Guyana’s influx of Venezuelans – an economic perspective

By Mark DaCosta- In recent times, Guyana has witnessed a significant influx of Venezuelan refugees, with estimates ranging from 29,000 to a staggering 60,000. While international economists often debate the long-term benefits of hosting refugees, the reality is that a sudden and substantial influx, especially into a country with a modest population like ours, carries notable and immediate negative consequences for our people.

As our country, with a population of approximately 750,000, grapples with this influx, it is essential to carefully and thoughtfully navigate the complex intersection of international obligations and the pragmatic needs of our native population. The People’s Progressive Party (PPP) government must formulate policies that address the economic, social, and political impacts of a large refugee influx. This article focuses on the economic dimensions.

First and foremost, let us consider the reasons behind the Venezuelans seeking refuge within our borders. The dire situation in Venezuela has forced many to flee in search of safety and stability. The economic and political turmoil in their homeland has propelled them towards seeking a better life outside of Venezuela, Including in our nation.

Now, turning our attention to the economic impacts on Guyana, it is crucial to acknowledge the insights provided by experts and reputable international organisations. As Economist Paolo Verme from the World Bank aptly points out: The sudden arrival of refugees can strain resources and create negative externalities, particularly affecting the most vulnerable among native populations.

In the realm of employment, the situation becomes more complex. While some may argue that refugees bring economic benefits by filling labour shortages, the reality may not be so straightforward. Original research, such as a small, non-scientific survey conducted by this writer, reveals a stark reality – unskilled Venezuelan workers undercutting our native workforce, accepting lower wages, and displacing vulnerable Guyanese laborers.

For example, in the construction sector, it is found that unskilled Venezuelan labourers accept payment of $3,000 per day, while native Guyanese are used to being paid $5,000. This fact puts many Guyanese labourers out of work or forces them to accept less money.

As we navigate this challenging terrain, it is vital to recognise that this is not a call for xenophobia or isolationism. Rather, it is a pragmatic consideration of the impact on our native Guyanese citizens. The PPP regime must balance our international obligations with the imperative to protect the well-being of our people.

According to original research, the housing market in Georgetown is feeling the strain as Venezuelans flood in, particularly targeting cheaper accommodations. This surge may not only create a housing shortage in Georgetown, but also, logically, may contribute to rising rent prices, possibly forcing low-income Guyanese to relocate to remote areas. The economic strain further extends to general inflation, with increased demand for household items driving up prices, affecting the affordability of goods and services for our own citizens.

In the health sector, the burden is obvious. Many Venezuelan refugees, working predominantly in the informal economy, do not contribute to taxes, leaving Guyanese taxpayers to subsidise their healthcare. This added pressure on our already stretched healthcare system raises concerns about the sustainability of such arrangements.

While our nation must honour international humanitarian obligations, our leaders must remain vigilant to the needs of our own people. This is not a plea for exclusion but a call for a balanced approach that safeguards the interests of our nation while upholding the principles of humanity.

This article – it is hoped – has shed light on the negative economic impact of the influx of Venezuelan refugees on our beloved Guyana. Subsequent articles will delve into the political and social aspects of this complex issue, providing a comprehensive understanding of the challenges and opportunities that lie ahead for our nation.

Our commitment to compassion and responsibility should guide us as we navigate these uncharted waters, seeking solutions that prioritise the well-being of our citizens without losing sight of our duty as global citizens.