Former Prime Minister and Leader of the Opposition in Trinidad and Tobago, Kamla Persaud-Bissessar has said that Guyana should steer clear of being solely dependent on its booming oil reserves in the future so as to avoid the negative situation her own country finds itself in.
At the Guyana Manufacturing and Services Association (GMSA) 23rd annual award ceremony at the Pegasus Hotel in Georgetown, the former PM, while reflecting on her country’s oil industry, noted that Trinidad would have made the decision of relying on its reserves to fuel the economy and Guyana should not follow in these footsteps.
“It is an imperative. You do not become locked on to just the oil and gas sector. Use it and monetise it and save some of that and spend the rest on the development of human capital. To do this, you need to have robust legislation to project your country’s patrimony, but at the same time, it must not be filled up with endless red tape that will drive away potential investors.”
She stated that having a flourishing oil industry was only possible if countries reinvested in exploration as oil was a finite resource. This is in keeping with the decades of experience which would have been part of the country’s extensive history in oil and gas.
As such, she urged Guyana to take control of its production and seek to expand in the sector. In her address, she also outlined the concept of having a State-owned establishment and its pros and cons.
According to the Opposition Leader, State ownership would mean total control but it can limit profits disastrously. Additionally, while the Government may be in control, innovation and capacity requirements can be restricted due to constraints.
Persaud-Bissessar pointed out, “The fact that it is State-owned; you would have Government control [and] Government regulation. This sounds all well and good. However, that can also be very negative and impact adversely on the profitability.”
“The State enterprise owning it is like the taxpayers [and] citizens own it through the Government, but then it is very difficult for innovation, productive capacity in the State enterprises,” she added.
The current administration of Trinidad and Tobago is indicating a possible closure of the country’s petroleum company. She sought to point out that this is a faulty move since they will be forced to import what they once produced.
“That decision has raised many questions which remain unanswered regarding the supply of imported fuels, exported crude and the mystery of what is happening to the Petrotrin refinery…When we become dependent now on imported energy, while you (Guyana) will be shooting rockets up into the sky, Trinidad and Tobago will be shooting down into the grave.”
In her words, the once “force to be reckoned with” is now facing its defeat which could have been avoided had effective systems been put in place.
Guyana has made sizable discoveries of oil offshore and extraction is set to commence in just a few months.
The former Prime Minister pressed that preparations should be made in the present time so that there can be a practicable blueprint for where the country wants to position itself on the global markets and as well as on a developmental trajectory.
Her recommendations are that a national policy be crafted along with efforts to achieve energy security and independence. She noted that sustainable plans must be made for the future generations.
“I would recommend that you develop a national policy for the development of Guyana. All stakeholders should sit now if you have not done that and get contributions from labour, civil society, the business community and develop a national policy. What do you see seven generations down?” the former Prime Minister posited.
While it is too late to turn back the clock for her country, Persaud-Bissessar once again advised that Guyana and its Government should be on the alert and seek to expand exports, build human capital and set up local manufacturing to propel the country’s economy. (Rupa Sewnarine)