It is not too often that good news comes out of the august offices of the International Monetary Fund, but it was quite positive last month in its Press Release 19/332 with a projection of 4.4 percent economic growth for Guyana this year.
Also, according to the IMF, Guyana’s medium-term prospects are very favourable with oil production, scheduled to start early next year. As well, following its Article IV Consultation with Guyanese authorities, the IMF indicated broad-based expansion extends across all major sectors.
It also indicated the current account deficit is estimated to rise to 22.7 percent of GDP “on the back of higher imports related to oil production, which will be largely financed by [Foreign Direct Investment] in the petroleum sector”.
It added: “The commencement of oil production in 2020 will substantially improve Guyana’s medium- and long-term outlook.” Notably, the oil sector is projected to grow rapidly, accounting for around 40 percent of GDP by 2024, and supporting additional fiscal spending annually of 6.5 percent of non-oil GDP on average over the medium term, which, according to the IMF, “will help meet critical social and infrastructure needs”.
Public debt and the external current account deficit are projected to decline steadily following the onset of oil production, the IMF noted.
“The directors welcomed Guyana's broad-based economic expansion in recent years underpinned by prudent macroeconomic policies,” the IMF said, adding the medium-term outlook is favourable, while highlighting the commencement of oil production “presents both opportunities and challenges”.
Its directors also took the opportunity to emphasise that “to ensure the effective use of windfall revenues”, policies in Guyana should “focus on reducing macroeconomic vulnerabilities, addressing structural weaknesses, boosting inclusive growth and promoting intergenerational equity”.
Guyana’s growth on the economic front is finally in promising territory in the light of its forthcoming oil production, noted in the positivity emanating from those eminent IMF minds. However, it remains to be stated, and unequivocally so, that only stable and focused governance can move this latent, transformative potential forward.
Unfortunately, the actions by the APNU+APC administration and its President David Granger have not yielded such reassurance. Instead, Guyana entered uncertainty following the fall of the government to a no-confidence vote on December 21, 2018.
It took a ruling by the Caribbean Court of Justice on June 18, 2019 that the no-confidence vote was valid, and that as Guyana’s Constitution directs, general elections should have been held by March 21, 2019. In its consequential orders on July 12, the CCJ indicated a new three-month period had begun on June 18, which meant Guyanese should have gone to the polls by September 18. This did not happen.
Expiration of yet another three-month period last month without the APNU+AFC administration proclaiming an election date saw intensification of protests in Georgetown by the Opposition People’s Progressive Party. Perhaps the uncertainty and intensifying protestations in Georgetown stirred international recall of a time in Guyana’s past when instability and an unfocused governance reigned.
International concern was then triggered, with US and European diplomats last month issuing a joint statement declaring Granger’s administration in breach of Guyana’s Constitution. With the expression of international concern came an accompanying threat to cut off development funding unless an election date was immediately set.
Also, the call from Secretary General of the Commonwealth, Patricia Scotland, was unequivocal; as it was filled with concern at the exorbitant price Guyana was paying abroad, particularly its concomitant loss of foreign investor confidence.
As Scotland said, “A general election in Guyana is constitutionally overdue. A general election should be held in accordance with the unambiguous constitutional imperative to do so.”
Last month finally saw general elections set for March 2, 2020. Granger’s administration ignoring “the unambiguous constitutional imperative” has placed Guyana in uncertainty. Our homeland’s potential, and its forthcoming transformation for a better Guyana, did not have to be taken to the brink.