IN many new Third World oil-producing countries, the discovery of oil reserves has turned out to be a mixed blessing. In some African states for example, it has led to massive corruption with politicians stealing a great proportion of the oil revenues. In other countries, oil was allowed to displace all other industries, but since oil reserves are a finite resource and since oil is subject to the vagaries of the market when reserves become exhausted or prices fall, economic ruination and great social suffering occur. In other cases, governments and populations become so overwhelmed with the “bonanza syndrome” that they spend revenues recklessly on unproductive consumption until the day of reckoning arrives when oil reserves become exhausted or market prices fall and they return to their pre-oil economic condition. Trinidad has been touched by this kind of experience.
Guyana has not escaped unscathed from the “oil curse” and the country’s losses amounting to tens of billions of dollars occurred in the initial stages of the negotiations with the oil companies and the alleged corruption of a few politicians. Now, matters regarding the oil industry are settling down to equilibrium. This is due to the maturity of the Guyanese people who were never overtaken by the “bonanza syndrome,” except for the first few months after the oil discovery when there were proposals that every citizen should be given $5 million. In a few months, however, this proposal faded away.
More rational counsel prevailed and there was the establishment of the Natural Resources Fund (NRF) which will eventually be structured along Norweigan lines, whereby oil funds would be used for national economic and social development and also as insurance for succeeding generations. Measures are taken to have as minimal political control as possible of such funds and there would be full transparency in the receipt and expenditure of funds. The population realises that oil is a finite and temporary resource and that its primary use would be to provide capital investment for economic and social projects such as Agriculture, Industry, Infrastructure, Health and Education among others. Employment would increase and wages would be higher and the standard of living of the population would be continuously bettered. The population abhors corruption and are aware of the danger of Dutch Disease.
Recently in his address at the Guyana Basin Summit 2021, President Irfaan Ali reiterated that Guyana’s oil revenues would be spent on social and economic development He pointed out that since the oil-and-gas discoveries, Guyana’s attraction as an investment destination had grown, and invited investors to consider the plethora of other investment opportunities in the country.
Said President Ali: “I want to say to all potential investors, ‘you need to come, you need to explore and you need to look holistically at the varied opportunities in Guyana, whether it is in large-scale agricultural production, whether it is in mining; whether it is in forestry; whether it is the healthcare system; whether in the education system; you need to understand varied potential Guyana offers for different types of investors; it is not only about oil and gas. . .
“It is necessary for the local private sector to become more involved in the planned economic transformation and to grow and develop through synergies and partnerships with foreign businesses. To enable this, the draft Local Content Policy and Law is aimed at spurring a stronger and more robust local business environment . . . The oil-and-gas sector will complement the traditional sectors, which will be modernised and which will maintain their roles as economic mainstays.”
President Ali emphasised that his government would not ignore the interests of the workers as against private investors: “We are uncompromising when it comes to respecting our people, especially our workers. We insist the rights of our workers be respected and that investors comply with our labour laws.”
There is one important area on which the government has made no public pronouncement so far, that is, modernising of the country’s citizenship and immigration laws. With greater economic development there would be an influx of foreigners who could overwhelm the Guyanese identity; there are indications of such an influx with the number of persons applying for naturalisation and the numbers of foreigners settling in the border areas with Brazil and Venezuela. In modernising the citizenship and immigration laws, the experience of the USA and its laws in this regard could be instructive. For example, any person who wishes to live here should be conversant with the English Language and know the country’s history, especially in such areas as culture and the Guyana-Venezuela border controversy. There could also be a quota system as in the earlier American Legislation. Such an updating of the citizenship and immigration laws needs to be urgently undertaken.