SINCE Oil was discovered in Guyana, there has been a group of educated persons who have expressed many forebodings of the new oil wealth. However, there are many who are convinced that the Natural Resources Curse is not determinist and that the oil wealth would help to transform Guyana into a country with first-world standards of health, education, housing, social services and the elimination of poverty. They believe that the country will also simultaneously achieve an agricultural and industrial revolution which will keep generating wealth long after the oil resources would have been exhausted or would have been overtaken by green energy.

Recently, however, the Leader of the Opposition who heads the shadow government which would succeed the present Government in the event they win the next elections, was ominous in his remark that the Dutch Disease had already infected Guyana.  He said the non-oil sectors have not been performing, claiming that sugar, rice, fish and gold production had badly plummeted and that were it not for oil, the economy would have collapsed.  His words were alarming since there is determinism that once a country is afflicted with the Dutch Disease there is no return.

At this point, we should briefly explain to readers what the Dutch Disease is.  The Dutch Disease is often termed “Natural Resource curse” and simply means that once a country, especially a developing country, discovers oil in large deposits and begins to exploit it, it becomes the main earner and focus of the economy and all other sectors are neglected, decline and even die.  When the Oil deposits diminish or run out or when Oil prices fall, the economy weakens or even collapses, plunging the population into the same hardship in which they were before the Oil boom.  Trinidad shows some symptoms of the Dutch Disease.

Alarmed by the Leader of the Opposition’s forebodings, we did some research on the Dutch Disease and found that Guyana had not been infected by it, and there is no indication that it will be.  The overarching reason why Guyana steered clear of the Natural Resource Curse is simply that those responsible for managing the economy are acutely aware of its pitfalls and have framed policies to avoid it and also because of the intelligence of the Guyanese people.  However, there is a body of opinionated persons that advocates that the oil revenues should primarily be spent on personal gratification and the non-oil sectors be placed in the backburner and only modest spending be done on social services.  Though this position seems attractive, it would lead to ultimate economic and social disaster.

Following up on our research into the Dutch Disease, we reviewed national statistics.  For the first half of this year, the GDP had grown by 36.4 per cent driven mainly by petroleum.  The non-Oil economy, despite the effects of the 2021 floods had grown by an estimated 8.3 per cent.  It is estimated that for the whole of 2022 the overall GDP is estimated to be 56 per cent and the non-Oil growth at 9.6 per cent.  A growth of eight per cent to nine per cent in the non-oil economy of any country is considered very good.  These statistics are an indication that Guyana is far away from any affliction by the Natural Resources Curse.

The policymakers are seriously focusing on the non-oil sectors and are committed to diversifying within that sector.  In the words of Dr Ashni Singh, Senior Minister of Finance, “We recognise the inherent vulnerability that arises from being dependent on one or two crops or one or two products, so we want to make sure that we diversify.  In this regard, in agriculture, government is encouraging the cultivation of other crops, including corn, soya bean and tropical varieties of wheat to promote large-scale production. We have done a lot of work to support the mining sector.  We took off taxes on fuel, gasoline and diesel as well as other taxes on the mining sector.”

Government has been heavily investing in infrastructure with the building of main roads and bridges and airstrips.  The shorter roads to market are beginning to make agriculture more profitable and attractive and the hinterland roads continue to be a major factor in stimulating and furthering the extractive sectors.  The hinterland roads also have the social dividend of helping to integrate the interior communities with the coast.

Dr Ashni Singh, in his recent visit to Canada, addressed the Guyana /Canada Chamber of Commerce in Toronto and gave the assurance that Guyana would never be affected by the Dutch Disease syndrome: “We intend,” said Dr Singh, “to ensure that we use this period of Oil production to invest in the things that are necessary to ensure long term growth and wellbeing for all the people of Guyana long beyond the Oil era. . .We  are looking far down the road and contemplating what are the things we need to do now to transform our country to ensure that growth is not only dependent on oil”. . .   The World Bank Report, which came out at the end of September, affirms that Guyana is far away from being infected by the Dutch Disease, is laudatory on Guyana’s social and economic policies and is a paean of praise for Dr Ashni Singh and his creative policies.