General Secretary of Guyana’s People’s Progressive Party, Dr. Bharrat Jagdeo, claims the mining sector has not been negatively impacted by Guyana’s oil and gas industry, dismissing concerns raised by the Alliance for Change (AFC) as lacking in logic.

During his weekly press conference, Dr. Jagdeo rejected the AFC’s claims about declining production of gold, diamonds, manganese, and bauxite, explaining the issue lies with compliance, not production. He noted that higher gold prices encourage evasion to avoid royalty payments, a longstanding issue unrelated to “Dutch disease.”

Dutch Disease is an economic term describing the negative effects that can occur when a country’s economy experiences a sudden increase in income, typically from the discovery of natural resources (e.g., oil or gas). The term originates from the Netherlands’ experience in the 1960s after discovering a large natural gas field.

Examples would be many resource-rich countries (e.g., Nigeria, Venezuela) have faced similar challenges. The solution is probably to diversify  the national economy, investing in other sectors, and managing resource income through sovereign wealth funds can help mitigate Dutch Disease.

He criticized the previous government’s broken promises to miners, highlighting increased taxes and royalties under APNU. “They increased the tributers tax, royalty rate, and imposed VAT on machinery and equipment,” he said.

Dr. Jagdeo outlined his government’s corrective measures, including removing the 10% tributers tax, VAT on machinery, equipment, ATVs, hinterland travel, and lubricating oil. They also eliminated APNU’s requirements for police clearance to transport fuel and road licenses for mining equipment.

“These measures brought the miners’ final income tax down from 3.5% to 2.5%,” he added, emphasizing the administration’s support for miners.

Source: Guyana PIS