The experience of countries around the world shows that closing the gender gap and reducing inequality results in better social and economic outcomes, and promotes widespread prosperity. Unfortunately, in Guyana, there is a reversal of progress made in these policy priorities, according to according to recently released data by the World Bank. This is likely a contributing factor to the country’s current social and economic problems.
Guyana: Finding Oil and Real Prosperity Are Not the Same, Note the Differences and Beware of the Dangers.
The discovery of oil and the potentials for economic growth and improved standard of living are good news for Guyanese families, workers, and businesses. However, the benefits of oil wealth do not automatically flow from the state’s treasury to families, businesses, and the economy. Like oil companies which have to assembly rigs, refineries, transportation, and distribution systems to move oil from the earth to the pump, so too must the government take necessary steps to ensure oil wealth flows from the state treasury to the kitchen tables of families, pocket books of small businesses and grow the economy.
Less Than 18 Percent of Government Transfers to the Regions is for Supporting Agriculture and Infrastructure – Key Economic Sectors
The failure to adequately invest in key sectors of the economy limits economic growth and is likely to further exacerbate current economic uncertainty and prime the economy for a downward spiral. The government’s budget for 2017 includes fiscal transfers to the 10 Administrative Regions totaling more than $35 billion. Of this total, less than 18 percent is allocated for supporting the agriculture sector and for building and repairing critical infrastructures necessary for creating a strong economic foundation for sustained growth.
Fiscal Health: Government’s Budget for 2017 Puts Additional Burden on Households and Future Budgets on an Uncertain Path
Despite the increase in expenditures, the budget makes it more difficult for low-income families to overcome poverty and achieve economic independence. Changes in the country’s tax laws shift more of the tax burden to households and disproportionately burden low-income families. Current expenditures alone consume all general revenues, limiting the sources of funding for major investment to grants and new debts. These findings raise key questions as to whether current allocations represent the best use of public funds and the implications of the current allocations and spending levels on future budget decisions.
An unemployment rate of 11.4 percent represents a sizable portion of the labour force without the opportunity to pursue their own economic prosperity and contribute to the creation of wealth in the economy. Lawmakers concerned about improving the economic and social well-being of families and economic growth should adopt policies that would stimulate the economy, encourage private investments and create job good paying jobs.
Unbalanced Growth: Guyana’s Manufacturing and Agriculture Sectors Declined by 10 Percent Each, Despite Economic Growth of 3.3 Percent in 2016
The significant decline in manufacturing and agriculture output and the slowdown in services sector activities indicate a major shift from stable growth to more high-risk growth in the economy. Despite a positive overall growth, output in the manufacturing and agriculture sectors dropped by 10 percent each. The government should adopt policies to restore consumer confidence and thus private consumption spending, and attract new investments to boost growth.
Guyana’s Economy Ranks Almost Last Among CARICOM Member States DOWNLOAD PDF The size of an economy is measured by the total value of all goods and services produced in a year – also called Gross Domestic Product (GDP). GDP per-person (also called GDP per-capita) is total GDP divided by the population. The value of…