By Ravin Singh
The Coronavirus (COVID-19) pandemic which is unfolding amidst a deepening political crisis in Guyana could threaten the prospects of unprecedented growth which could transform the lives of Guyanese.
This warning was issued by the World Bank in a semiannual report of the Latin America and Caribbean region, titled: “The Economy in the Time of COVID-19”.
The report was released online by the World Bank on April 12.
In its summary of Guyana, the financial institution predicted that oil production will “boost [Gross Domestic Product] GDP growth to unprecedented levels in 2020”.
According to the Bank, real GDP growth at constant market prices is expected to be 51.7% compared to 4.7% in 2019. Meanwhile, public debt, as a percentage of GDP is expect to dip from 54.3 in 2019 to 45.6 this year.
It was just last week that ExxonMobil – one of the companies engaged in oil exploration and production in Guyana – shared with Kaieteur News that its long-term plans in Guyana remain unaffected. However, the oil giant revealed that some of its 2020 activities are being deferred by up to six to 12 months.
Last month Guyana received almost US$55M for the first million barrels of oil which it sold to the Barbados-based Shell Western Supply and Trading Limited (SWSTL).
However, authors of the report were keen to note that: “While this [growth] could transform Guyana, there are risks, as illustrated by a still incomplete election outcome, and compounded by falling oil prices and the Covid-19 epidemic.”
The world market price for oil plummeted recently as the spread of the COVID-19 forced a shutdown of the global economy; subsequently triggering a deal for oil producing nations to cut back on production. https://www.bloomberg.com/news/articles/2020-04-12/oil-price-war-ends-with-historic-opec-deal-to-cut-production
As of April 12, 2020 Guyana had recorded 45 cases of COVID-19 and six deaths. Requests by the government to several international lending agencies, to provide financial support to strengthen the country’s capacity to deal with the virus, have so far gone unanswered.
This is unfolding at a time when Guyana is also experiencing a political crises birthed out of the March 2, 2020 General and Regional elections. Allegations of electoral fraud involving top government officials and elections agents has indefinitely stalled the process and renewed longstanding ethnic tensions.
Multiple international organisations and foreign powers, including the United States (US), Britain and Canada, have concluded that one aspect the electoral process lacked transparency and could not produce credible results. The US has repeatedly threatened sanctions if the results of the elections are not credibly obtained.
For many, the elections usher in management of the country’s emerging oil and gas sector which could potentially transform the lives of Guyanese, which makes it unlikely for either side to concede.
As the political battle and the public health crises continues, the World Bank also sought to highlight that weak public service delivery and monitoring systems constrain the development of policies to reduce poverty and protect the vulnerable in Guyana.
The last estimated poverty rate in Guyana was 36%, according to the World Bank in 2011.