Guyana not experiencing ‘dutch disease’ – experts say
─ growth despite global situation “speaks volumes”
The 2022 mid-year report published by the Finance Ministry on August 29, indicates that Guyana is not suffering from the ‘dutch disease’, as being touted by some sections.
This is the position of experienced Economist Richard Rambarran and Financial Analyst Joel Bhagwandin, who were speaking on the matter during an interview on NCN, Wednesday.
There have been recent claims in the public domain that the decline in crops heavily dependent on weather patterns is an indication of Guyana suffering from the economic issue.
“If one does a disaggregation of the economic sectors and you take a closer look at what has happened, you will find that there still exists growth more strongly in non-traditional sectors than has ever been had in Guyana,” Rambarran explained.
According to the report, Guyana has seen a 7.6 per cent increase in the services and construction sector, while the wholesale/retail trade and transportation sectors saw a combined jump of 30.8 per cent.
Rambarran highlighted that Guyana’s continued growth above the usual “golden rule of growth” despite several globally detrimental circumstances, is proof that Guyana is on a path to economic prosperity.
“It is no small secret that the first half of this year, globally, was besieged by a number of quite catastrophic events…what that of course did was create adverse international economic conditions, and if you have an economy that is still experiencing positive rates of economic growth in a global context where economic prospects are dampened, then you have an economy which in my view and my professional opinion, speaks volumes to the macroeconomic management,” he posited.
Agreeing with the position, Bhagwandin pointed out that the diversification of the sector is testament to the administration’s indepth focus on housing and land development.
This is what, he noted, is responsible for the “multiplier effect” which sees several other sectors experiencing massive economic and financial boosts.
“So, in this community now, you will have the need for a supermarket, a pharmacy, a day care, a school…so there is public service, which would provide employment for the people in that community. There would be private enterprises – supermarkets, pharmacies, a gym and those types of stuff for the people in that community…and then you still have construction ongoing, so the labourers are earning as well and they’re growing…and that is when we speak of the ‘multiplier effect’ in economics, that is what it means, multiplying the wealth,” the financial analyst explained.
Taking all this into consideration, Bhagwandin said the notion circulating about Guyana suffering from the economic phenomena known as the ‘dutch disease’ cannot come from a full analysis of the economy.
“A thorough analysis was not done, and I would go further to say there is a lack of a thorough understanding,” he opined.
Senior Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh in a previous interview, highlighted that government has recognised the importance of a strong, diversified economic base.
To this end, it had placed the highest level of importance on a resilient non-oil economy in the early days of oil production.
The aim was to modernise the economy’s traditional pillars and catalyse a rapidly growing and highly competitive non-oil economy.
This is evident in Guyana’s non-oil economic growth at the end of the first half of the year. The continued growth projected for 2022 builds on the 4.6 per cent growth recorded last year.