal for a modified “Universal Basic Income” (UBI) programme involving an annual cash transfer to the tune of US$5000 (over GY$1 million) to each family in Guyana. With there being approximately 220,000 families in the country, this payment would amount to US$1,100,000,000 (US$1.1 billion) annually. These programmes have been widely debated and dubbed “utopian” by many and no country in the world has introduced them. The arguments against it are that it would create inflationary pressures that would wipe out much of the benefits while creating stubborn structural disincentives for beneficiaries to work, thus generating less tax collections to create a vicious cycle. There would also be the question of sustainability since it is projected that our oil will be depleted in approximately 30 years. Trinidad and Tobago, for instance, is presently experiencing the withdrawal symptoms of oil depletion in an insufficiently diversified economy.
On the other hand, proponents of UBI insist that the infusion of income would not only assist in poverty reduction but actually spur economic growth since recipients would have invested in their education and skills that would lead to higher-paying jobs. But in Guyana, the Government has already launched the Guyana Online Academy of Learning (GOAL) that has awarded over 20,000 scholarships and intends to continue this indefinitely. With the latter programme in mind, even in the absence of a UBI, the increased opportunities that are opening up from the local content opportunities and the opening up of the hinterland should assist in creating growth outside of the petroleum sector.
However, this educational thrust will redound to the benefit of locals only if we can stimulate the spirit of entrepreneurship in our local population so that foreigners do not snap up the opportunities from under our noses as is presently occurring even in such a mundane area as upscale coffee joints. As one expert in the field noted, “identification and opportunity exploitation appear to be two essential moments of the entrepreneurial process”. The first is cognitive when opportunities to earn profit are noticed. The latter, however, is critical: taking the actual risks to engage in developing and selling the product or service.
Trinidad has shown that while higher income may lead to a greater willingness to take risks – which is one of the sine qua non of entrepreneurship – it may not be as widespread as it turns out to be to create a sustainable economy. Luckily, entrepreneurship can be taught; studies have shown that culture may play a role in stimulating entrepreneurship and in ethnically-plural societies, this may skew the benefits.
