Skills gap could hamper success of Local Content Legislation

Oct 13, 2022 News

– Country needs to tap Diaspora, reform business culture – Professor Lucas

By Kiana Wilburg

Kaieteur News – With Guyana still in the first year of implementing the Local Content Legislation, stakeholders are in agreement that it is too early to use metrics to determine its true impact. Until such time that a proper assessment of that nature can be done, there are certain inescapable realities which authorities will have to contend with going forward. How well they deal with such difficulties will determine the extent to which the country will be successful.

The foregoing perspective was recently proffered by Dr. Leyland M. Lucas, the founding Dean and Professor of Management at the University of Guyana’s School of Entrepreneurship & Business Innovation (SEBI).

University of Guyana Dean, Dr. Leyland M. Lucas

During a panel discussion hosted by the Guyana Business Journal and moderated by Dr. Terrence Blackman, an Associate Professor of Mathematics, Dr. Lucas said Guyana’s success with its legislation is inextricably linked to how it deals with the current shortage of skills needed for the new industry. He posited that rapid skills development is critical not just for the technical aspects of oil and gas but also for the low hanging fruits of local content.

Dr. Lucas said: “there are some realities that we must bear in mind when having a conversation about local content and its effectiveness. There is no perfect piece of legislation and what has been created will go through several iterations over the years simply because we have to deal with the realities of our environment.”

He continued: “we are implementing a policy at a time when many of the skills that are necessary to really take advantage of what I would call the high end opportunities just do not exist within the system. Therefore, one of the critical things will be skills development and how quickly we can do this.”

While he posits that skills development is critical, Dr. Lucas said stakeholders must bear in mind that the skills vacuum will not be fixed overnight. Dr. Lucas said, “there will be a number of development initiatives that will have to take place; some will involve short courses or quick turn-around programmes and others will involve taking advantage of more long term opportunities. So one of the questions we really have to grapple with is how quickly do we ramp up those trainings; how quickly do we take advantage of some of those local content opportunities while at the same time ensuring that quality does not suffer.”

Tap into Diaspora talent

As authorities lend their abilities to such a task, he recommended that due consideration be given to summoning the Diaspora’s talent. He said a structure needs to be established to do so as quickly as possible, even if it has to be virtually.

Also paramount to Guyana’s success he said, is the reform of the business culture and ethics. He alluded that the oil and gas sector requires a very high standard of overall responsiveness which most in the domestic sector are not accustomed to. He said businesses that are to be utilized in the 40 categories of work ring fenced in the law, could prevent targets from being met if their performance is also ineffective.

Expounding further, Professor Lucas said, “We have to understand that although we have a domestic business sector that too requires development of competencies. The way we used to do business cannot be the same going forward. We need to get businesses to understand that they need to transition with a sense of timeliness etc so that they can take advantage of relationships with some of the international companies.” With the skills gap to contend with, Dr. Lucas said it is clear that there will be in-efficiencies in the system, simply because of the way locals are accustomed to doing business.

Dr. Lucas suggested that Guyana may very well find itself in a position where it has to modify the criteria for local content so that it can expand the pool of talent it can use to build its rapidly expanding oil sector.

Overall, he said it is critical that the government examines the oil and gas sector and its impact on soaking up labour from competing industries. Given the foregoing factors, he said Guyana will no doubt see varying amendments to the law to ensure its success.

LABOUR MARKET CONSULTANT

Conscious of the migration of labour from traditional sectors into the oil and gas industry, government had said a few months ago that it has engaged a consultant to analyze this state of affairs and provide immediate solutions.

In its 2022 Mid-Year Report, government said the consultant will review gaps in the labour market and support the design of training and appropriate policy advice to resolve the ongoing issues. With just a population of about 700,000 people, a report by the International Organisation on Migration (IOM), had highlighted that the foregoing review would be urgently needed since the country could face a labour crisis with the emergence of the oil and gas sector.

The report states that if Guyana were to harness all of its unemployed, underemployed and discouraged workers, the potential supply of labour would be only 63,500 the medium-term. It goes on to state that Guyana will need approximately 160,000 workers. It concluded that there will be the need for, at minimum, 100,000 workers in Guyana to realise its full growth potential.

With this in mind, the IOM said it is crucial that Guyana understands that it needs to tap into its Diaspora potential and urgently produce a structured migration policy, informed by evidence-based analysis.

The document noted, “Guyana has a large Diaspora around the world, particularly in the US, UK and Canada, this pool of Guyanese workers is said to number about 550,000 many of whom are considered highly skilled. It is therefore recommended that structured engagement with the Diaspora ensues so this skill set can be utilised to contribute to its maximum potential.”

Simultaneously, the IOM stated that the Government must ensure the Guyanese workforce benefits from significant training for those without skills, retraining for those whose skills may be mismatched with the demand in the economy, and upgrading of skills for those who may have skills but are unable to operate in an intensified competitive environment. Equally crucial, the organisation said, is for there to be an understanding of the type of labour, which is needed as the country moves deeper into the oil and gas era. Towards this end, the IOM said there is need for the establishment of labour market information systems (LMIS) which can be handled by a labour market information centre (LMIC). It was explained that an LMIC can be a bureau of Government which does research, analysis, and forecasts. This agency would have the principal responsibility of analysing the labour market, forecasting trends, understanding labour market gaps, collaborating with agencies such as the Bureau of Statistics, evolving the Central Recruitment & Manpower agency and advising government on policy.

Overall, the IOM said the Government has taken several steps in the right direction however, reforms, innovation and modernization, will be needed to ensure that Guyana can handle an explosion of growth in migrant workers coming into the country.