* Upgrade to “Upper Middle Income” economy
Guyana’s graduation to an upper middle income country can only be regarded as “bad news” if the Government is unprepared to deal with the consequences, former Junior Finance Minister Juan Edghill stated.
A recently released World Bank Classification Report revealed that the Guyana’s economy jumped from being lower middle income to upper middle income from the period July 2015 to July 2016; bringing the country up to par with China, Brazil, Jamaica and Venezuela, which recently fell from being a high income country.
Junior Finance Minister Jaipaul Sharma had indicated that this development brings great news for the Government but will spell doom for the ordinary citizen.
“It is good because it shows that the Government has gained the confidence of the World Bank and indirectly, the international community… but bad news for the contractors because definitely the World Bank will say we do not qualify for certain categories of loans and other international bodies will follow suit,” he explained.
But Edghill contended that the Minister’s statement is ludicrous and only demonstrates the lack of vision as well as the absence of a coherent policy for the development of the nation.
In an invited comment on Saturday, the former Minister said such great news can only be considered bad for the people if there is no plan in place to ensure the entire country can be shifted in a direction that matches the improved ranking.
“It would be bad news for the people if the Government is unprepared to relate to the people that the economy has been improving and they are unwilling to pay increased salaries and benefits to the people to allow the citizens to live at that level. So if Minister Sharma is looking in the crystal ball and is saying that Government is unprepared to lift the living standard of the people to accommodate the new classification then it will be bad news for the people. But if the Government is prepared to understand and prepared to act in terms of providing what is needed for the living standards of the people to go up, there’s no bad news, this is good news,” Edghill explained.
He pointed out that since Guyana has moved up in its rankings, chances are the country will not benefit from significant concessions like before.
He explained that, as a result, Government will have to act proactively to ensure the burden does not fall on the population.
“If we don’t raise the minimum wage and pass on benefits, you will be putting more people in the poverty line… So I think Minister Sharma is basically saying that he is happy that internationally we are being recognised but Guyanese people can expect punishment because the Government is not prepared to act in keeping with that developing rating. So maybe he is talking about something that he is privy to or aware of,” he stated.
Every year, the World Bank assesses its 189 member countries along with 28 other economies with populations of more than 30,000.
These countries are classified so that data users can aggregate, and group statistical data of interest, and for the presentation of key statistics. Its main classifications provided are by geographic region, by income group, and by the operational lending categories of the World Bank Group.
Economies are divided into four income groupings: low, lower-middle, upper-middle, and high and their income is measured using gross national income (GNI) per capita, in US dollars, converted from local currency using the World Bank Atlas method.
Lower middle income economies are countries with a GNI per capita of between US$1026 and US$4035, upper middle income economies are the ones with between US$4036 and US$12,475, while high income economies are the ones with a GNI per capita of US$12,476 or more.
The Gross Domestic Product (GDP) in Guyana expanded by three per cent in 2015 from the previous year. The GDP Annual Growth Rate in the country averaged at 2.09 per cent from 1961 until 2015, reaching an all-time high of 11.36 per cent in 1964 and a record low of -13.19 percent in 1982. The country’s basic minimum wage is $50,000 or $600,000 per annum.