- These are essential ingredients for Guyana's Economic Diversification
Economic diversification is critical to a nation’s development if the country wants to achieve prosperity, says US Ambassador Sarah Ann-Lynch.
She made this statement on Thursday while addressing the Guyana Manufacturing and Services Association(GMSA) Annual General Meeting.
Ms Lynch believes one such way the economy can be diversified is by investing the revenue from the oil and gas sector into the non-oil sectors.
What this simply means is that if these non-oil sectors are competitive it is less likely that Guyana will fall prey to the Dutch disease. to make it more competitive.
“Diversification will serve as a guard rail for Guyana against the Dutch Disease which we all want to avoid.”
The Dutch Disease is an economic situation where a country focuses only on the oil economy while neglecting the non-oil sectors. Thus when oil resources end and there is no other stream of income for the country it may eventually lead to poverty.
However, she posited that this diversification will require reliable infrastructure that is built to last, a partnership between local and US businesses as well as cheaper electricity.
These constraints she explained are the reasons why she would encourage partnerships between local and US firms.
She said that while these international firms may have high standards, local businesses must not be hesitant to pursue partnerships as she believes they can help to develop a local brand.
“The arrival of US firms does not necessarily bring competitiveness but rather it brings partnerships.”
She also advocated the cost for reduced electricity rates as Guyana is known to have one of the highest rates of electricity in the world which is no doubt disadvantageous to locals and more so poses challenges to the business community.
The high electricity cost also poses challenges to the tourism sector because Guyana is seen as a worthy but expensive place for tourists, the US Ambassador said.
“For both expatriates and Guyanese, it is often cheaper and easier to vacation in Barbados or Miami than in the South Rupununi…it’s worth the cost but it is expensive” she said.
The Ambassador maintains that the US is committed to enhancing relationships with Guyana.