Guyanese could get increased salaries, other improvements in 2020, the year of First Oil

Last Updated on Wednesday, 31 October 2018, 15:30 by Denis Chabrol

Ministry of Finance

Finance Minister, Winston Jordan on Wednesday hinted that government workers would receive salary increases when in 2020 when Guyana begins producing oil estimated to rake in about US$300 million in that year.

“I foresee improvements in the social and economic status of Guyana. I foresee progressive improvements in the human, cultural and every other developmental aspect of the country,” he told a news conference.

Asked specifically whether the planned improvements to the social, human and economic development of Guyanese would include increased wages and salaries. “…including everything but we have to take everything in context. We don’t want a situation where I give you two dollars and you lose three so one of the big things that has to happen is that production has to be pulled up, we have to diversify,” he said.

He explained that all of the US$300 million (GYD$60 billion) from Liza Phase One production of 120,000 barrels per day would be deposited into the Sovereign Wealth Fund and some withdrawn for economic development in keeping with the fiscal rules that would govern the fund.

That would be 50 percent of profit oil plus two percent royalty, but the actual earnings could be more if the world price moves up to about US$70 per barrel.

Cash set aside from economic development, he said would be withdrawn and deposited into the Consolidated Fund after converting American dollars into Guyanese dollars through the Bank of Guyana. “At no point will 300 million be available to the government for spending and the way how the 300 million become offline and it will go offline so it doesn’t create disturbances to the economy; so much money flooding the economy, few goods are around, large imports it suddenly attracts,” he said.

The Finance Minister cautioned against pumping too much money into an economy when production is low which could result in depreciation of the Guyana dollar and inflation.