Dear Editor,
In the past week, Guyana witnessed three socio-economic events worth discussing and assessing for their implications for Guyanese. We saw a resounding endorsement of the country’s economic performance, reviewed and endorsed by the International Monetary Fund (IMF). The IMF is recognizing the forward planning and careful roadmap of economic growth presented by President Irfaan Ali and his administration. Second, we saw the US Government recognizing the economic and commercial importance of Guyana with the establishment of a Commercial Office at the US Embassy. And to cap it off, we saw a remarkable feat by endorsement and welcoming of ANSA McAl and their USD $12.5 million investment in Guyana and potentially an additional USD $17 million, this is effective regional economic integration working to benefit the entire Caribbean.
So, the question now is how does this benefit the Guyanese people? Let’s examine the IMF report on Guyana’s economic performance. LoopNews reports that “The IMF said that after a strong 2022, in the first half of 2023, real non-oil GDP grew by 12.3 per cent. It said inflation reached 7.2 per cent at end-2022, in line with other countries in the region, and declined to 1.2 per cent on a year-on-year basis in July 2023, with the decline in transportation and communication prices” (Loop, 9/13/2023). Important to note that Gross Domestic Product (GDP) growth means that all segments of the economy are growing. This means that income to household will increase, income to businesses made through investments will increase, government share of tax revenues will increase and exports of the nation will also increase. This translates to increased economic activity throughout the economy as rudimentarily as the local grocery increasing sales due to households’ increased demand resulting from added disposable income, the taxi driver increasing trips due to the business activities, etc. This simple concept in economics is known as the circular flow of economic activity, where the engine of economic flow fuels spending and income throughout the economy. Bottom line, Guyanese households stand to benefit from the increased economic activity.
The creation of a US Commercial Office at the US Embassy is a ringing endorsement of Guyana’s increasing transparency and openness to conduct business in Guyana with global partners. Guyanese stand to gain from not just better quality of durable products but also services in healthcare, education, social services, all of these services being offered by global partners. Importantly, to note that local Guyanese companies also have the opportunity to partner with these US-based companies to bring products and services to Guyanese households, which will fuel employment and income. We can also expect to see improvements on supply chain management, inventory management as well as increases in production technologies coming into Guyana.
Finally, President Ali and his colleagues have been leading the way in regional integration throughout Caribbean nations and the announcement of a US$12.5 million investment into Guyana by the Trinidad-based company is an endorsement of the business and economic climate of Guyana. This translates to jobs for Guyanese, partnerships for businesses and also a source of much needed materials to support the local infrastructure development. As part of the investment, Guyana Chronicle (9/13/2023) reports that “The company also plans to invest some US$250,000 in training to take Guyanese to Trinidad and Tobago, so that they learn the necessary skills to service and repair machinery”.
In the spirit of Guyanese Cricket, it looks like the Dr. Irfaan Ali and his government is batting sixes as the engine of economic growth is heading into centuries. Guyanese households as well as businesses are in a remarkable position to increase income, health and welfare from these initiatives.
Yours faithfully,
Dr. Tilokie Depoo
Economist
