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”, all Guyanese should be “rich”. We should be living like “Dubai”. But oil was struck at a time when almost half of our population (48%) were living on a daily income of below US$5, which qualifies them as “poverty stricken, based on the World Bank’s categorising of us as an emerging “Upper-Middle Income Country”. That in itself, however, is an improvement from two decades ago, when we were a ‘Highly Indebted Poor Country’ in which 36% were living on less than US$2.15 daily.
As the oil revenues generated from the approximately 14.5% of the oil produced become available since 2020, the PPP Government that were elected to office have unfurled a multi-pronged developmental plan to raise the standard of living. 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 soon 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, and building infrastructure for industrialisation; and opening up the interior savannahs for large scale agriculture as part of a CariCom initiative to reduce importation of foods into the region.
At the same time, the Opposition have criticized 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 to each family in Guyana, to address the widespread poverty without being accused of discrimination. With there being approximately 220,000 families in the country, this payment would amount to US1,100,000,000 (US$1.1billion) annually. These programmes have been widely debated and dubbed “utopian” by many. The arguments against them are that they 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 collection, 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 thirty 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 thousands of 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 up-scale 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, and 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 a sine qua non of entrepreneurship – it may not be as widespread as it out to be to create a sustainable economy. But even more insidiously, Trinidad has shown that culture may play a role in stimulating entrepreneurship, and, in ethnically plural societies, may skew the benefits.