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Guyana needs independent management of oil account to avoid resource curse – Expert tells U.S. Business Channel
International Energy Expert, David Goldwyn
Kaieteur News – If Guyana is to have a real chance at keeping the “resource” curse at bay, then it must endeavour to have independent management for its oil revenues which are held in its Natural Resource Fund (NRF).
This perspective was proffered by International Energy Expert, David Goldwyn. He was one of the key stakeholders recently interviewed by CNBC, the world’s leading network for financial and business news.
Goldwyn who serves as President of Goldwyn Global Strategies, LLC (GGS), an international energy advisory consultancy, said a Natural Resource Fund should not be perceived as a “silver bullet” or panacea to the resource curse. The industry expert said, “in order for Guyana to avoid the curse they need to get to the next level. First, they have a NRF but they need independent management of that fund as Norway has.” He said too that Guyanese authorities need to have a long term view on investments and avoid wasting that money.
Another key mechanism he said is for government to improve its capacity to manage oil and gas and all other sectors that will see expanded growth as a result. He noted for example that Guyana needs to strengthen its abilities to manage very large procurements such as billions that would be allocated for roads and other critical infrastructure that the country needs. Goldwyn said governments are not always inclined to go that route as it is not politically popular.
He said nonetheless that “without that government capacity, (proper) accounting, and budget supervision, they are going to have a hard time managing that money well.” The energy expert also underscored the need for Guyanese authorities to channel some of the oil capital to the people who need it.
Overall, Goldwyn said the foregoing would be crucial to helping Guyana keep the resource curse at bay. For readers unfamiliar with the term, the resource curse describes the circumstance where a country does worse off with the discovery of a resource in significant quantities. In simple terms, the people are not better off with its discovery. While Goldwyn and others have expressed concerns about the country’s ability to avoid the resource curse, local authorities have insisted that the work is being done to avoid this pitfall.
Vice President and Chief Policymaker for the oil sector, Bharrat Jagdeo has said government is determined not to become overly dependent on oil revenues, adding that a portion of the wealth is being used to ensure the country has a diversified economy. He said this is being done with key investments channeled to health care, education, infrastructure, agriculture, manufacturing and energy transformation.
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