Key institutions to be strengthened in preparation for oil boom

Nov 29, 2017 ExxonMobil, News

Many citizens are concerned about Guyana’s vulnerability to poverty and corruption when it becomes an oil-producing nation. It is often stated that oil can be a blessing and can just as easily be a curse for producing nations.
Several experts have noted that with Guyana’s frail institutions, oil may end up being a curse. The government of Guyana has seemingly paid heed to this notion, and is now looking to increase the nation’s prosperity potential through the strengthening of key institutions. Budget 2018 caters for this forecast.
As he delivered his Budget 2018 speech on Monday, Minister of Finance, Winston Jordan said that literature is replete with examples of natural resource dependent-economies being prone to greater income inequality.
“We must, as a Government, as a Parliament, and as a nation, guard against falling victim to the pitfalls that this new stream of oil resources might bring,” said Jordan.
The Minister continued, “Indeed, Government will ensure that resources are prioritized for immediate catalytic development needs, stabilization and intergenerational savings. Budget 2018 and going forward will see resources being allocated to strengthen systems and institutions to ensure greater accountability and transparency.”
Agencies such as the Guyana Revenue Authority (GRA) and the Environmental Protection Agency (EPA) are in need of strengthening, especially in the context of what is ahead for Guyana’s oil sector.
Jordan also indicated the government’s foresight to avoid the fate secured by nations who depended too much on oil.
The Minister noted that oil is non-renewable and finite. He added that the world is looking for renewables “and, one day, in the future, oil will not be the preferred source of energy.”
Jordan said that when that day approaches, Guyana must be able to look back knowing that the choices made today, and the immediate years ahead, “positioned our sectors and industries to be stronger, more diversified and resilient. We must diversify our production and income-generating base to ensure sustainability. This must be our collective goal to which this budget is directed.”
Jordan said that Budget 2018 also contains allocations to strengthen and grow Guyana’s private sector as well as to improve the efficiency and robustness of the public sector.
The Minister said that it is only by matching the opportunity of additional resources with strong human and institutional capacity that Guyana will be able to create sustainable sources of economic and social development across the length and breadth of this land, and avoid mismanagement that is so often associated with natural resource extraction.
“As we begin the transition to an oil-producing nation, Government must and will implement prudent structural reforms and fiscal safeguards, strengthen our institutions, prioritise the development of our human capacity, and diversify our growth portfolio. The Agenda for 2018 is a product of our reflections on our mid-term as a Government and repositioning and reprogramming, based on lessons learned, in our inexorable march to achieving the Good Life,” said Jordan.

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