IN February, Guyana lifted her first million barrels of profit oil, as part of our five million barrels of oil entitlement for 2020, according to Director of the Department of Energy, Dr. Mark Bynoe.

“I am happy to say that Guyana is entitled to approximately five million barrels of oil in 2020 alone, plus the two per cent royalty, plus withholding taxes, plus the direct and indirect benefits through employment creation and other revenue-generated income,” Dr. Bynoe said at the time.

Shell Western Supply and Trading Ltd was nominated as the buyer for the government’s first three cargoes, and it was confirmed by Minister of Finance Winston Jordan, who said that the US$55M for the first million barrels of crude had been deposited into the Natural Resources Fund (NRF), as mandated by law. The minister confirmed that the funds would not be available to the current government, but would be available to the successive government. According to projections, the oil revenues from this venture will generate approximately US$300M in this first year alone, a figure that is set to triple over the next five years.

Astute political commentators and well-versed citizens would be aware of the connection between the current electoral impasse and the proverbial battle for control of this most valuable natural resource. Nonetheless, on the occasion of the first monies being deposited into the NRF, and in the midst of the current electoral standoff, it would be wise to revisit the conversation surrounding the management of natural resources, such as oil, in less economically developed nations like Guyana.

The infamous ‘oil curse’ is a complex structural phenomenon influenced by political and economic circumstances, and characterised by poor management or investment of oil revenues by oil- producing nations. In most cases, the ‘oil curse’ affects less economically-developed nations with traditionally weak systems of governance. However, it could be argued that the curse affects all oil-producing nations to varying degrees.

The manifestations of the ‘oil curse’ are complex and multi-fold, however, key indicators are acute governmental corruption, and the outright misappropriation of oil revenues by officials; the creation of conditions which fuel conflict and civil war; the decline of other primary export sectors such as agriculture and manufacturing, and widespread poverty.
The case of Nigeria is a cautionary tale, and one which should stand as an example to Guyana and those who proclaim to have her best interests at heart. In 1956, major oil reserves were discovered in Nigeria, and should have guaranteed Nigeria’s long-term economic growth and prosperity. However, owing to political struggles for power and allegations of corruption, the first of many violent and bloody coups ensued in 1963. In 1977, the Nigerian National Petroleum Company was established, but instead of creating economic independence, the company ushered in a further period of economic contraction, more corruption, and increasing levels on instability and insecurity. In recent years, Nigeria’s economy and oil sector have become less volatile. However, even though the country has made over US$1 trillion in the years since it began extracting oil, the majority of Nigerians continue to live below the poverty line, according to the World Bank.
Guyana is no stranger to contested elections; however, at this juncture in the nation’s socio-economic development, we cannot afford to ignore the importance of ensuring that the Constitution of Guyana is respected, and that local election laws are adhered to. Therefore, the finalisation of the results of the March 2, 2020 Regional and General Elections is even more important, if we consider the manner in which future governments must lead Guyana forward, particularly when we consider the effects of ‘the oil curse’. We must have clean hands responsible for the management of this resource; anything less would almost guarantee Guyana’s descent to ‘a Failed State’.

Guyanese must be unified in our call for a credible and transparent conclusion to the recent elections, so that we might be able to continue the process of nation building and safeguarding our nation’s wealth for future generations. The wealth deriving from oil revenues is expected to directly benefit every single Guyanese, through investment into important and longstanding sectors such as agriculture and manufacturing. It is also expected to drive development in key emerging sectors such as the energy and the tourism sectors. With the correct leadership, Guyanese will be guaranteed a higher standard of living, which will be realised through increased wages, job opportunities and improved social and educational services. We cannot falter in selecting our leadership; the cost would be too much for Guyana to bear.