Sustained Path
The Guyana economy continues to place too much dependence on gold and remittances. Complacency about the vital structural changes needed to set Guyana on a sustained path of growth could set in with the belief that the streak of uninterrupted growth in the economy had drivers as important as gold and remittances. To think otherwise could undermine the commitment and sacrifice so many Guyanese have made to change their economic and social conditions, and to make things better for their families. While increased recognition is being given to the potential of small businesses, an important sector of the economy, there is no denying that growth was significantly aided by the performance of the gold industry and the ever increasing inflows annually from Guyanese living and working abroad. The performance of gold is significant for several reasons and much time is spent discussing its contribution to the economy in this discussion of the 2013 budget proposal. When measured against several critical macroeconomic variables, gold stands out as a central pillar upon which the current economic growth has occurred.
One important macroeconomic variable is the foreign reserves of Guyana to which gold could be seen as a major contributor. Foreign reserves were reported to be US$825 at the end of 2012. With export receipts of US$716, one can say that gold contribution was equivalent to 86 percent of the value. According to the 2013 budget report before the National Assembly on the performance of the Guyana economy, export receipts amounted to US$1.5 billion in 2012. Export receipts are not a footnote in the economic life of Guyana. They are the means by which the bulk of the income earned in Guyana is obtained since Guyana exports most of what it produces. Those receipts are relied on to import the many consumer goods found in homes, garages and entertainment centres. They are also used to acquire the intermediate goods used in the production process. That gold alone was responsible for 48 percent, nearly half, of the country’s export receipts is in its self interesting.
Magnitude
The magnitude of gold’s contribution to the economy is also seen in its comparative performance against the