Latest update January 3rd, 2025 2:50 AM
‘Local content desires should have been built into existing policies’
…Professor Thomas says resort to legislation signals poor governance, lack of trust
Kaieteur News – The debate over Guyana’s desire to give its people first jump in certain business areas within the oil and gas sector is one that should not be happening since it is expected that any country would give its citizens some type of preference to ensure they benefit fully from their natural resources.
Economist, Professor Clive Thomas says CARICOM is a necessary business platform for Guyana
The need to make the local content document law to convince citizens that their government has them in mind, is in fact a terrible sign regarding trust between the state and its citizens. This is according to Economist, Professor Clive Thomas who said during the talk show, Politics 101 that Guyana has now placed itself in a position to be challenged for introducing the law that weakens the right to competition. “I believe that Guyana should have never passed any law relating to local content. Once you have a law on the books, you could be taken to the World Trade Organisation (WTO) and there you can be challenged for introducing laws that negate the right to competition.”
It is for this reason, Thomas offered, that he felt the local right should have been placed into existing policies. “I felt that anything like a local content law should be built into the regulations and procedures of the state.” “But that means, you would have to have a government that has the confidence of the people and the sectors that are engaged in production and services and professional services and so on.” Thomas continued that this confidence would allow the State to be able to manage local content in a way to give citizens a built-in advance without putting it in writing.
Thomas went on to explain that protection of the Guyanese market has to be done by skillfully committed persons that the government would have elected to represent the people. And in the execution of these duties, it would be expected that those elected would also have the confidence of the people to work around regulations, “through informed common consent,” about the way forward.
“But that means that the government must have high reputation among its constituents to behave principally…, “Thomas reiterated. “Once they (citizens) begin to doubt your credentials, your honesty; doubt your evenhandedness, your fairness… once the government degenerates to the point where people feel they only give to their friends… they want to see it written down.”
The economist likens the local content dilemma to the transparency issues surrounding the natural resource fund. He said that he does not believe that the right of the government to make decisions on how to invest money in oil and gas should be given to any one or group claiming to more impartial or clairvoyant that the government because they were elected with those responsibilities.
“It’s a sign of government’s failure; poor governance that people should expect that there should have an oversight committee to make sure that government spends the money the way it must be sent. This is not the proof of good governance; it’s a consequence of bad governance,” Thomas insisted.
The local content matter in Guyana has attracted attention from neighbouring Caribbean nations (CARICOM), particularly Trinidad and Tobago (TT) where business tycoons in that oil-producing nation now want in on Guyana’s oil and gas fortunes. The TT business people have argued that Guyana’s local content is contentious toward the CARICOM Treaty of Chaguaramas that gives Caribbean people equal rights to work and trade among other things. There is also a debate as to whether Guyana can opt out of the CARICOM agreement. However, on the economical side of the argument, Thomas said that CARICOM remains an important platform for any developing engagement of Guyana and the wider world. Thomas suggested that Guyana’s economy is too small and narrow to get the economies of scale to make it profitable to produce at the level that can compete with imports.
“But with the CARICOM and CARICOM’s protection, we get the opportunity of having a platform on which to build some of these capacities. So to call for the removal of CARICOM single market is very a nonsensical idea because the whole idea is that Guyana by moving into the production of oil and gas and having that capital that if you pursued it, would now move into the category of major exporter to CARICOM instead of being a major importer from CARICOM.
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