– local economist warns, if Guyana to regain its economic equilibrium after the slowdown of the last few months

GUYANA is at a defining moment in its history, as the country enters a new era under the leadership of its ninth Executive President, Dr. Irfaan Ali, who is expected to immediately lead the charge against the deadly Novel Coronavirus (COVID-19) pandemic and simultaneously maintain economic stability.

The task ahead will not be easy, but Head of the Department of Economics at the University of Guyana, Sydney Armstrong believes that the swift passage of a national budget would create some traction and stability for the economy, which has been burdened not just by the pandemic, but also by a protracted electoral process which ended only on Sunday.
“There is the need for President Ali and his team to swiftly pass a budget for 2020 so as to create some traction for this economy in this difficult time, and at the same time think about Budget 2021,” the economist told the Guyana Chronicle during an exclusive interview on Monday.

The country’s last budget, Budget 2019, was passed in December 2018 to the tune $300.7B. And, with the country already eight months into 2020, it is important for a budget to be passed soon.
Armstrong strongly advises that the proposed budget be “people-focused”, and especially give priority to vulnerable groups.
He feels that essentially, it should focus on such key sectors as health, education, agriculture, infrastructure and industries, all of which should be inextricably linked to the new Oil-and-Gas Sector, which should be its central feature.

“As a nation, we are at a defining moment, given the development of our Oil-and-Gas Sector,” Armstrong said, “but it is also important to note that the road up ahead is still going to be challenging, given that we are still in a global pandemic.”

Considering the economic situation and the instability caused by COVID-19, the economist said there is need for a “stimulus package”, as this would ease the “economic hardship” faced by vulnerable groups in society.
His advice to the government also is to reassess the COVID-19 control measures, because there has been a consistent rise in cases over the past few weeks.

STRICTER COVID-19 MEASURES

“There is a need for a decision to re-lockdown the hotspot areas and have strict travelling arrangements to and from those areas, most of which are border areas, except for Region Four (Demerara-Mahaica),” Armstrong said.

Guyana has so far recorded over 490 cases of COVID-19, with 22 deaths. And, while 186 persons have recovered thus far, there are still over 280 active cases being monitored.
In this time of distress, Armstrong said, President Ali will have to reassure the nation that he will be a leader for all its peoples, as there is still a divisiveness amongst them. This, he believes, is an opportunity to bring them together.

Dr. Ali in his first address as President reassured the nation that he will uphold the oath he’s taken, and will work in the best interest of the people of Guyana.

“There is only one future, and that requires a united, strong Guyana,” the President said, adding: “That future requires every Guyanese to play a part in building our country, and ensuring we leave a better Guyana for the next generation.”

Noting that there’s strength in unity, he said: “We are in this together; we are not separated by class, by ethnicity, religion or political persuasion. We are united in the true Guyanese spirit.”
President Ali later told the media that the new administration will focus on a development agenda that will reflect the priorities of every Guyanese.
“We are building a country for every Guyanese. There is no need for fear; there is no need for distinction based on political persuasion, religious belief or ethnicity. This is a government for all of Guyana,” said the President.

THE FULL VISION
The full vision of the government will be outlined later this week at the official inauguration ceremony. That vision will project where the government hopes to see Guyana at the end of its five-year reign.

In April, the World Bank, in a semi-annual report on the Latin America and Caribbean Region titled: “The Economy in the Time of COVID-19”, said: “Guyana’s economy expanded by 4.7 per cent in 2019, with anticipated oil revenues spurring an expansion in nontraded sectors. Oil production is projected to boost Gross Domestic Product (GDP) growth to unprecedented levels in 2020.”

Coming off of a good run in 2019, with recorded economic growth of 4.7 per cent, Guyana’s continued progression and transformation was inevitably halted by the COVID-19 pandemic.
The necessary restrictions in place to curtail the spread if the disease, as seen in countries across the world, had “slowed down” the economy, because businesses either reduced their productive hours or are closed indefinitely, and the public sector has also scaled down its operations for the time being.

And, unlike other countries, Guyana was also faced with the effects of a protracted electoral process.
There is, however, still hope for Guyana, as the International Monetary Fund (IMF), in a report last year, said Guyana’s $4B annual GDP is expected to expand to about $15B by 2024. The financial institution had said the commencement of oil production will substantially improve Guyana’s medium and long-term outlook. Guyana is projected to be among the world’s largest per-capita oil producers by 2025.

The oil sector is projected to grow rapidly, accounting for around 40 per cent of GDP by 2024 and supporting additional fiscal spending annually of 6.5 per cent of non-oil GDP on average over the medium term, which will help meet critical social and infrastructure needs.

The Economic Commission for Latin America and the Caribbean (ECLAC) had also said the Guyana Government will receive approximately 14.5 per cent of all oil revenue in 2020.