Tuesday, November 29, 2022

Oil will be used to uproot historic impediments to broad-based economic growth – Guyana Finance Minister

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In an effort to set the stage for a diversified economy with competitive industries, Guyana’s Senior Finance Minister, Dr. Ashni Singh, said the government will use a portion of the oil wealth to uproot historic impediments to broad-based economic growth.

Specifically, the official said the administration is simultaneously working to address infrastructural weaknesses as well as high electricity costs. These factors, once improved, would ensure Guyana can have competitive agriculture and manufacturing sectors.

The official provided the foregoing as part of a comprehensive overview of the government’s master plan to keep the resource curse at bay. This was during a recent interview on Caribnews Update’s programme called The Narrative where he was interviewed by news anchor, Calistra Farrier.

With 11 billion barrels of oil-equivalent resources in the Stabroek Block, Dr. Singh said Guyana’s oil sector is generating rapid economic growth and opportunities. He said observers must note however that the full impact of the oil revenues will come later.

Dr. Singh said, “We are right now producing probably about 350,000 barrels of oil a day but that’s going to ramp up over the medium term. It’s going to ramp up to about a million barrels a day of oil production within the decade and once we get to that point, the resource flows are going to be far more significant than they are right now.”

Taking that future growth into consideration, he said current earnings which total more than US$1.2 billion, are still relatively modest, especially when one considers the gamut of the country’s development needs.

The senior official said the country is still grappling with significant infrastructural needs, such as connectivity via key roads and bridges, particularly for the hinterland communities. He said too that access to continental neighbours like Brazil and Suriname is still a challenge.

“We don’t have a bridge across the river to Suriname. We don’t have an all-weather road to Brazil, and that, of course, you know, some of those infrastructural impediments still weigh very heavily on Guyana’s ability to realise its economic potential,” expressed the minister.

He said the commencement of oil production has presented the administration with an opportunity to remove historic impediments to Guyana’s competitiveness. He said such improvements could no doubt catapult Guyana to being a key trading hub for the region.

Along with the infrastructure networks being strengthened, the economist said the government is intent on addressing electricity costs which have stymied development for ages. Its main project to unlock growth across all sectors, in this regard, is the Gas-to-Energy project.

He said, “It’s (high electricity costs) been a constraint to the emergence of a manufacturing sector. It’s been the main reason why we have remained a producer of primary commodities and not value-added products. We want to address this, and we are by investing very heavily in energy generation, which will lay the foundation for a more competitive manufacturing sector.”

Dr. Singh said this approach demonstrates that the government is thinking about a post-oil world. Guyana will be ready when that time comes, he concluded.

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