The diaspora human capital could play a critical role in the oil and gas sector

Mar 23, 2020 Letters

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DEAR EDITOR,

In a recent article published on Mar 8, 2020, Social Scientist Dr. Lear Matthews pointed out that high levels of skilled emigration tend to slow economic growth and noted that in the case of Guyana, it is, therefore, vital to understand the foundation, purpose, and potential contribution of diasporans. Likewise, the World Bank report on the Ease of Doing Business in Guyana (2019) identified Guyana as having an inadequately educated labour force that impeded sustained development.
As Guyana enters an era of vast revenues from oil and gas production that could transform the social and economic landscape, there is a critical question that arises. Does Guyana have the human capital to foster and sustain transformational change and sustained growth and prosperity?
In an interview in Feb. 2020, former Foreign Affairs Minister, Carl Greenidge, lamented the continuous outflow of Guyanese expertise through migration emphasizing the negative impact on development. His portfolio (2015-2019) included developing policies and strategies to attract and engage the Guyanese diaspora during his tenure as Minister, where he oversaw a diaspora unit staffed with three or four persons. However, estimates put Guyanese living outside of Guyana at 1.8 million. This figure represents the highest per capita migration rate in the world and creates a substantial barrier to sustained development and social transformation.
Challenges
With a population of approximately 800,000 people, Guyana lacks the human capital and capacity necessary for sustained development.
Further, Guyana’s high rate of migration has resulted in a substantial Guyanese diaspora that continues to nurture the connection with its homeland. This significant migration pattern began in the early1960’s when many Guyanese sought opportunities abroad to escape socio-political conflicts in Guyana. Because of the highest migration rate of (83%) of tertiary educated persons in the world and the highest migration rate of skilled persons in the region, Guyana has a significant shortage of qualified persons, as noted by the World Bank.
The combination of brain-drain and the lack of a comprehensive strategy to tap into and harness the human and financial capital of Guyanese living abroad has gravely hampered sustained social and economic development in Guyana.
And although oil revenues can improve Gross Domestic Product, it cannot fill deficiencies in other areas such as the loss of talent through migration. With the recent plummeting oil prices and the uncertainty of the oil futures market, Guyana might do well to shore up institutions and encourage development in other sectors through active diaspora engagement.
How should Guyana reverse the high migration and fill critical gaps to improve performance?
Guyanese living abroad send back over US$400 million dollars every year- remittances.
On the other hand, economists estimate that in 2020 Guyana should receive US$300 million from oil and gas revenues. However, that estimate will be lower because of the drop in oil prices. Remittances from the diaspora account for 17-23% of Guyana’s GDP. These flows remain significantly higher than Official Development Assistance (ODA) and projected oil revenues.
Beyond monetary remittances, the diaspora provides social capital and remittances that include norms, values, beliefs, and expert knowledge acquired from their experience in first world countries. Besides, diasporas contribute by direct investment, tourism, capital markets investment, philanthropy, knowledge transfer, and short term or permanent return to their homeland.
A path forward
Many countries have established institutions to facilitate ties with their diasporas more systematically, including Dominica, Brazil, China, Grenada, India, Jamaica, Mexico, Germany, and the Philippines- to name a few. More than twenty-six countries have a separate diaspora ministry; twelve of these ministries are dedicated solely to their diaspora. Seventeen states have sub-ministry diaspora institutions. Guyana does not have a diaspora institution at the level of a ministry, sub-ministry, or national, or local level.
Diasporas invest in businesses, create employment opportunities, contribute to poverty reduction, and fill gaps institutions, and skilled labour. Diaspora’s expertise in the oil and gas industry can strengthen the O&G sector in Guyana and lay the foundation for effective management and organisational success.
It is crucial for Guyana to develop a robust institution and requisite policies to engage its diaspora effectively to foster nation-building through capacity development and filling deficiencies. The diaspora is willing and ready to assist, as are organisations such as the International Organization for Migration. The United Guyanese Diaspora Global Network is one such organisation whose motto is to “Build Bridges to A Brighter Future for Guyana.”
Budget
A lack of knowledge and inadequate funding affect capacity building by diaspora organisations. Some countries have used a percentage of the amount of diaspora remittances for budgetary allocation for diaspora institutions-India has used a 3% formula. By using that formula, Guyana would be able to allocate US$12 million to a Diaspora Affairs Organization (DAO). In this way, DAO can create attractive packages to attract Guyanese living abroad with expertise in the gas and oil industry and other sectors.
During a meeting with Government Minister Carl Greenidge at the Parliament Buildings in Guyana in January 2016, he informed me that budgetary constraints were affecting his Ministry and, by extension, diaspora engagement funding. In 2020 and beyond that constraint ceases to exist. Recently, Guyana received US$55 million for the sale of the first million barrels of oil. With this flow of oil revenues, Guyana should have no problem appropriating funds to support a robust diaspora organisation to attract, mobilise, and harness diaspora capital to foster nation-building.

Sincerely,
Wayne Forde

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