Raphael John-Lall

Uni­ver­si­ty of the West In­dies econ­o­mist, Pro­fes­sor Roger Ho­sein is con­vinced that T&T can learn from Guyana’s ex­cep­tion­al eco­nom­ic growth per­for­mance.

While Guyana’s av­er­age an­nu­al re­al gross do­mes­tic prod­uct (GDP) growth was 18 per cent be­tween 2015 to 2022, dur­ing that same pe­ri­od, T&T’s an­nu­al av­er­age re­al GDP growth was -2.7 per cent, the worst per­form­ing in the re­gion.

Guyana’s econ­o­my is al­so pro­ject­ed to be the world’s fastest grow­ing econ­o­my be­tween the years 2025 to 2029.

An aca­d­e­m­ic re­port au­thored by Ho­sein and econ­o­mist Dr Re­bec­ca Gookool-Bosland and re­leased in ear­ly May high­light­ed this da­ta and pro­vides a brief overview of the Caribbean economies’ growth per­for­mance.

Ho­sein in­formed the Busi­ness Guardian that all da­ta used in the re­port is from the In­ter­na­tion­al Mon­e­tary Fund (IMF).

The re­port cov­ers da­ta on growth from 2015-2023 and 2024-2029, where pos­si­ble. It cov­ers both tourism and non-tourism de­pen­dent Caribbean economies.

It in­ves­ti­gates the im­pact of the COVID-19 growth shock and the re­ac­tion by Caribbean coun­tries to this shock. It looks at the out­put gap in these Caribbean coun­tries for the pe­ri­od 2021-2024 and it al­so look at the medi­um-term growth prospects for the pe­ri­od 2024-2026.

It al­so re­views the rapid eco­nom­ic boom in Guyana and makes a few com­ments about its sta­bil­i­ty.

He told the Busi­ness Guardian what T&T’s Gov­ern­ment can do if it is to im­i­tate Guyana’s suc­cess­es.

“T&T has to in­crease its drilling in oil and gas so that the econ­o­my can ben­e­fit not on­ly from the price surges but al­so from pro­duc­tion in­creas­es as well. I am hope­ful that the T&T Gov­ern­ment would push for about three eTecK parks with­in the next three years. I am hope­ful that they would look for in­vestors be­cause the eTecK Park in Point Lisas on­ly has one in­vestor as far as I am aware. I al­so think that the for­ma­tion of the Spe­cial Eco­nom­ic Zones will help with the eco­nom­ic di­ver­si­fi­ca­tion process.”

Draw­ing an anal­o­gy be­tween the game of crick­et and the re­gion’s eco­nom­ic per­for­mance, the re­port says that in the past, in the true tra­di­tion of Michael Hold­ing, Mal­colm Mar­shall, Andy Roberts and Curt­ly Am­brose, the Cari­com sphere had “pace like fire.”

“In the tra­di­tion of fast bowl­ing from that era, the Guyanese econ­o­my is ex­pect­ed to be the world’s fastest grow­ing econ­o­my from 2024 to 2029 us­ing da­ta from the IMF, April 2024, on­line data­base.”

The re­port states that the rapid pace of this growth is fu­elled by the ex­ten­sive rev­enues gen­er­at­ed from its pro­duc­tion of hy­dro­car­bons. In 2020, Guyana was ranked num­ber one, in 2021 num­ber one, in 2022 num­ber two and in 2023 num­ber one fastest grow­ing econ­o­my in the world. So fast is Guyana’s ac­tu­al and pro­ject­ed growth be­tween 2015 and 2029, that by the end of 2029, it is ex­pect­ed to be 12 times larg­er than in 2015.

The re­port al­so re­ferred to da­ta which shows that as of March 2024, Guyana’s re­serves are said to be es­ti­mat­ed at around 11 bil­lion bar­rels with pro­duc­tion ex­pect­ed to be about 1.2 mil­lion bar­rels per day by 2027.

Some re­ports es­ti­mate that Guyana will gen­er­ate some US$2.1bil­lion and US$320 mil­lion from roy­al­ties in 2024 and these will like­ly rise in the medi­um term as ex­plo­ration and pro­duc­tion con­tin­ues.

Tourism

The re­port ex­plains that tourism as a ser­vice ex­port is of tremen­dous im­por­tance to the re­gion giv­en that this sec­tor is one of the main av­enues for earn­ing for­eign ex­change for many Caribbean economies. It paints an op­ti­mistic pic­ture of the fu­ture of the in­dus­try..

“The glob­al tourism econ­o­my is im­prov­ing and ba­si­cal­ly as at the end of 2023 this sec­tor was clos­er to 2019 lev­els of tourism ar­rival ac­tiv­i­ty, as com­pared to 2021. Specif­i­cal­ly note that in 2021 in­ter­na­tion­al tourism ar­rival traf­fic was 69 per cent less than in 2019 but by 2023 this was down to a mere 12 per cent.”

The eco­nom­ic analy­sis al­so states that 2024 is a crit­i­cal year for the glob­al tourism in­dus­try, as it marks a com­plete re­vival from the COVID-19 shock.

“This glob­al trend for the tourism in­dus­try augers well for the re­gion which is one of the tra­di­tion­al “sun sea and sand” hubs for va­ca­tion­ers from across the world. It is im­por­tant though for re­gion­al pol­i­cy­mak­ers to be aware of the chang­ing de­mo­graph­ic of the mod­ern va­ca­tion­er and type of tourism prod­uct that is most ap­peal­ing and re­ori­ent where nec­es­sary the re­gion­al tourism prod­uct.”

Medi­um-term out­look

The re­port al­so states that us­ing IMF da­ta (or da­ta from oth­er coun­try re­ports for these var­i­ous economies), the medi­um-term out­look shows mod­er­ate eco­nom­ic growth for most Caribbean coun­tries.

“By 2026, Guyana is ex­pect­ed to grow 92.4 per cent more than in 2023. The oth­er fast grow­ing (above 10 per cent) Caribbean economies in this time pe­ri­od are Do­mini­ca (12.6 per cent), Grena­da (11.2 per cent), St Kitts and Nevis (13.3 per cent), St Vin­cent (12.5 per cent) and Turks and Caicos (14.4 per cent).

“The growth per­for­mance of the OECS coun­tries is heav­i­ly in­flu­enced by its largest pro­duc­tive sec­tor, tourism, which has been re­cov­er­ing since the pan­dem­ic.

Fur­ther, giv­en the spillovers which ex­ist be­tween these economies and more de­vel­oped source mar­kets in North Amer­i­ca and Eu­rope, the OECS re­gion’s eco­nom­ic per­for­mance is there­fore in­tri­cate­ly linked to the eco­nom­ic cy­cles of its main tourism mar­kets,” the re­port ex­plained.

The three slow­est grow­ing Caribbean economies are ex­pect­ed to be Aru­ba (3.2 per cent), Haiti (-0.1 per cent) and Ja­maica (5.2 per cent) be­tween 2023 and 2026.

The UWI eco­nom­ic re­port con­clud­ed by stat­ing that sev­er­al ser­vice ex­port-ori­ent­ed Cari­com coun­tries are ex­pect­ed to see an in­crease in re­al GDP growth of more than 10 per cent be­tween 2024 and 2026.

Turks and Caicos is ex­pect­ed to grow quick­ly by 14.4 per cent on ac­count of a mas­sive in­flow of For­eign Di­rect In­vest­ment (FDI) and im­mi­grant work­ers.

An­tigua’s growth is dri­ven by its tourism sec­tor and its con­struc­tion sec­tor ac­tiv­i­ty.

Do­mini­ca has been ex­pe­ri­enc­ing strong growth in re­cent times and this is ex­pect­ed to hold in the medi­um term on the back of im­prove­ments in tourism, agri­cul­ture and its pub­lic sec­tor in­vest­ment pro­gramme.

It al­so says that Grena­da’s growth is large­ly based on im­prove­ments in its tourism sec­tor and its Cit­i­zen­ship by In­vest­ment (CBI) pro­gramme. St Kitts and Nevis con­tin­ues to grow with growth dri­ven by a re­bound of tourism num­bers, hous­ing and pub­lic in­fra­struc­ture spend­ing and in­vest­ments in re­new­able en­er­gy.

The CBI pro­gramme has al­so been per­form­ing well. The re­new­able en­er­gy dri­ve is pro­mot­ed by the Sus­tain­able Is­land State Agen­da.

The re­port states that Guyana’s econ­o­my has surged since 2019 with oil ex­trac­tion, tripling in size and achiev­ing the world’s high­est re­al GDP growth at 62.3 per­cent in 2022.

“Along­side this rapid ex­pan­sion, there are some signs of in­fla­tion, com­pound­ed by gov­ern­ment in­vest­ments tar­get­ed to ad­dress­ing the coun­try’s struc­tur­al de­vel­op­men­tal needs.

“Con­tin­ued growth is ex­pect­ed with ex­pand­ing oil pro­duc­tion and sus­tained in­vest­ment in hu­man cap­i­tal, in­fra­struc­ture, and en­er­gy cost re­duc­tion.”