US$300M cannot kick-start economic transformation

US$300M cannot kick-start economic transformation

Feb 23, 2018 Features / Columnists, Peeping Tom, Kaieteur News, https://www.kaieteurnewsonline...omic-transformation/

A man in the street asked how oil revenues will affect his life. I asked him if he was a contractor. He said no. I told him that he must not expect any serious improvement in his financial fortunes. He then asked how oil revenues will transform the economy. I asked him what transformation he saw as a result of the increase in gold production in 2015. He said that he did not see any significant transformation.

In 2016, gold exports raked in US$830M. This was US$300M higher than the previous year. So what difference did this additional US$300M make to the economy? Not much, judging from the man-in-the-street reaction.

In 2018, people are still complaining about the sluggishness in the economy.

It seems to have escaped notice, but with all the talk about oil, the Guyana dollar has depreciated in recent weeks. At the cambios, the US dollar is being bought at $210, which used to be the old selling price which has now increased to US$213.

Prices of imported items have started to increase. A Mars or Milky Way chocolate bar is now $250. A few years ago, it used to be $200. Other import prices are increasing. And this is even though Guyanese expect oil revenues to come their way.

According to the government, Guyana will earn approximately US$300M in the forty years of oil production.  So Guyana will have US$300M more to spend. And this is exciting Guyanese so much so that they are staying very quiet about the scandalous oil deal which was signed between the government and Exxon.

In 2016, the government earned an additional US$300 M from gold, but this did not lead to a single new major infrastructural project in the country. All the major new ventures were all PPPC projects which are being rolled over. The US$300M from gold did not transform the infrastructure of the economy.

The reason for this is firstly that the flow-through effect of infrastructure investments to economic growth is very marginal. It requires hundreds of millions of investments to impact on a 1% economic growth.

Second, the trickle down effects of infrastructural investments is low.

The persons who tend to benefit the most from infrastructural investments are the contractors.

What all of this means is that the US$300M which Guyana is expected to earn from Exxon is not going to impact on economic growth neither is it likely to impact on the fortunes of the small man.

The Exxon deal is not transformative, because the revenue flows are too small. In addition, the development of oil will lead to the neglect of other sectors. The sugar industry is on its last. Rice seems to be on the verge of peaking. Bauxite is flattening out. And the other sectors performed below par.

Guyanese therefore must not expect that the US$300M that will flow from oil in 2020 is going to be an additional US$300M into the economy.

It is not. The new inflows from petroleum will have to compensate for the shortfall in export earnings in other sectors.

Guyanese have to wake up and smell the coffee or whatever else Exxon has offloaded and is smelling. The oil deal changes little for Guyana.

Yet, government persists with the asininity about concentrating on how the oil monies will be spent and not about whether Guyana got a good deal. This is a disgusting reaction from a government from which better was expected.

The question, therefore, as Marx would have posited is, “What is to be done?” The government is clearly now covering up its incompetence in the negotiations. It has contemptuously announced that there will be no renegotiation. It is a done deal.

The public will never know why it was that only some Ministers saw the contract before it was signed. The public will never enjoy the sweet of the oil which lies offshore. The government is beyond reclamation.

Original Post
Labba posted:
Riff posted:

this is incorrect...

"According to the government, Guyana will earn approximately US$300M in the forty years of oil production."

Yea. Even me who want to skool Aug month know dat wrong. 

Was going to ask you if Peeping Tom knows what he is talking about.

Django posted:

Peeping Tom is from the Dooms Day Crew,he needs to pull out the calculator.

 

Wrong!  Tom sits on a high branch which allows him to see the game clearer than the players. He is on the money with this one. Just think about the loss of revenues from sugar and other sectors and offset it against expected revenues from oil.

Billy Ram Balgobin posted:
Django posted:

Peeping Tom is from the Dooms Day Crew,he needs to pull out the calculator.

 

Wrong!  Tom sits on a high branch which allows him to see the game clearer than the players. He is on the money with this one. Just think about the loss of revenues from sugar and other sectors and offset it against expected revenues from oil.

What money the miscalculated US$300M from oil revenue in forty years ?

Django posted:
Billy Ram Balgobin posted:
Django posted:

Peeping Tom is from the Dooms Day Crew,he needs to pull out the calculator.

 

Wrong!  Tom sits on a high branch which allows him to see the game clearer than the players. He is on the money with this one. Just think about the loss of revenues from sugar and other sectors and offset it against expected revenues from oil.

What money the miscalculated US$300M from oil revenue in forty years ?

The unstable price of oil could put the country at risk of defaulting on its debt payments if we rely too much on oil. Guyana needs many more industries to generate real wealth. Oil alone cannot cut in today's world. The black gold is not the same gold it was years ago. Oil is found in over a hundred countries in the world. The growth of electric vehicles and solar polar will reduce the world's dependence on oil making it cheaper. 300 million is plenty money for a family but not for a nation. It helps but cannot solve all financial problems.

Billy Ram Balgobin posted:
Django posted:
Billy Ram Balgobin posted:
Django posted:

Peeping Tom is from the Dooms Day Crew,he needs to pull out the calculator.

 

Wrong!  Tom sits on a high branch which allows him to see the game clearer than the players. He is on the money with this one. Just think about the loss of revenues from sugar and other sectors and offset it against expected revenues from oil.

What money the miscalculated US$300M from oil revenue in forty years ?

The unstable price of oil could put the country at risk of defaulting on its debt payments if we rely too much on oil. Guyana needs many more industries to generate real wealth. Oil alone cannot cut in today's world. The black gold is not the same gold it was years ago. Oil is found in over a hundred countries in the world. The growth of electric vehicles and solar polar will reduce the world's dependence on oil making it cheaper. 300 million is plenty money for a family but not for a nation. It helps but cannot solve all financial problems.

It's known oil revenue alone won't cut the mustard.What Industries you have in mind to generate wealth ? Guyana needs to focus on agriculture and export to Caribbean and other countries.There is an Indian guy who invested heavily in variety of agriculture crops in the Pomeroon.

Django posted:
Billy Ram Balgobin posted:
Django posted:

Peeping Tom is from the Dooms Day Crew,he needs to pull out the calculator.

 

Wrong!  Tom sits on a high branch which allows him to see the game clearer than the players. He is on the money with this one. Just think about the loss of revenues from sugar and other sectors and offset it against expected revenues from oil.

What money the miscalculated US$300M from oil revenue in forty years ?

US$300 M in forty years is way off. He's probably talking about US$300 M more per year. These doom and gloom fools are really delusional if they think that US$300 M more per year will not make any difference. I bet if the PPP were in government they would be rejoicing. However, it would probably be less royalties for the government since the PPP signed for 1% in royalties as compared to 2% in the current contract. Double the revenues in royalties.

Billy Ram Balgobin posted:
Django posted:
Billy Ram Balgobin posted:
Django posted:

Peeping Tom is from the Dooms Day Crew,he needs to pull out the calculator.

 

Wrong!  Tom sits on a high branch which allows him to see the game clearer than the players. He is on the money with this one. Just think about the loss of revenues from sugar and other sectors and offset it against expected revenues from oil.

What money the miscalculated US$300M from oil revenue in forty years ?

The unstable price of oil could put the country at risk of defaulting on its debt payments if we rely too much on oil. Guyana needs many more industries to generate real wealth. Oil alone cannot cut in today's world. The black gold is not the same gold it was years ago. Oil is found in over a hundred countries in the world. The growth of electric vehicles and solar polar will reduce the world's dependence on oil making it cheaper. 300 million is plenty money for a family but not for a nation. It helps but cannot solve all financial problems.

Bai dem Saudi man and Russia man and Venos Man going to wuk to keep it up to 70 usd. Abie going to ge nuff nuff money. Abie na need ayoo remittance no more. Abie go throw back and drink likka. Me na plant bora and grow me fowl no more. Abie go afford foh buy chicken and egg from Merika. 

Labba posted:
ronan posted:

US$300 mil over 40 years nuh?

Robb street maths

the PPP Peeping Tom's dunceness break all records

I see what EDITOR Adam Harris did there, lol

Adam Harris is a PNC man. Dem na too good wid numbas over dere. 

PNC Adam Harris see am and let de PPP man make a fool of himself

ronan posted:
Labba posted:
ronan posted:

US$300 mil over 40 years nuh?

Robb street maths

the PPP Peeping Tom's dunceness break all records

I see what EDITOR Adam Harris did there, lol

Adam Harris is a PNC man. Dem na too good wid numbas over dere. 

PNC Adam Harris see am and let de PPP man make a fool of himself

Bai doh is de same PNC man who publish PPP tief out the underground economy. Dey seh how dem PPP bais tief over 2 bill USD every year foh 23 year. Now dem supporter who had high hopes na get lil red meat...not even lil ackuri...from SARU, SoCU, SOCA, all dem soldier people. Dem raise de people hopes and now dey doan have anything foh show. De problem is de same contractor dem who mek PPP bais house off de book now doing same foh de new bois and gyals. 

Labba posted:

Bai doh is de same PNC man who publish PPP tief out the underground economy. Dey seh how dem PPP bais tief over 2 bill USD every year foh 23 year. Now dem supporter who had high hopes na get lil red meat...not even lil ackuri...from SARU, SoCU, SOCA, all dem soldier people. Dem raise de people hopes and now dey doan have anything foh show. De problem is de same contractor dem who mek PPP bais house off de book now doing same foh de new bois and gyals. 

no doubt bai, no doubt

meh cyaan argue with dat

ronan posted:
Labba posted:

Bai doh is de same PNC man who publish PPP tief out the underground economy. Dey seh how dem PPP bais tief over 2 bill USD every year foh 23 year. Now dem supporter who had high hopes na get lil red meat...not even lil ackuri...from SARU, SoCU, SOCA, all dem soldier people. Dem raise de people hopes and now dey doan have anything foh show. De problem is de same contractor dem who mek PPP bais house off de book now doing same foh de new bois and gyals. 

no doubt bai, no doubt

meh cyaan argue with dat

So alyuh two scoundrels seh dem PPP sscoundrels tief USD 46 billion!   Rass, coolie people can tief even wah not deh deh!

Baseman posted:
ronan posted:
Labba posted:

Bai doh is de same PNC man who publish PPP tief out the underground economy. Dey seh how dem PPP bais tief over 2 bill USD every year foh 23 year. Now dem supporter who had high hopes na get lil red meat...not even lil ackuri...from SARU, SoCU, SOCA, all dem soldier people. Dem raise de people hopes and now dey doan have anything foh show. De problem is de same contractor dem who mek PPP bais house off de book now doing same foh de new bois and gyals. 

no doubt bai, no doubt

meh cyaan argue with dat

So alyuh two scoundrels seh dem PPP sscoundrels tief USD 46 billion!   Rass, coolie people can tief even wah not deh deh!

wha bout "dey seh" u doan anstaan bai?

ronan posted:
Baseman posted:
ronan posted:
Labba posted:

Bai doh is de same PNC man who publish PPP tief out the underground economy. Dey seh how dem PPP bais tief over 2 bill USD every year foh 23 year. Now dem supporter who had high hopes na get lil red meat...not even lil ackuri...from SARU, SoCU, SOCA, all dem soldier people. Dem raise de people hopes and now dey doan have anything foh show. De problem is de same contractor dem who mek PPP bais house off de book now doing same foh de new bois and gyals. 

no doubt bai, no doubt

meh cyaan argue with dat

So alyuh two scoundrels seh dem PPP sscoundrels tief USD 46 billion!   Rass, coolie people can tief even wah not deh deh!

wha bout "dey seh" u doan anstaan bai?

Me just asking bai!  

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