‘Don’t allow oil money to cloud assessment of the dangers that lie ahead’ - New York based Lawyer

‘Don’t allow oil money to cloud assessment of the dangers that lie ahead’ – New York based Lawyer

Oct 20, 2022 News

By Kiana Wilburg

Kaieteur News – Given the remarkable quality and scale of Guyana’s oil discoveries, many stakeholders have agreed that its monetization and prudent use could result in meaningful economic transformation; the kind that truly uplifts the standing of all citizens.

To do so, however requires a candid assessment of the country’s systems for governance as well as its ability to protect itself against the dangers that lie ahead, says New York based Lawyer, Dr. Vivian Williams. During his first appearance on Kaieteur Radio’s Programme, ‘Guyana’s Oil and You’, Dr. Williams articulated the need for policy leaders to be mindful of the dangers that lie ahead with managing oil resources.

NY based Attorney-at-Law, Dr. Vivian Williams

Dr. Williams said it is critical that the judgment of Guyanese and their leaders by extension is not clouded by the volume of oil dollars that will be pouring in on a monthly or quarterly basis. The Lawyer said, “Oil and gas hold great promise for prosperity. But what the experience of other countries has shown us is that the excitement that bubbles over when there is the discovery of any sort of resource such as oil, is that it leads to an excitement for progress that can cloud an honest assessment of the dangers that lie ahead.”

He said what the trend has shown from other jurisdictions is that resource rich countries are often times at great risk for contracting the dreaded ‘Resource Curse.’ He noted that this curse occurs when a country’s oil discoveries, for example, results in there being adverse effects on a country’s other revenue earners like agriculture. That resource, and the desire to manage it, also has adverse effects on the social or political wellbeing of the nation.

Dr. Williams said he has observed that much of the conversation has been on guarding against the ‘Dutch Disease’ which is often lumped as being the same as the ‘Resource Curse.’ The lawyer said the ‘Dutch Disease’ is just part of the economic conundrum that destabilises a country.

For readers unfamiliar with the term, ‘Dutch Disease’, it is a shorthand way of describing the paradox which occurs when good news, such as the discovery of large oil reserves, harms a country’s broader economy. It may begin with a large influx of foreign cash to exploit a newfound resource. Symptoms include a rising currency value leading to a drop in exports and a loss of jobs to other countries.

With projections from financial institutions such as the World Bank, the International Monetary Fund and the Inter-American Development Bank all noting that oil will account for more than 55 percent of Guyana’s Gross Domestic Product this year, Dr. Williams said Guyana is therefore at risk of attracting the ‘Dutch Disease’ and the ‘Resource Curse’ by extension.

Dr. Williams noted however that for him, Guyana was seeing signs of the ‘Resource Curse’ since the 2020 General and Regional Elections. “The State became a grand prize as political actors and rebels were fighting for the State as a prize because of the control and dominance that comes from that office. It was even called the ‘Mother of all elections’ and each side was like ‘we can’t lose this.’ So for me, the predictive elements of the curse were evident since then and the country will now be in a perpetual electoral contest,” expressed the Lawyer.

Expounding on the impact the emergence of oil will have on the nation’s political and social wellbeing, he said one can expect to see signs from political actors using all sort of mechanisms to dominate and wipe out their opponents. He added that stakeholders can also expect to see flare-ups, and seeds of discontent and discord being sown, all of which will drive ‘rebel behaviour.’

Dr. Williams said these ills do not spring up overnight; adding that they must be carefully monitored. He cautioned that it is imperative the Government keeps an eye on these matters and share with citizens, its progress on plans to address same.