Watchdog institutions in Guyana getting weaker as country gets richer – Opposition

Jan 11, 2023 News

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…Exxon’s 3^rd oil project will push country pass T&T with higher GDP per capita

Kaieteur News – Guyana’s third oil project which is set for commissioning this year will give the country another massive boost propelling it among the richer countries in the Caribbean based on its Gross Domestic Product (GDP) per capita. Guyana is currently ranked as the fastest growing economy in the world and the US$9B Payara project, which is more than double the country’s biggest budget so far, is schedule to further prop up sums due to increased oil and gas revenue.

Guyana’s GDP per capita is expected to push past Trinidad and Tobago, and possibly land in brackets with Barbados and St. Kitts. World Bank figures as recent as 2021 reported Guyana GDP per capita figure at around US$10,000 while Trinidad, Barbados and St, Kitts were recorded around, US$16,000, US$17,000 and US$18,000 respectively. Taking the country’s growth last year into consideration, as well as projections for this year 2023 with a new FPSO, Opposition Economist, Elson Low believes that Guyana is significantly poised to distance itself from the description it once carried as second poorest country in the Caribbean.

He told the newspaper that news of the country’s continued growth leaves a lot to be desired where institutional capacity is concerned. He related that while Guyana is likely to push pass Trinidad’s oil economy, but still lacks the ability to deliver audited accounts of the oil and gas sector, and has already missed two deadlines.  “What these audits show is that as Guyana is getting richer its institutions are getting weaker, which is a classic symptom of the resource curse,” Low said.

He told the publication that the Opposition is preparing to raise a number of disturbing issues it has noticed with the oil sector, as Guyana’s condition “mirrors” problems seen in other oil-producing nations. He said, “Not auditing Exxon on time, and then potentially delivering a flawed audit, as well as failing to build auditing capacity are government failures.”

In a recent report, Low said that the expenses that incurred in oil development and production must be monitored as closely as expenses that come from building roads. “As a result, building our auditing capacity and oversight mechanisms is critical to national development.” He said the reason the Opposition repeatedly called for capacity building especially in the area of auditing, “is so we can better assess expenses on a short term, regular basis, even while we have comprehensive audits from time to time. Parliamentary oversight is an additional lever. All these mechanisms can be leveraged to ensure Guyana benefits fully from its oil resources.”

International organizations and experts have been warning Guyana to build its capacity at the same pace that it is developing its oil and gas resource to ensure protection of its country and revenue. Up to last year, the government had failed to utilize a US$20M World Bank loan which was secured in 2019 to add training and skillsets to state agents involved in the management of the oil sector. That was despite the institution positing that the smallest effort made by the country to improve its oil and gas management under the loan, translated to huge improvements in the amount of revenue the country gets from its oil resources.

The money was geared to support the capacity building of key institutions such as the Guyana Geology and Mines Commission (GGMC), Department of Energy, Environmental Protection Agency among others, by providing critical training and insights regarding petroleum data management, and strengthening fiscal, environmental and social management. Since the loan was secured under the A Partnership for National Unity +Alliance For Change (APNU+AFC) government, new the People’s Progressive Party government said the World Bank loan was on hold since it wanted the projects scope to realign with the new administration. Kaieteur News recently reported that the government utilised a portion of the US$20M World Bank loan to improve its access to reading materials on the oil and gas sector. Documents published by the Bank said that US$32,194.86 was used to hire vLex Justis Limited of the United Kingdom, to supply legal software for Guyana’s oil and gas sector. It was said to allow for more efficient legal representation through access to up-to-date oil and gas articles, journals and books. A two-year contract was signed on August 24, 2022.

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• economy, Gross Domestic Product, Guyana, oil project, Payara project

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