World Bank chief economist for Latin America and the Caribbean, William Maloney, has urged Guyana to ensure that its new-found oil wealth benefits the entire population.
Maloney, who was fielding questions from journalists following the release of the Regional Economic Report for Latin America and the Caribbean (LAC), described the efforts to ensure all sectors of the country benefited from the oil wealth “as one of the $200-million questions”.
“One is to ensure that this new oil wealth will actually get to the people who need it and I would say in particular in the building of human capitals so that the economy can diversify over time.
“The second is to ensure that we find ways of using these revenues so that we build a more diversified economy. This requires a set of institutions that know how to keep the right amount of resources, the revenues offshore, the Sovereign Welfare Fund so it can maintain an exchange rate that is competitive,” Maloney said.
Maloney said that there is also need for strong institutions within the country “that are able to mediate the very different demands from the population and ensure that the oil resources go to where they are supposed to go”.
He said that while the World Bank is not involved in the oil sector, per se, “but we are consulting on issues of how to build institutions”.
In January this year, the government presented a national budget of US$5.496 billion (Guy$1.146 trillion).
The Irfaan Ali administration said the expansion is being partially fuelled by the country’s increasing oil windfall, projected to constitute nearly 29% of the budget.
Praise for Jamaica
Maloney told reporters with regards to Jamaica, the island is expected to record economic growth of 2% this year, dropping to 1.6% next year and the same figure for 2026.
“Jamaica continues to be incredibly impressive in their management of external debt . The consensus mechanism that they develop….several years ago that brought the major interest groups in the economy together with the goal of managing the fiscal deficit, the debt levels, has worked extremely well and generated consistently declining overall debt levels,” he said.
Maloney said he believes in the long term it will lead to more “dynamic growth and poverty reduction”.
In February, Prime Minister Andrew Holness said Jamaica is on course to lower its debt-to-GDP ratio to 74% by the end of March 2024, adding this will be “well below pre-Covid-19 pandemic levels and the lowest in 25 years”.
The World Bank official said that, in the case of Barbados, the island will record growth of 3.7% this year, down to 2.8% next year and 2.3% in 2026.
Maloney said the poverty levels for several countries in the Caribbean are comparing well with countries elsewhere even as he acknowledged that “getting good veri on the Caribbean remains a major challenge”.
He said the veri is needed to track not only the performances of the respective economies but labour market indicators, among others.
The World Bank official said Belize will record economic growth of 3.5 % this year, declining to 2.5% going forward.
“Obviously Belize is a reasonably small economy with a lovely tourism sector,” he said, indicating the need for small economies to be more diversified.
“But they are constrained by scale. So I am not exactly mühlet what our programmes are in Belize right now,” he told reporters.
—CMC
Source: Daily Express