Taking into consideration the fact that the Irfaan Ali-led government estimated a budget of US$29 million for the implementation of its COVID-19 response plan, as well as the fact that millions of dollars in tax relief was granted during this difficult period, Guyana may very well end up with a response bill totaling US$1.25B.
This was highlighted by the Inter-American Development Bank (IDB) in one of its latest reports attached to a loan proposal from Guyana for US$34M.
The bank noted that the tax relief measures introduced during the pandemic would amount to US$96 million, for an estimated combined total of approximately 3.1% of Gross Domestic Product in 2020, similar to the average for Caribbean countries.
To support these measures and ease liquidity constraints, the government it said, intends to obtain US$60 million in loans from multilateral organizations and other development partners, the IDB being one of them.
In Guyana, the bank was keen to note that the COVID-19 crisis has negatively affected the living standards of nearly all people. In April of 2020, the bank recalled that it conducted an online survey of 1,691 households to measure the socioeconomic effects of the COVID-19 crisis. This revealed that 71.6% of the households reported an income loss. The percentage of households with total income under the minimum wage increased from 13.9% in January 2020 to 44.7% in April 2020.
The survey also revealed that the employment shock was unequal across gender, as 44.8% of women declared that they had lost their jobs compared to 36.6% of men. Also, around 45.6% of households reported eating less healthy meals than usual. Furthermore, low-income households were particularly affected by changes in diet and food security. The week prior to completing the survey, 55.9% reported eating less healthy than normal and 31.4% went to bed hungry.
Given the severe impact of the COVID-19 health crisis on economic activity, the IDB was keen to note that the post-pandemic period will require structural reforms to rebuild the economy and sustain fiscal performance.
In that regard, the PPP/C government established a Taskforce to address four main areas related to the COVID-19 crisis: (i) education; (ii) enforcement; (iii) testing, tracing, and treating; and (iv) national economic recovery. The government also submitted the Appropriation Act 2020, approved on September 30th, 2020, which includes the estimates for revenue and expenditure for the fiscal year.
In addition, the government is promoting the development of a modern and competitive environment for telecommunications, which is expected to lead to greater choices, better quality of service, and lower prices for consumers. The legislation specifically addresses the expansion of telecommunications networks and services into unserved and underserved areas through the institution of a new universal access/universal services programme.
