Oil money still not sufficient for Guyana’s development needs

Last Updated on Tuesday, 15 November 2022, 7:10 by Denis Chabrol

Finance Minister Dr Ashni Singh

Finance Minister Dr. Ashni Singh said the revenues being accrued from the oil and gas sector are still relatively modest, particularly considering the country’s developmental needs.

Speaking during the programme ‘Narrative’, Minister Singh said while the petroleum sector continues to grow and generate economic opportunities, the non-oil sectors must be developed to create a sustainable source of wealth.

“We have seen many examples around the world of countries that were entirely dependent on oil, and if the oil price dips or if the oil production dips for one reason or another, the country finds itself in trouble. We don’t want to be in that situation,” he was quoted as saying by government’s Department of Public Information.

Already, the minister stated, the government is focusing heavily on developing the transport infrastructure- roads, bridges, drainage, and improving connectivity, particularly in the hinterland.

Major infrastructure projects being undertaken include the Mandela to Eccles Highway, East Coast to East Bank Demerara Road link, the Linden to Mabura road construction, and the New Demerara River Bridge, among others.

“Access to our neighbours like Brazil and Suriname is still a challenge. We don’t have a bridge across the river to Suriname, we don’t have an all-weather road to Brazil, and that, of course, you know, some of those infrastructural impediments still weigh very heavily on Guyana’s ability to realise its economic potential,” Dr Singh said.

Currently, Guyana has around 11 billion barrels of proven oil reserves and is producing about 350,000 barrels of oil per day. By the end of the decade, Guyana’s oil production capacity is expected to be more than one million barrels per day.

The minister said the commencement of oil production presents the opportunity to remove the historic impediments to Guyana’s competitiveness and sustainable growth in the long term.

“So, we are using this period to address precisely those impediments to ensure we lay the foundation for long-term growth and broad-based growth far beyond oil and gas.

“We want to make sure that every region of Guyana has good connectivity, good roads so that they are not constrained by the impact of being isolated geographically from the capital city and major marketing centers,” he explained.   Another area being addressed is electricity cost which historically, has been a major issue in Guyana and continues to be a constraint to the emergence of the manufacturing sector.

In addition, emphasis is being placed on developing a competitive agriculture sector, as well as developing the health, education, housing and water, and social services sectors.

In the immediate term, Minister Singh said the government is concentrating on ensuring Guyanese can participate in the oil and gas sector, and in the transformation of the other sectors.

“We want to make sure that everybody is ICT literate, that they’re able to participate in like I said, the modern economy and we are already seeing returns to this. We already have in the oil and gas sector, literally thousands of persons drawn from across the country, drawn not only from Georgetown, not only from Linden, not only from Berbice but also Essequibo, working in oil and gas, directly in the oil and gas sector,” he said.

The overall aim, the minister said, is to leverage the country’s oil and gas resources to bring economic prosperity to all Guyanese.

The opposition coalition of A Partnership for National Unity+Alliance For Change (APNU+AFC) has been demanding that government increase the minimum wage to at least GY$150,000 per month due to the steep rise in cost of living. The Guyana government has cited increasing world prices for oil and wheat as major drivers of increased cost of living.

Already, the Guyana government has been subsidising the cost of fuel to the Guyana Power and Light and Guyana Water Incorporated as well as gasoline and diesel being sold by the state-owned Guyana Oil Company.