In 2020, just months after the PPP assumed office, the World Bank issued first Systematic Country Diagnostic (SCD) for Guyana dubbed, “A Pivotal Moment for Guyana: Realizing the Opportunities”. While the Opposition has trenchantly criticized the development program unfurled since 2020, it might be useful to use the SCD as a benchmark to objectively evaluate it. We offer the WB’s summary below.
“An SCD is an assessment of the constraints a country faces and the opportunities it can take to accelerate progress in reducing poverty and improving living standards for its people. The SCD draws on findings of research done by the World Bank Group and benefitted from feedback received during consultations with key stakeholders in Guyana.
Guyana (has) abundant natural resources, but…a legacy of jobless growth, and deep geographic disparities and inequalities. In 2018, Guyana’s national poverty headcount rate was among the highest in the Latin America and Caribbean region at 43.4 percent. Within that, there are regional differences, with poverty rates highest in the interior region, where communities have limited access to economic opportunities, healthcare, and public services. Over 80 percent of the country’s poor live in rural areas. Economic and social factors have contributed to high emigration rates, with 39 percent of all Guyanese citizens currently residing abroad. Among those with a tertiary education the rate is even higher.
Oil revenues are expected to be large, but for this to translate into achieving long term and sustainable growth, that reaches all levels of the population, good governance and strong public institutions are vital. Guyana must improve its human capital development and health indicators, reduce poverty levels, and balance growth with environmentally sustainable practices. As the government begins to develop the oil and gas sector, ensuring governance mechanisms that adhere to international environmental and social standards is critical to avoid many of the issues other resource-rich countries have faced.
Several priority areas and related policy actions (are suggested) to achieve these goals: Macroeconomic stability and environmental sustainability: This includes balancing fiscal spending with the absorptive capacity of the economy and managing the exchange rate. Mitigating fiscal risks arising from climate change is important as well as ensuring environmental sustainability. Boosting investment in climate-resilient infrastructure and adherence to environmental protection standards can facilitate more sustainable development and urbanization.
Good public sector governance and effective management of the petroleum sector: Addressing governance challenges will be necessary to expand access to high quality public services and increase government transparency and accountability, while sustainably managing the oil and gas sector and financial assets. It will also be important to encourage greater public engagement and more collaboration among government agencies. This involves strengthening the public sector to deliver services and ramping up public spending on resilient infrastructure with environmental protection.
Economic transformation and job creation: Employment rates are already relatively low in Guyana, with a 54.5 percent labor-force participation rate in 2017, lower than the regional average. Currently, limited competition, a weak business climate, and small, underdeveloped markets are some of the challenges limiting employment. Policy actions should aim at improving the business environment, maintaining public sector employment at sustainable levels, and leveraging untapped human and natural capital.
Human capital investment: Large-scale investments in education and health, along with infrastructure, are needed to increase the opportunities for Guyanese people, including: full coverage of basic services like improved water and sanitation, roads, electricity, primary and secondary education, healthcare, and financial services. Such full coverage of essential health and education services needs to address the country’s geographic disparities.
Future policy actions recommended include strengthening the social protection system, achieving universal health care, and quality systems for tertiary and technical education.
Measures that support environmental sustainability and green growth in Guyana should underpin all these policy areas. In addition, basic conditions vary greatly across different regions of Guyana, so public policies should be adapted and prioritized to overcome these regional deficiencies and ensure successful development outcomes. The SCD suggests addressing the geographic disparities by identifying unmet development goals per region and prioritizing basic service delivery and infrastructure that match the needs in each region to support the social and economic well-being of all Guyanese.
