Using the oil revenue

Jul 16, 2018 Letters

Dear Editor,
Having reviewed Tuesday’s presentation, Rystad’s analyst showed that with an oil price of $70 per barrel, annual revenues from offshore activity could reach $20 billion shortly after 2030. Based on my interpretations of the breakdown of revenues, it looks like a vast majority of those numbers come from free cash flow and government profit oil.
These are very impressive figures especially in the context of the current size of our economy and this new fortune can be the catalyst for exponential growth and transformation at unprecedented levels.
But the big question remains. How does Guyana utilize these earnings? How would these profits be best allocated to ensure maximized benefit on a sustained basis? Do we build new schools, hospitals, airports, roads and bridges? Do we seek to enhance existing service and production sectors? Do we focus on developing new/non-traditional sectors?
While opinions on this may vary, a common point of reference has always been the Dubai Model. Why? Dubai has successfully utilized the profits from its oil to fund a service-based economy to a level that has earned global respect.
Admittedly conditions between Guyana and this Arab country may not be identical, but irrespective of geographic, hemispheric, economic or population-related differences, diversification remains the best tool to remain relevant in a constantly changing global economy.
While emphasis needs to be placed on improving infrastructure and social services, the focus should be on identification of new sectors, which can be fueled (no pun intended) by revenues earned from Oil and Gas.
Regards,
Andrew McBean

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