IN late August, The International Development Bank (IDB) released a report that found unemployment in Guyana has continued to trend down as oil production ramps up. The report titled “Global and Regional Economies at a Crossroads” notes that Guyana’s high rate of economic growth is largely driven by a growing oil production sector, which has reduced unemployment and improved access to finance for the private sector.
The picture is not the same across the region, with many economies still facing the headwinds of higher commodity prices and above-average inflation. Guyana is on surer footing than most of its Caribbean neighbours owing to what the IDB calls “the hydrocarbon – fuelled extraordinary growth…. that dwarfs the economic growth of all countries in the Western Hemisphere.”
The report found that the unemployment rose slightly in 2021 during the pandemic but started trending down by the end of that year. “The Unemployment rate declined from 15.6 per cent in 2021 Q1 to 14.5 per cent in 2021 Q3, driven mostly by declines in the unemployment rate of men, which dropped to 12 per cent in 2021 Q3 compared to 18.4 per cent for women. The International Labor Organisation (ILO) estimates further declines in the unemployment rate in 2022, falling to 12.4 per cent, (11 per cent for men and 14.4 per cent for women).”
The drop in unemployment is great news for the economy and Guyanese as more workers will increase earnings for families and ultimately lead to an improved standard of living. However, Guyana will still need to add significant workforce capacity in the years to come as more offshore developments in and outside the Stabroek Block demand a higher number of skilled and specialised labourers.
Growth in the oil sector is also expected to have a spillover effect in other sectors. According to the report, “The main drivers of growth in the non-oil economy in 2022 were agriculture, services, and construction, which grew by 11.9 per cent, 9.0 per cent, and 26.3 per cent, respectively. For 2023, these sectors are projected to grow by 7.2 per cent, 5.6 per cent, and 17 per cent.” A growing economy and a wealthier population will also expand the range of goods and services needed in the non-oil economy.
Earlier this year, Finance Minister, Dr. Ashni Singh, forecasted that the economy would expand by at least 25 per cent per year in the next three to four years. Guyana’s Gross Domestic Product (GDP) is expected to grow by an additional 37.2 per cent in 2023 with the arrival of the third Floating, Production, Storage, and Production (FPSO) offshore.
According to the Migration Policy Institute (MPI), it is estimated that Guyana will need at least 160,000 more workers to sustain the economic growth brought on by the exploration for and development of its oil and gas resources. The MPI expects most of the workers will have to be sourced from overseas, through a combination of remigration of Guyanese living outside the country and attracting skilled labour from within and outside the region. The International Organization for Migration (IOM) has cited a similar finding that Guyana will need to attract a minimum of 100,000 workers to realise its full growth potential.
Guyana has the benefit of a youthful population where the median age is 26.2 years and there is tremendous potential for youth to be engaged in the oil and gas sector and other sectors. The youth unemployment rate for the first quarter of 2021 was 31.4%, and more young women are unemployed (41.9%) compared to young men (23.7%). That signals that there is still much to do to ensure the youth are educated, trained, and employed.
Harnessing the talents of Guyana’s youth will be key to providing the skilled workforce needed in the oil and non-oil sectors. President Dr. Irfaan Ali recently spoke on plans by the government to implement legislation to manage artificial intelligence and digitisation to aid that effort.
“We are bringing more and more digitisation in the education delivery system so that the children who are coming up will not be placed at a competitive disadvantage. That is how the working class is benefitting, that is how the children of the workers are benefitting from this government,” he said. This effort is also joined by an agreement with the United Arab Emirates to see some 150,000 Guyanese students benefit from training in coding.
The government has committed to creating 50,000 jobs by 2025, increasing the number of scholarships for students, and enhancing the skillsets of the population. While there is much work to be done, continued investment in the upskilling and training of Guyanese is already bearing fruit. Guyana can expect to continue to reap the benefits of these investments in the years to come.