No one will be left behind – a promise our Government intends to keep

Dear Editor,
Many people still do not get how big this is. Come 2025, Guyana’s GDP will go up by 300 per cent, to 1000 per cent. This is gigantic. The lingering question is, can Guyana be the richest country in the hemisphere and potentially the richest country in the world?
It may sound far-fetched, but with a population of around 750,000, in per capita terms, Guyana’s wealth is set to skyrocket. The money would certainly be welcomed. Our country experienced high rates of unemployment and poverty between 2015 and 2020. That history carries a warning for all Guyanese. The discovery of big oil in other developing nations has exacerbated existing corruption, leading to the new oil wealth being squandered and stolen. It has become known as the oil curse.
However, Guyana follows another rhythm which has taken the last oil train and it doesn’t seem like it’s going to go wrong, at least in the short term: it will be the only country in the region that will avoid the recession in 2020.
The blame for this untimely miracle lies in 18 fields discovered, since in 2008 a consortium led by the US ExxonMobil and Hess in collaboration with the Chinese CNOOC began the first prospects in the Stabroek Block, almost 200 kilometres offshore. Twelve years later, pumping is already above 120,000 barrels per day and should exceed 700,000 by the middle of this next decade, matching the mark of countries such as Argentina or Malaysia.
The IMF took off its dire forecasts at the end of 2019, just before the exploitation of crude oil began, with a figure that surprised: Guyana, it said, would grow by 86 per cent in 2020. Almost a year later, that figure has fallen sharply, up to around 50 per cent. The pandemic has also taken its toll there, but the reality is still much sweeter than in practically any other corner of the planet: if that forecast is maintained, the Guyanese economy will double in size in just 24 months. One piece of data allows us to put into perspective the size of such progress: only in two of the last 70 years (1964 and 1965) has the South American country managed to grow at double digits and since 2013, it has not exceeded 5 per cent.
Guyana has “a unique opportunity for its economic development”. And yet the country, ravaged by a heavy history of corruption, still faces the challenge of harnessing it. It is a true race against time, as the PPP/C Administration promised “no one will be left behind” as we squeeze the goose that lays the golden eggs as much as possible before the definitive decline in oil, which many places before the end of this century.
Guyana’s President Dr Irfaan Ali and his Government know how to manage these new revenues to avoid macroeconomic distortions such as an appreciation of the real exchange rate that erodes its competitiveness and drives out private investment.
In the form of a powerful injection of fiscal resources: almost 15 per cent of the oil revenues will go to the public coffers and secondly, with hard cash for the population: to face the COVID-19 pandemic. It is amazing that our new PPP/C has immediately launched a COVID-19 relief fund of $25,000 (almost a third of the minimum wage) to each household affected by COVID-19 that would hardly have been feasible if the bags of oil had not been found.
But what the Guyanese really expect from oil remains to be seen: an improvement in infrastructure in one of the worst endowed countries in the region and, above all, more jobs. “It was very difficult to find work between 2015 and 2020, especially for men.”
But the optimism is already evident under the PPP/C Government, with the script being fulfilled overnight, where Guyana will go from being one of the poorest countries in South America to the richest in the area – and one of the richest in the world. We are about to embark on a stage of tremendous growth, something we have waited for a long time, but if the resources are not invested efficiently to stimulate our country, the risk of being infected by the so-called “Dutch disease” — which would mean that the oil fury would destroy other engines of the economy — is low in the case of Guyana. We were a poor country that mostly depended on agriculture and mining, which for the last five years under the APNU/AFC Administration, no other sector had flourished.
And yet the oil boom abruptly places it at a crossroads like our neighbour to the west, Venezuela, went through decades ago, now plunged into collapse after a long time of total dependence on crude oil. The parallelism is tempting: in four years, crude will go from having no relevance in the Guyanese economy to accounting for 40 per cent of the GDP.
In the local press, there has been a lot of talk about this in recent months: they fear the curse of oil. They do not lack reasons. The Government has rushed to decree a National Oil Day that they will celebrate for the first time this December 20 – presumably, still in the midst of the pandemic – when the first anniversary of the date on which crude oil began to flow from the Liza field.
There is, however, reason to believe that the many lessons available in recent decades have been learned: most of the money that leaves the seabed will go to a Sovereign Wealth Fund built in the image and likeness of the Norwegian or Abu Dhabian. As the PPP/C Government has insisted time and again, “no one will be left behind”. This is a promise our Government intends to keep.

Sincerely,
David Adams