Beyond the oil boom

Oct 28, 2024 Peeping Tom

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Peeping tom…

Kaieteur News – In his recent address to a Private Sector Commission event, Minister of Natural Resources Vickram Bharrat painted an optimistic picture of Guyana’s economic landscape, encouraging the private sector to embrace what he referred to as “the most exciting period” in the nation’s history.

His remarks were the sort one might expect at such an event, peppered with effusive commendations for the private sector and applause for government initiatives. Yet, beneath the surface of his call to action lies a question: How substantive is this “opportunity” narrative, and is the economic environment genuinely as ripe as claimed?

The minister’s central refrain was a familiar one: seize the day, for “another 10 years from now might be too late.” The call has a sense of urgency, but as it often happens, the applause masks a lack of nuance and specificity. Bharrat seems to envision an economic transformation spurred by private sector investments in areas from agriculture to tourism. Yet, there is little examination of the structural challenges the private sector faces in venturing into these sectors—challenges that are no less real simply because they are unspoken.

Since the discovery of oil, Guyana has indeed witnessed rapid growth, but this growth, spurred by an oil economy, is a double-edged sword. For one, dependence on oil, despite attempts to broaden the focus, is a path already well-trodden by other nations whose once-soaring oil economies left them vulnerable when oil prices fell or production levels plateaued. For a country on the verge of this trajectory, Minister Bharrat’s appeal to private sector investors reads like a plea to diversify without addressing the inherent instability of building a modern economy around a volatile resource.

Moreover, while Bharrat suggests that sectors like agriculture and tourism hold promise, one might ask what steps have been taken to nurture these industries in meaningful ways. We have to question whether Guyana can produce the food for the hotels that it is building.

It is one thing to encourage private investment; it is quite another to ensure the infrastructure, regulatory frameworks, and market conditions required for their success. A nation transitioning from oil wealth to diversified industry requires deliberate planning, policies that actively nurture nascent sectors, and protections against the so-called “resource curse,” where other industries are hollowed out as resources concentrate in the extraction economy. Here, the minister’s rhetoric is lofty, but the specifics are conspicuously missing.

Minister Bharrat further praised the government’s role in creating a “conducive and favourable environment” for investors, pointing to Guyana’s resource-rich landscape as a natural lure. But favourable conditions for investment extend beyond raw resources; they involve policy stability, transparency, and institutional integrity. Guyana’s private sector, long accustomed to weathering economic unpredictability, is acutely aware of these needs. Yet, Bharrat’s address lacked any real discussion of institutional safeguards, such as anti-corruption measures, that would ensure investments have a secure, long-term future.

One wonders if the minister’s optimism is tethered to the often-transient nature of investment interests in resource-rich countries. For now, Guyana is the proverbial goldmine, with investors pouring in for lucrative oil-related contracts and various spin-off ventures. But for how long? The minister’s speech does little to dispel the shadow of impermanence that looms over such booms. It is easy to celebrate today’s investor confidence; much harder is the work of establishing a diversified economy that remains robust when the wells start to dwindle or prices drop.

Bharrat’s claims of Guyana’s “favorable environment” are not only vague but overlook the unique pressures faced by a rapidly growing economy still grappling with basic infrastructure gaps, regulatory issues, and a pressing need for workforce development. Without a balanced approach to investment and growth, economic excitement can quickly become disillusionment. For Guyana, the goal should be to build an economy that does not merely “support” oil and gas but can also withstand its eventual decline—a point that was strikingly absent in Bharrat’s remarks.

While Bharrat heralds the government’s response to COVID and its efforts in the post-pandemic economy, he does not address how the focus on oil and investor enthusiasm has translated into tangible improvements in quality of life for the average Guyanese citizen. Growth, after all, is measured not only by GDP but by real benefits for the population: education, healthcare, public services, and infrastructure. If these factors are neglected, Guyana’s economic miracle may soon reveal itself as a mirage.

In essence, Bharrat’s rallying cry for investment is welcome but should be grounded in a more nuanced recognition of the complexities at hand. A lasting and genuinely modern economy requires the uncomfortable work of critical analysis, investment in sustainable infrastructure, and a commitment to a vision that outlives the oil rush. A truly historic period for Guyana will be marked not by frenzied calls to “invest now” but by a long-term approach that ensures the nation’s prosperity endures well beyond the current oil boom.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.) 

 

 

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• Examination, Guyana’s, Minister of Natural Resources, Moreover, Vickram Bharrat

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