It has been said that a rising tide lifts all boats and President David Granger believes that the rising tide of Guyana’s economy will bring about unprecedented business opportunities and economic change to the Region. The President made this statement last September, in an address at the launch of the Guyana Trade and Investment Exhibition (GuyTIE).
Now, shortly after the National Association of Securities Dealers Automated Quotations (NASDAQ) has named Guyana the fastest growing economy in the world, we see that the President’s vision for Guyana’s economic outlook was spot-on.
In this edition of Government in Action, we explore Guyana’s growing economy and take a look at our nation’s ever-improving investment climate.
A timely prediction
“We in Guyana are seeing the surge of a rising tide that will deliver transformative economic change. The world-class discoveries of petroleum, made in the maritime space, will unleash unprecedented business opportunities. Petroleum revenues will catalyse economic growth, increase employment, propel innovation, intensify technology transfer and improve workforce productivity,” the Head of State said.
President Granger said innovation must be cultivated to ensure that the economy grows and develops sustainably.
“Guyana will soon become the Caribbean’s foremost investment destination. The private sector should aim at building capacity and establishing strategic partnerships to be able to exploit the opportunities which will flow from the petroleum sector. Experience has forewarned us of the dangers of dependence on one sector or commodity. Petroleum revenues will be deployed prudently to ensure sustainable and inclusive development under the Green State Development Strategy – the pathway to the economic transformation of Guyana into a ‘green state,’ he said.
President Granger, highlighting the need for intense collaboration between the public and private sectors, said that innovation must be highly sought after.
“The private sector has a pivotal role to play in regional economic cooperation. The private sector, to fulfil this role, should aim at increasing international trade and at avoiding the dangers of insularity. The private sector should aim at increasing investment and at becoming more innovative in pursuing new markets and improving the competitiveness of its goods and services. Investment is the fuel for wealth creation and employment generation,” the Head of State said.
Leading the world
On June 27 NASDAQ released a ranking of the five fastest growing economies in the world. Guyana topped that list with a 16.3 per cent growth rate over a four-year period, from 2018-2021. As for Guyana’s gross domestic product (GDP) NASDAQ predicts that the 2019 GDP growth rate will be 4.6 per cent and expects that in 2020 and 2121, the economy will grow by 33.5 per cent and 22.9 per cent respectively.
The International Monetary Fund (IMF) also reported strong predictions for Guyana’s economy. The preliminary results of the Staff Concluding Statement of the 2019 Article IV Mission states that, “Economic growth strengthened in 2018 with broad-based expansion across all major sectors. Real GDP grew by 4.1 percent in 2018, up from 2.1 percent in 2017, led by construction and services sectors. Inflation remained steady at 1.6 percent at end-2018, on the back of stable food prices and exchange rate. For 2019, the mission projects real economic growth of 4.4 percent, driven by continued strength in the construction and services sectors ahead of oil production in 2020, and strong recovery in mining.”
In March, the Caribbean Development Bank released its Country Economic Review of 2018 for Guyana. It stated that, “economic growth is estimated to have risen in 2018. Based on Ministry of Finance data, GDP grew by 3.4%, compared with 2.2% in 2017. This partly reflected preparation for the first commercial oil production in 2020. Construction activity rose by 12%. Output from other services was up 15%, linked to increased visitor arrivals…Inflation averaged 1.4% in 2018, compared with 1.6% in 2017. The decrease reflected lower price rises for food and for housing.”
Guyana, the CDB says, is on the verge of sharp increase of economic growth in the coming years.
Guyana’s investment climate
The Guyana Office for Investment (GoInvest) is responsible for facilitating investments and promoting trade in Guyana. Chief Executive Officer of GoInvest, Mr. Owen Verwey says that the current investment and economic climate in Guyana is the best it has ever been.
“GoInvest… is responsible for promoting investments in Guyana… for facilitating investments in Guyana. It is also responsible for promoting trade and to a lesser extent, policy advocacy on policies related to both investments and trade… We [promote] in several ways… [There are] promotional activities that are done outside of companies where we promote trade expositions and other trade-related events… [that] the Government of Guyana or [GoInvest] may host in other jurisdictions outside of Guyana. There are trade missions that come in to Guyana and also trade missions that go out of Guyana. All of those are activities we work on in terms of promoting trade,” he said.
Mr Verwey added that, “the investment climate and economic climate in Guyana is probably one of the best that it has ever been in its history, primarily because of the oil and gas discoveries. We cannot run away from that. The… sheer scale of the values of the macro-economic activities that will happen in that industry is very large,” he said.
Although oil and gas has brought Guyana initial recognition, Mr. Verwey says that persons coming to Guyana for oil and gas also explore other areas of investment.
“With every investor who is in a core activity, they sometimes like to… explore how they can diversify that portfolio and have something in other areas… I think that’s where our general economy has a very big benefit… Those oil and gas guys would like to know what else is there that we can invest in… I’m not talking about the core companies that have a focus on oil and gas; i’m talking about the shareholders and the employees. I’m talking about the companies that do some amount of supplies to them and the others who are associated with them. It’s never a ‘one-product, one-mind’ strict focus to them. They look at other the things.
President Granger had, in his address to GuyTIE, highlighted the importance of diversification.
While oil and gas seems to be the ‘next big thing’ Mr. Verwey encourages Guyanese to explore and improve the tourism, agriculture, forestry, and natural resource sectors as well. He confirmed the very possibilities that President Granger alluded to in his speech: Guyana is the right place for investment, and the perfect time is right now.
“The outlook for Guyana as rated by most of the international and multilateral financial institutions are not just good, its actually very good. That’s what the economic outlook is, very good for us. GDP growth [is] projected to be higher than every other Caribbean country and every other South American country… Politically, we’ve been very stable, at least if we can think of the situation from December 21st to date. There has been no civil unrest. There’s been no political unrest. In many other jurisdictions there would have been chaos for at least 24 hours. We’ve had none of that. That is a very good sign of political maturity from where we came and to keep the outlook for Guyana as an investment destination very positive,” he said.
Guyanese are encouraged to get ready for Guyana’s emerging economy. Let us equip ourselves with the necessary education, skills and competencies to capitalise on the imminent opportunities and reap the benefits.