By Jainarine Deonauth
The transformation of a small country such as Guyana due to its massive oil discoveries will be “historic”, with some experts referring to it as potentially the “new Qatar” of South America.
According to the Washington-based Center for Strategic and International Studies (CSIS) in a recent report, Guyana is projected to be among the world’s largest per-capita oil producers by 2025 and has the potential of becoming one of the wealthiest countries per capita in the hemisphere within the next generation.
The report; ‘The Guyanese Diaspora’ which was authored by Michael Matera, Linnea Sandin and Maripaz Alvarez, highlights that Guyana’s GDP is expected to increase significantly in 2020 as a result of its first exports of oil.
It notes that Guyana is expected to have an average annual growth of 28 percent between 2020 and 2024, doubling its GDP to US$8.1 billion and per capita income to over US$10,000 over the same period.
“With this projected growth in national income, the country will have the opportunity to develop modern health and education systems, construct other major public infrastructure projects, and potentially develop new sectors of energy and non-energy related industries.
“There is even the possibility of reviving the country’s agricultural sector and developing agro-industrial production and export of both basic food commodities and value-added food products,” the report states.
However, the authors were quick to point out that Guyana is likely to face the same kind of difficult challenges that other countries have faced and must therefore implement the kind of policy measures needed to ensure that citizens prosper from the oil windfall.
Part of the challenge, according to the authors, will be to avoid the “resource curse,” a malady which has left many countries rich in oil and gas resources such as Venezuela, Nigeria and others with “authoritarianism, corruption, and poverty”.
For the authors, the predominant challenge is to wisely manage this new wealth by “carefully planning a sensible development strategy and ensuring that this new wealth is not misappropriated by a few but shared equitably with the entire population and with future generations of Guyanese”.
They note that the experience of many resource-rich countries indicates that huge reserves of energy resources are not in themselves a guarantee that national prosperity will be achieved.
“It would be naïve to assume that Guyana will be immune to the resource curse, and in fact some of the historic characteristics of the political experience in Guyana since independence indicate that the country could be easily susceptible to this condition.
“Divisive politics, weak political institutions, persistent corruption and high levels of tension and latent conflict in the population mostly over ethnic divisions are a very quick indication of how Guyana could easily move in this direction. The problems surrounding the March 2, 2020 national election are a reminder of this reality”.
The authors therefore suggest that the authorities include concrete public policy measures in many areas of development and governance, with specific attention being paid to avoiding the resource curse.
According to CSIS report, some connection needs to be drawn between the diaspora communities and the country with regard to this challenge. What is clear, they highlight, is that significant human, social, and economic resources are present not only in Guyana but also in the formidable Guyanese diaspora.
They observed that, although the local population in Guyana can provide a workforce and certain skills on the ground, the diaspora offers many of the specialized skills and expertise that could contribute to the successful management of the new oil and gas sector and consequent downstream industrial development.
The PPP/C Government is taking steps to put in place stiff measures, including robust legislation, that will seek to ensure that monies garnered from Guyana’s oil and gas sector will be channeled towards its intended purposes – development of the country and improving the quality of life for every citizen.
Vice President Dr. Bharrat Jagdeo, had said that the government is working assiduously to minimise the contacts between politicians and oil companies, and will ensure that technical agencies are involved in the process.
Jagdeo had explained that while intercessions will be performed from a policy perspective by a Minister or the Cabinet, all negotiations will be facilitated at the technical level.
The Vice President had further posited that the government will implement legislation which will criminalise persons involved in the non-disclosure of revenues or receipts from oil companies.
“We made it clear that the Minister of Finance or the Secretary to the Treasury would have to gazette every cent collected from the oil companies, big or small… so that the country can read the official gazette and know how much we collected and in which month,” the VP had said.
Dr. Jagdeo had also expressed that once the monies are paid into the Sovereign Wealth Fund or the Treasury it has to go through the budgetary and audit processes.