Dear Editor,
The plan for 5000 house lots is admirable, but the recipients will need additional help to reap the benefits of home ownership. If we consider the development cost of the infrastructure needed to support the housing drive, the cost per house can range from $30,000 US to $40,000 US. This covers roads and electricity infrastructure. That’s the equivalent of two oil lifts in infrastructure costs. Now the recipient has a free lot that is valued between $6M to $8M Guyanese dollars, which can be used to take out a loan at the bank to build a modest but comfortable home for $5M. The challenge then becomes how to repay the loan even though the collateral is in place. The previous approach taken was to also provide farm land, which could bring additional income alongside a job to pay off the loan. This is a potential gap in today’s approach, especially given that the non-oil sectors are struggling and the oil sector does not provide a significant source of direct employment. Involvement of the house lot recipients in the construction industry does allow for some cushioning of the income gap for loan repayment, but this will only work if the higher income brackets also participate in the housing development initiative that is currently underway.
Real job creation outside of the construction industry must also occur to prevent an increase in bad debt. The real estate market will see increased property value as infrastructure investments are made and improvements to the current infrastructure increases in focus. How-ever, leveraging the increased value will remain a challenge without a means to repay any equity that is extracted from the market. The government must enable the food security plans that have been discussed. This will allow for increased income to be achieved. Although this is but one pillar of growth to support the economy’s expansion, it is very important given the current skills and resources that are available in abundance. The tourism industry will play a role, but its impact will be limited until the level of crime has significantly decreased and law and order is dependably maintained. The latest results in the non-oil sector do speak to the challenges ahead, and the plan for real job creation will play a crucial role in the sustainability and effectiveness of the current economic plan for the country’s growth. The unemployment rate and the growth of the agriculture sector will be key indicators of the health of the economy and the effectiveness of our country’s growth plan.
Best regards,
Jamil Changlee
Chairman
The Cooperative Republicans of
Guyana
