Govt taking careful steps to avoid overspending, Dutch Disease – Pres Ali

…says disparity in public, private sector wages would create inequality

Cautioning that Guyana must be careful to avoid overspending now that the country has oil revenue, President Dr Irfaan Ali has assured that his Government is taking steps to avoid the Dutch disease.
While the Government has been spending some money on cash grants and other assistance for vulnerable sectors, there have been calls for more assistance to be provided, specifically for public servants.

President Dr Irfaan Ali

These calls have been made in the context of Guyana’s newfound oil wealth. According to President Ali, however, Government has to be careful, lest it overspends and succumbs to the Dutch disease. At the time, the President was speaking to the graduating class of 2022 of Nations University, when he dealt with the topic.
“We cannot use the wealth to balloon our current expenditure. Because if we balloon our current expenditure, then you have to find revenue to sustain that in an annualised way. And that is what leads to the Dutch disease.”
This year’s massive $552.9 billion budget, the largest in the country’s history, was the first financed with oil money. And currently, preparations are ongoing for next year’s budget, during which it is expected more oil money will be used.
Only last week, President Ali announced an eight per cent retroactive increase for all public servants. But according to the Head of State, if public servant salaries greatly exceed that of the private sector, this creates an imbalance in society.
“If you use in a major way, the resources to only apply it to Government workers, then you’re ignoring the fact that there’s a private sector. And if there’s a mismatch, between the private sector and the Government, then that creates a level of inequality and disparity. Inequality and disparity are not only within communities or groups. You can create it by your own financial and economic measures,” President Ali said.
Dr Ali, meanwhile, told the graduates that they are living in a country that will be “second to none” by 2030 and beyond. He therefore urged them to prepare themselves to be part of the massive transformation taking place in Guyana.
On Thursday last, President Dr Irfaan Ali had announced an eight per cent salary increase for all public servants as his Government continues to implement measures to improve the lives of all Guyanese. He also explained that this increase will be retroactive to January 1, 2022.
“My Government will be paying an across-the-board increase of eight per cent to public servants, teachers, members of the Disciplined Services, constitutional office holders, as well as Government pensioners,” he declared.
According to the Head of State, work will commence immediately to ensure that this increase is processed and paid to eligible employees together with their December salary. In addition, the President also indicated that further announcements will be made regarding specific categories of public sector employees.
“I have instructed those options be identified for adjustment to the salaries paid to a number of specific categories of public sector employees. These include, in the first phase, ranks of the Police Force, Prison Service, and Fire Service.”
“Additionally, a similar exercise is currently being conducted and recommendations being made in relation to specific categories of employees in our public healthcare system, including nurses, interns, doctors, and other healthcare professionals,” the Guyanese Leader said.
President Ali posited that his Administration continues to place high value to the hard work that Government employees do every day in delivering services to the People of Guyana. To this end, he contended that the People’s Progressive Party/Civic (PPP/C) regime is resolutely committed to ensuring that the lives of all Guyanese are improved steadily in a tangible and demonstrable manner as they work towards realising national prosperity for the benefit of everyone. (G3)