Finance Minister, Winston Jordan recently revealed that the government intends to use a portion of the looming oil wealth to ramp up spending in the area of education and infrastructure.
He said this during his address to the National Assembly as he presented Budget 2019.
Jordan said that the money will be spent on infrastructures such as roads, bridges, airstrips, energy, and telecommunications. He said that this will be done in order to improve and induce domestic and foreign investment.
Jordan said, too, that increased expenditure on education and healthcare is also projected, so as to ensure qualitative and quantitative enhancement of the nation’s human capital.
Notably, the Finance Minister’s plans are in congruence with the advice provided by some of the nation’s international donors. In this regard, Ramon Espinasa, General Coordinator at the Extractive Sector Initiative of the Inter-American Development Bank (IDB) has said that given Guyana’s low absorptive capacity, it should focus spending on three areas: education, health, and infrastructure.
The oil and gas expert who has over 20 years experience, said, “If you look at the proportion of the discoveries made and the size of the population, you realize that the impact of the oil revenues will be huge. Guyana has about 700,000 people and the reserves have already hit an estimate of $4B barrels of oil… The share of potential revenue to population is therefore large but the absorption capacity is still going to be slow.”
Given the aforementioned, Espinasa told Guyanese officials just four months ago that education and infrastructure are the areas which the government should focus its spending on in the medium term. The IDB Expert said, “You need to use the oil to transform the population of Guyana by providing good health and giving high-quality education. I would focus on that and save the rest but it is up to them to decide how to do it…”
Espinasa also said that the creation of a Natural Resource Fund is an excellent idea since there will be temptations to spend all of the oil money. He stressed too that Guyana will need strong institutions to ensure the revenues are properly saved.