Bloomberg’s truth is not Guyana’s- the business news corporation is looking at oil production figures and projected earnings with a focus on how those will impact profitability and share prices of the oil companies.
This is Bloomberg’s market; Bloomberg delivers business and markets news, data, analysis, and video to the world, featuring stories from Businessweek and Bloomberg News.
The figures quoted for Guyana’s growth are not carefully studied with every factor considered before release- a forecast of 86% growth in Guyana’s economy is an error that has no consequence for Bloomberg, but would be consequential in extremis for Guyanese if we accept these figures without interrogation.
Those touting an 86% growth rate are mistakenly conflating revenue with growth, it is false, as most of this revenue will accrue to the oil companies, and only about 12% of those revenues will flow into Guyana’s coffers.
Guyanese have to ask how this growth translates into local prosperity.
Hess boasts of massive tax-free profits, of the utopian cash cow that Guyana has become for them, what can Guyanese boast of?
Our government continues to stumble from one fiasco to the next- local content policy is in its fourth draft and still, a far way off legislative reality and companies are working to expedite contractual agreements to capitalize on the Granger administration’s legendary incompetence.
Guyana is expected to earn US$200M from oil in 20200.
Our Gross Domestic Product was $3,610M for 2018, and this represents a 5.5% increase.
There are other factors to consider such as new Foreign Direct Investment or if ExxonMobil purchase of local goods and services increases dramatically, the cost of border security will increase and create drag, it is not a simple calculation of oil revenue to automatic growth.
There is also the major factor of who wins the 2020 Election and is charged with administering the government and economy.
The PPP inherited a bankrupt treasury and a GDP of US$538M in 1992, with a debt service ratio of 153%.
It left in 2015 with a GDP of US$3197M and a debt service ratio of 40%.
Electricity generation moved from 25MW to 158MW; the Berbice River was bridged; sporting venues such as the athletics center at Leonora, the Aquatic Center and the national cricket stadium were delivered to the people; The Marriott Hotel was completed and the CJIA expansion was started.
Sadly, the Amaila Falls hydro-electric project was thwarted by the APNU/AFC who were then in opposition.
APNU/AFC, in contrast, inherited US$968M in the treasury and a GDP of US$3197M. Significantly, 11 days into office, they were buoyed with the announcement of a major commercial oil discovery offshore.
In four and a half years, APNU/AFC reduced the reserves to US$485M, with an overdraft of US$321M (GYD 69B). When this is cleared, our reserves will be US$164M.
APNU/AFC grew the GDP to US$3610M, or $80B by levying 200 new taxes on the populace. The oil companies and satellite service companies have walked onto our shores and set up shop. There has been no significant growth from these companies as they have been given lavish tax and duty concessions.
Growth of 3.5% and the reduction of reserves by 83% after the discovery of oil is indisputable evidence of incompetence.
David Granger touts 32 school buses to transport a population of 170,000 schoolchildren as an achievement.
The figures above provide a broad overview of administrative performance. I will use the issue of job creation to illustrate the choice facing the electorate in 2020.
David Granger recently visited Linden and promised to create 150 new jobs in the next five years.
Granger made no mention of the 88 jobs lost due to his administration’s closure of the call center in September of 2015.
Given that Granger failed to deliver even one of the promises made on his ’11 point plan’ for Linden, the residents have much to think about.
Irfaan Ali has outlined a detailed plan to provide over 50,000 jobs, in his own words “a conservative figure”.
They include restoration and enhancement of the Community Service Officer program within the indigenous villages; jobs from the construction of 10,000 plus homes per year; large construction projects such as bridging the Corentyne River and the Amaila Falls hydro; restarting the sugar industry and other large scale agricultural ventures, a program of revitalization of the mining and logging industries is envisioned and of course the oil and gas service sector.
The PPP has an enviable record of 85% delivery of promises outlined in its manifestos.
The Granger administration has been digging a hole and calling it progress, the deeper they dig, the more progress is claimed.
The numbers and facts do not lie as much as Bloomberg’s applies to global corporations, these apply to our shores.
Guyana is not a traded on any stock exchange. If it was, the prudent and wise advice would be to dump APNU/AFC and buy PPP with alacrity.
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