The new economic strategy

Jun 23, 2017 Features / Columnists, Peeping Tom

The government has an economic strategy. The title of the strategy consists of a mere three words. Those words are NOT “the green state”. The words are “wait for oil”.
The economic strategy of APNU+AFC can be summed up in the words “wait for oil”. This is the master plan of the government: wait for oil.
ExxonMobil has told the government what it wants to hear. It says it will be investing billions in the production of oil from the Liza well.
The government has the investment decision for which it was waiting. It now has no need to bother with any economic strategy, because it has a sure winner in the petroleum industry.
The government therefore does not have to worry about developing any national development strategy. It has to worry about finding the people and the money to design such a national development strategy.
Gold production is growing the economy all by itself; it does not need help. The growth problem is therefore taken care of. The next problem is to find revenues, and this is where the oil revenues will come in. The government’s problem is therefore solved. Why have to worry about industrialization and all that jazz when Guyana can simply produce oil and spend the proceeds.
The “wait for oil” strategy is not as dumb as it may seem. In fact, it is a very smart strategy.
Why commit to costly economic ventures which may fail when there is a sure hit, oil, which will not fail. Instead of taking economic risks, the government will allow the investor, ExxonMobil, to take the risk and it will reap the benefits. This is a smart economic strategy on the part of government, one which requires no risk-taking and therefore no chance of failure.
The “wait for oil” strategy does not require any investment on the part of the government. It does not entail attracting any additional foreign direct investment. The government has an investor. It has ExxonMobil.
The “wait for oil” strategy is far better than having to go and beg Guyanese in the diaspora to come and invest in Guyana. What will the diaspora invest in Guyana? What is there to invest in Guyana? Nothing!
You cannot even invest in agriculture. What will you do with the production? Where will you sell it? An American-based Guyanese seeing the size of the diaspora population in the USA had a proposal to invest in growing peppers and exporting it to the USA. Well, guess what, the Americans have stopped the importation of pepper?
GuySuco is growing rice as part of its diversification plan. Where will it find markets for this rice? It also plans aquaculture and says that Brazil is a possible market. Why would anyone produce fish at Wales when they can find adequate lands in the Rupununi to produce aquaculture for export to neighbouring Brazil?
What else can Guyana produce which can compete? We cannot compete with anybody right now, because the cost of production is too high.
It is for this reason that the wait for oil strategy is a smart strategy. Oil will be produced and exported. Forget about the refinery. That will not float.
The ‘wait for oil” strategy is better than the green state plans. The green state is not an economic strategy. In fact, not many people understand what this green state is all about and they do not understand it, because it is not a strategy.
The “wait for oil” strategy, on the other hand, means that Guyanese do not have to worry about creating jobs for young people. Those who are not working will, when the oil revenues begin to flow, receive a healthy unemployment benefit each month in the mail. Why work when you can stay at home and receive a fat check from the government, compliments of the oil revenues. Now what can be better than that!

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