Dear Editor,
THERE has been sustained public discussion about poverty in Guyana and the assertion that oil revenues are not reaching those most in need. I begin by acknowledging a basic and often overlooked fact, which is, poverty exists in Guyana, just as it exists in every country in the world, including advanced economies.
The appropriate policy question is not whether poverty exists, but whether the direction of public policy is reducing it, increasing it, or leaving it unchanged.
When poverty in Guyana is analysed over time, rather than through isolated snapshots or emotive claims, the empirical record shows a long-term decline.
The World Bank’s household survey data indicated that national poverty rates fell sharply from over 60 percent in the early 1990s to approximately the mid-30 percent range by the mid-2010s (World Bank, 2017).
This improvement coincided with macroeconomic stabilisation, expanded access to education and health services and steady employment growth. This was clearly because of the government’s focus on the issue and their fiscal and monetary policies.
More recent assessments reinforce this trend. Since 2020, the IMF, IDB, Caribbean Development Bank (CDB) and the Bank of Guyana have all reported strong real GDP growth, falling unemployment, rising real wages, and expanded social spending, factors that are empirically associated with poverty reduction (IMF, 2023; IDB, 2024; CDB, 2023; Bank of Guyana, 2024).
None of these institutions reports a reversal in poverty trends; instead, they emphasise that growth has been accompanied by increased social transfers and improved access to basic services.
Second, poverty reduction over the past five years has been reinforced by deliberate, targeted policy choices by the government.
Among the most significant interventions implemented by the government are: (1) direct cash grants and cost-of-living support to households; (2) substantial increases in old-age pensions and public assistance; (3) VAT removal on electricity, water, and key food items; (4) expanded housing subsidies and low-income home construction and (5), tuition-free education initiatives and school-feeding programmes.
Finally, extensive peer-reviewed research on low-income, resource-rich countries warns against relying exclusively on direct cash transfers. While transfers are essential for immediate relief, countries that neglect investment in infrastructure, agriculture, health, education, security, and youth development risk undermining long-term growth (Auty, 2001; Sachs & Warner, 2001). The consensus in the literature is clear that sustainable poverty reduction requires a balanced approach.
Guyana’s challenge, therefore, is not whether oil revenues are reaching people, but whether they are being deployed in a manner consistent with both immediate relief and long-term national development.
The available data suggests that the current policy mix are targeted transfers alongside major public investment and is broadly aligned with international best practice.
Sincerely,
Dr Tilokie Depoo,
Economist