Avoiding the pitfalls of an oil economy

Jun 10, 2015 Letters

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Dear Editor,
Guyanese welcomed the recent news about a significant oil find by ExxonMobil in the Stabroek Block. Indeed, there appears to be an understandable hype about the prospects and the anticipated ensuing benefits of this precious resource to the country as a whole. But exporting oil by itself does not transform poor countries into flourishing economies.
Still the discovery of an oil find in commercial quantities could cause us to rethink our economic development and the way1 we approach the natural environment.
Notwithstanding that, this hype should be tempered with a deep sense of environmental responsibility and an ethical approach to the way we exploit this natural resource.
At the moment, there is a curious trend that economists refer to as resource curse. It seems to be the case that on average resource- rich nations have underperformed against countries with smaller resources but of course not all resource rich countries have underperformed. There are some notable examples of natural resources appearing to ruin a country: Sierra Leone’s diamonds negatively affected the fabric of that society, Nigeria’s oil facilitated corruption of the political class. Botswana managed its diamonds to produce the fastest growing economy in the world and Norway used its oil to achieve the world’s highest living standards.
This view of a resource curse is perhaps the most troubling one for countries that are really struggling to transcend poverty. The revenues that they could garner from natural resources are enormous dwarfing any conceivable flow of aid. These assets could assist such countries to escape the evil grasp of poverty.
Perhaps, the difference between those resource- rich countries that underperform and those that do well is the approach to environmental management, and governance.
Environmental governance is particularly concerned with the processes of decision-making with respect to the control and management of the environment and natural resources. It also has to do with the steady interaction, formal and informal, of main factors including but not limited to state, market and civil society to make and implement policies, to achieve environmentally- sustainable development.
Some of its key principles include embedding the natural environment in all levels of decision- making, seeing cities and local neighbourhoods, communities, economic and political life as a part of the total environment and placing emphasis on the connection of people to the ecosystems in which they live.
Understanding that, Guyana, in this period of our history and in the context of the global environmental situation, must pay keen attention to, at least, two vital things:
First, good local environmental governance: Clearly, the protection and preservation of the integrity of our natural environment must be based on solutions and initiatives at the local level designed with and by local communities.
Heavy community awareness, participation and strong partnership supported by decentralisation of powers to local communities are very crucial components of local environmental governance. This is a shift from earlier approaches, which were propelled by state agendas and resource control and top- down approach.
In essence, it puts the public back in the picture at the grassroots level. This would allow for a new institutional framework which permits communities in decision- making regarding access to and use of natural resources.
This could be encouraged by formal and informal regulations processes such as consultations and participative democracy, and social interactions. This could be supported by conditions of access to social capital, including local knowledge, leaders and local shared vision, and democratic access to information and decision-making.
Second, good environmental stewardship: This is a very nebulous concept but it is vital to sustainable development of our economy.  Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
It is predicated upon the pillars of economic, environmental and ecological, economy and equity and governance.
Again, good environmental stewardship is concerned with transforming natural resources into value for both the present and future generations. Mankind’s task is not to be curators of our natural assets but transformers of value.
It is in this context; President David Granger’s action to set up a National Sovereign Fund, to save and invest a portion of the revenues from our natural resources is particularly relevant and vital to the wellbeing and future of our next generation. What really matters is not that we have found oil but exactly how the revenues generated from it is shared and utilised.
Royston King
Executive Director
Environmental Community Health Organization

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