Will Guyana’s oil wealth be a curse or a blessing?

Jul 25, 2016 News

– Govt. to implement policies to ensure benefits

By Abena Rockcliffe- Campbell

Minister of Natural Resources, Raphael Trotman

It has been confirmed that Guyana’s oil reserve is indeed huge. But, just before the average Guyanese jumps for joy, they should stop to wonder, “What does this really mean for me?”
Quite a few oil rich countries suffer from serious disparities, with a few being excessively wealthy and others being poor.
Middle class is often found to be almost non-existent, like in the case of countries such as Nigeria, Saudi Arabia and closer to home Venezuela. In a country with vast oil wealth and lavish royalty, an estimated quarter of Saudis live below the poverty line, the reality is similar in Guyana’s neighbouring country—Venezuela.
Neftegaz.Ru—a site that reports on matters relating to oil and gas—had published, “Countries that depend on oil for revenue bask in wealth, but overwhelmingly suffer what the Economist has called a ‘poverty of policy.’
Oil rich states manifest some of the greatest inequalities imaginable. Besides lacking transparency, press freedom and accountability, they tend to have stratified social classes with a tiny minority earning millions while a vast portion of the population wallows in abject poverty.”
Many oil-rich counties suffer from the “oil curse” which is the high presence of the issues highlighted by Neftegaz.Ru. Of course there are a few exceptions like Norway, Canada and the United Kingdom.
But the coalition government has already decided to put measures in place to guard against traits of the curse. This is according to Minister of Natural Resources, Raphael Trotman.
Trotman and the Minister of Finance, Winston Jordan recently returned from Uganda to see if Uganda has been able to begin preparations for oil production as well as the wealth to come.
“We needed to see how a developing country with similar challenges is dealing with issues of underdevelopment, social issues and education and so on.”
“Jordan and I were able to relate to happenings in a country that mirrors ours in many respects. We thought that being able to observe how a developing country is responding to petroleum becoming the dominant driver of its economy was worthwhile for us to see; rather than going to observe a first world country where oil has been around for a long time.”
The Minister said that he and his colleague were able to meet with persons at various levels. They visited Uganda’s Ministry of Energy and Development and had discussions with officials there.
Trotman said that they got an opportunity to look at and understand the various legislative steps that Uganda has taken for the well being of its citizens.
The Ministers got to see Uganda’s development of Local Content Polices (LCP).
According to the World Bank, “Foreign capital in mineral and petroleum producing countries has historically driven investment and employment. But the most valuable contribution to long term sustainable and inclusive growth comes from the ability of the extractive industries to generate further benefits to the domestic economy beyond the direct contribution of its value-added, through productive linkages with other sectors.”
However, it was also noted that while LCPs have the potential to stimulate broad-based economic development, which is necessary to alleviate poverty, achieve prosperity and ensure sustainable economic and social outcomes, their use has achieved mixed results.
“This is a big issue throughout the developing world. It’s about how you get your own people trained and involved to benefit from the industry,” Trotman said.
He added that Uganda has already developed a policy in this regard and has introduced regulations emulating from that policy. “We were able to get copies of that and other policies.”
The Minister said that the coalition government will “most definitely” be looking to establish similar policies.
“We were very interested in seeing how they were able to get the Ugandans involved.”
Trotman said that the involvement varies from Ugandans working directly with oil firms to catering, trucking and providing other goods and services.
“That is something that we are very keen on. It is something that is already coming up in Guyana. Every day somebody may ask how I can benefit.”
Trotman said that he intends to add the knowledge acquired from the Uganda trip to what has already been discussed so that Guyana can formulate the strongest possible LCP.”

2 thoughts on “Will Guyana’s oil wealth be a curse or a blessing?”

Arthur Young July 25, 2016 at 7:03 am

Dutch disease has already infected Guyana. Gold is the only major revenue earner. All the other sectors are stuttering. Oil will be no different. “That men do not learn very much from the lessons of history, is the most important of all the lessons of history” – Aldous Huxley.
rs dasai July 25, 2016 at 2:50 pm

Always a blessing.

Comments are closed.

Latest News