Gov’t actively addressing cost of living woes through series of measures – GS Jagdeo
– Highlights $80B in fuel costs absorbed by the government annually
– Seeking $US70M supplementary financing to maintain electricity costs
The PPP/C Government has implemented a series of measures to mitigate the impact of the high cost of living for citizens in Guyana, resulting in the country’s inflation rates being below the regional average, despite facing a challenging and rapidly expanding economy.
People’s Progressive Party’s (PPP) General Secretary, Dr Bharrat Jagdeo highlighted initiatives such as the annual absorption of fuel and water charges and fuel subsidisation costs for the Guyana Power and Light (GPL) Incorporated.
As countries worldwide experience a surge in the costs for these basic amenities, the situation in Guyana is less dire, signifying the impacts of direct interventions being implemented. For example, the government has waived an estimated $80 billion in fuel costs thanks to a 50 per cent excise tax cut, providing major relief to citizens.
Speaking at this press conference, Dr Jagdeo emphasised these interventions are essential to prevent citizens who own cars or run businesses from paying higher prices for fuel.
He further noted that no other country has managed to do this since they have to keep their taxes to maintain their budget.
“Had, we had not removed that…Every citizen who owns a car or runs a business would have had to pay $500 more per gallon of diesel or 500 more on average per gallon of gasoline…So if you fill it up, put five gallons of gas in your tank, you’ll pay $2,500 more,” the GS explained.
Additionally, the government is seeking supplementary financing of nearly US$70 million to mitigate the rise in electricity costs, later this year. The aim is to prevent an increase in electricity prices by subsidising fuel costs for the state-owned utility company.
“If we don’t do that, what will happen? They’ll have to increase their electricity prices… to cover that increase in fuel costs that they have to import,” Dr Jagdeo said.
In the water sector, despite significant cost increases, water rates have been reduced by five per cent since 2020; this means individuals are now paying less than they were in 2020. This is leaving out the investments being pumped into the sector as $200 million is invested towards building water treatment plants nationwide to improve access and quality.
Furthermore, $90 billion is being spent on public servant wages, representing a significant growth in wages for these employees. Pensioners have also benefitted from disposable income with a $20 billion increase by the government.
Additional support includes $10 billion yearly for the part-time job programme, benefiting women and single parents, with recent expansions in the hinterland areas. Currently, there are 15,000 persons employed through this initiative.
The government is also helping farmers by offsetting fertilizer costs, which have risen, to reduce their production costs and increase their disposable income. This initiative will also ensure consumers are not burdened with the hike in prices.
The general secretary underscored that despite criticisms, the government is proactively addressing issues and working to increase disposable income while mitigating the costs citizens face.
He mentioned that the situation would have been critical if the economy had been managed by the previous government, which imposed approximately 100 taxes on the general population.
“They see an issue that people complain about, so they jump on it opportunistically, vulture-like. Without conveying to the people all that is being done elsewhere,” he stated. He added, “A lot of the countries have not dealt with it in a manner that we have dealt with. With empathy and with a clear-cut vision as to how to tackle it and to make sure that we keep increasing disposable income, but we observe some of the costs that people would have to face to the treasury. They don’t even see it.”
The government’s policies have also led to the creation of around 60,000 jobs, both in the public and private sectors.
Looking ahead, the government has earmarked $7 billion in the 2024 national budget for further interventions after extensive consultations with key stakeholders nationwide.
Since 2020, the government has injected over $200 billion into the economy through various strategic measures aimed at providing relief and fostering growth. They have implemented a range of fiscal policies and relief initiatives designed to address immediate needs while also laying a strong foundation for sustainable economic development.
Each annual budget has been carefully crafted to navigate challenges like the COVID-19 pandemic and global economic fluctuations, with a focus on prioritising the well-being of households and building resilience across different sectors.