Oil Revenues Invested in Social Spending but more so in Industries Generating Wealth and Jobs

Jul 19, 2020 Consumer Concerns, News

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CONSUMER CONCERNS:
By Pat Dial

Some time ago, this column had carried the position of the Guyana Consumers Association (GCA) on the use and protection of the country’s prospective oil revenues.
Over the last several months, the country and the information media were completely distracted by the COVID-19 pandemic and the weird political entanglements which had enmeshed the country.
Foreigners wrote and spoke more about Guyana as an oil country than Guyanese themselves. The GCA felt it was timely to place oil again into the consciousness of Guyanese people.
We should begin by reminding that there are several templates of how to treat oil revenues, as for example, the Norway model or the Sovereign Wealth Fund. The Sovereign Wealth Fund seems to have caught the attention of the financial authorities of the state.
Very few persons are, however, informed about the how the fund would operate and the population must be fully and constantly informed as to how any model that is adopted operates. Below, we give a short synopsis of the way we think the oil revenues should be deployed. Our allotted space is too limited to encapsulate our full position:
(1) The population of Guyana does not wish any political party to control the oil revenues. We are therefore suggesting the establishment of an oil corporation, which should be as independent as possible. Its directorate would consist of representatives of the Parliamentary political parties, the private sector, labour, representatives of NGOs and any distinguished Guyanese representatives who may be employed in the oil industry abroad.
(2) The staff of the corporation should be world class and should be recruited not only from Guyana and the Caribbean but internationally. Our international friends, including India or China or even Russia, could be invited to give some “technical” advice. It may be important to have competent Guyanese understudy with every important post.
(3) One-third of the oil revenues should be allocated to be spent on the immediate well-being of the population on things including increases in pensions and salaries; health and education; tending the old and disabled and in other critical areas.
The salaries of the public service should be increased to the extent that the service could attract entrants of the highest calibre who will be making a career in the service.
Such a public service would be free of political pressures and undue influence and would resemble that of colonial Guiana.
(4) The other two-thirds of the oil revenues should be committed to investments in wealth generating industries. Such industries would ensure Guyana’s place in the First World since the economy would be strong and resilient and providing full employment. Such industrial development would be accompanied with quick infrastructural development.
The present agricultural, mining and forest industries should be addressed immediately.
Sugar and rice, with adequate financial investment and creative management, could bounce back into the economic backbone of the country. So would other subsidiary crops such as fish farming and fishing, fruit and flower farming as well as ground provisions and bananas and honey.
With adequate investment and creative management, Guyana would be very competitive in the world market and could take immediate advantage of the US$6B Caribbean market.
In time, other new industries would be ventured into, some of these related to the oil industry. The infrastructural development would not only be confined to roads, bridges and a railway running into the interior but would include hydro, solar and wind power.
(5) To accommodate the financing of the modernization of the present industries and the establishment of new ones and in particular to assist small businesses and entrepreneurs, a Development Bank should be established.
(6) As Guyana enters into the new era of social and economic change, the environment must be carefully monitored. In addition to the present environmental issues, which are being addressed, oil has to be considered in its own right. Such would involve oil spills, on-shore operations of the industry and the preservation of fish and shrimp stocks and other marine life.
(7) Immigration and settlement has always been a concomitant problem of every oil-producing country and each has addressed it differently. The Immigration and Citizenship Laws of the country should be immediately revised to include such elements as every prospective immigrant should be able to speak and write English; should have some knowledge of the history of Guyana; should be bringing some skills or capital investment needed in the country.
As in early America, the ancestral countries of the Guyanese population should be granted a quota according to their present percentages of the population.
One of the main objectives of the immigration policy is to build an integrated society from the inception and to preserve and have a continuum of the culture and way of life of the Guyanese people and avoid them being overwhelmed by the new immigrants.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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