With three major oil production projects already approved and a fourth one on the way, Guyana’s Vice President Dr. Bharrat Jagdeo said the logistics onshore and related investments in hotels and real estate to manage these developments will run into about US$40 billion. With a small population of around 750,000 people, the country has a limited labour force and will have to examine other options to fill this gap.
“And so, we have a small population, limited labour force, we’d have to carefully at some point in the future, I think we’d hit full employment. So, we may have to consider an active immigration but careful immigration policy that is how you expand your capacity,” he said.
The Vice President said as demand for labour increases the already limited capacity of the new oil producing South American country could lead to overheating.
“And then right now if we’re going to spend more on infrastructure, etc., we don’t have the domestic capability to implement all of the projects. So, we’d have to import a lot of those capabilities to foreign contractors and foreign expertise,” Mr. Jagdeo pointed out.
“So, these two have to be carefully calibrated to see that you know, the demand doesn’t outstrip your productive capacity because it becomes inflationary, the economy starts overheating,” he added.
The Vice President said government is examining this closely to ensure there is careful calibration going into the future. “But given our history, we’re very, very cautious about cycles of high growth and then a slump,” he said.
According to a 2020 survey on the Guyana Labour Force conducted by the Guyana Bureau of Statistics, in the first quarter of 2020, the labour force participation rate was recorded at 50.4 percent. The total population aged 15 and above residing in Guyana was 602,765 persons, the majority of which is based in rural areas (71.8 percent).
But even if the labour force participation rate increases significantly, the country will still face a major shortfall as demand from the oil and gas spin-off industries rise exponentially.