Speaking on the management of the economy while he was a guest on GlobeSpan24X7, Former Finance Minister Winston Jordan said, “Over the last two years, the government has literally destroyed the tax base and it is now in a scenario where it has run out of options in an economy that is supposedly the fastest growing in the world but that is a mask.”
For him, the mantra ‘Guyana is the fastest growing economy in the World’ is nothing but a “mirage,” an optical illusion. He urges Guyanese to examine the Bank of Guyana mid-year report, adding that the truth can be found in the dismal performance of the non-oil economy.
Jordan said in 2020 when the economy grew by 43.5 percent buoyed by a full year of oil production, the non-oil economy contracted by 7.3 percent. “So it would have declined from 5.2 percent in 2019 to a negative 7.3 percent even though the overall growth of the economy was a positive 43.5 percent,” the economist stated.
He further noted that in 2021, growth was 20.9 percent while the non-oil economy’s growth was pegged at 6.1 percent. “So you will have to compare the 5.2 with the 6.1. This year, the economy is supposed to grow 57.8 percent and non-oil is projected to grow about 7 percent but that will have its own challenges because rice and sugar performed dismally for half a year. So those non-oil figures will have to be reviewed,” expressed the former Finance Minister.
There have been sharp reductions in most sectors of Guyana’s economy over the past year. In her address to parliament during the recent budget debate, Shadow Minister of Finance Juretha Fernandes was keen to point out sharp contractions in many non-oil sectors: 34% reduction in sugar production, 20% reduction in rice production, 3.8% reduction in Bauxite, 14.8% reduction in gold production, and more in 2021 alone. Owing to the poor performance in all non-oil sectors, she pointed out that the non-oil GDP at the end of 2021 was still smaller than the non-oil GDP of 2019.
She warned that rapid growth in a single export sector has repeatedly led to the dreaded “Dutch disease” where growth in one sector leads to a contraction in all other economic sectors in countries that don’t take careful action to safeguard those sectors.
With two oil ships, namely the Liza Destiny and the Liza Unity in operation and producing approximately 300,000 barrels a day, Guyana’s growth rate is forecast to jump from the initially projected 47.5 percent to 57.8 percent this year. This was recently noted by Senior Minister with responsibility for Finance, Dr. Ashni Singh who stated that Guyana’s pace of development and production makes it one of the fastest growing economies in the world.
However, a dismal non-oil growth coupled with runaway inflation rates, tells a whole different story about Guyana’s economic performance, the former Finance Minister posited.
More, In The Ring.
