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Dr. Terence Yhip’s book on Guyana’s oil is a must read
Dear Editor,
Terence Yhip, a Ph.D from McGill University, is a solid as they come with outstanding academic and professional credentials in banking and finance in various international settings. He taught briefly as a Visiting Fellow at University of the West Indies, Mona. He has written a textbook on credit risk and lending. He hails from Canje, and, despite his decades abroad, he has not lost his authentic “Berbice brogue” accent. In 2020, he wrote and published “From Rags to riches; Is Guyana ready for the oil boom”. It discusses the pros and cons of Guyana’s oil boom, and the risks of resource curse and Dutch disease. In layman’s language, the book explains a production sharing agreement (PSA) so the general public may understand the 2016 ExxonMobil Production Sharing Agreement and its gross inequities.
The book has just been updated with a new Preface that brings the reader up to date with the major economic developments, including the new PSA and what it means for new contracts outside the Stabroek Block. It is available on Amazon and at Austin’s bookstore. A Kindle electronic edition should be out before the end of this year. The following gives a flavour of what to expect:
- Guyana is experiencing a growth surge, which is not unique to Guyana. The surges, typical of oil-rich economies, usually give way to growth deceleration and even economic stagnation. What’s more, the countries remain resource-dependent;
- The oil money is being used for productive investment transportation, human capital (hospitals and schools), housing, and energy. The Gas-to-Energy Project is the largest capital project that Guyana has ever invested in. No energy, no growth and economic transformation;
- US$1.5 billion has been saved in the Natural Resource Fund, a positive start compared to other oil-rich countries that had been exporting oil and gas for many decades and have little, in absolute dollars or in proportion to the tens of billions earned;
- The government’s emphasis on growth rather than blanket income distribution, much leaking out in imports, is a wise decision;
- A reminder to policymakers that growth and development is not a sprint but a marathon. Guyana has proven to the rest of the world its capacity for growth; it must also prove its capacity for development; and
- The provocative but honest question that comes at the end: Can Guyana go ‘from rags to riches and to rags?
The book neither applauds nor disparages political parties, political leaders, or governments of the day. However, while Dr. Yhip gives the current government credit for laying the foundations for future growth and development, he cautions against the governance risks that tend to accompany “oil money”: Unequal distribution of economic opportunities, and uncontrolled spending that would cause macroeconomic instability and lead to Dutch Disease, all of which would deepen the racial divisions and trigger a brain drain.
The book is an excellent and timely work which anyone having anything to do with managing Guyana’s new found wealth would do well to read. Can Guyana go ‘from rags to riches and to rags again? You are invited to read the book for the necessary information and analytical tools to make your own judgement.
Yours faithfully,
Sieyf Shahabuddeen
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