MY attention was drawn to an article published in the Jamaica Observer on March 17, 2023, citing a regional economist, Damien King.

The economist argued that Guyana could fall victim to the so-called ‘resource curse’ as it moves deeper in developing its oil-and-gas finds because it lacks strong institutions to prevent corruption (see link here for ease of reference: https://www.jamaicaobserver.com/business/mark-my-words-2/).

The economist went on to make some other outlandish and callous remarks wherein he argued that “Guyana is going to go nowhere,” political parties will soon start to squabble over the spoils to the detriment of the country and that unless there are strong institutions, corruption and violence will ensue, et al.

Generally, there are two fundamental issues I have with the economist’s contentions. First and foremost, his assertion that “it is worth killing people for power,” though this is indeed a risk and a reality that occurred historically with other countries where oil is concerned, should be outrightly rejected. Guyana’s political economy is still fragile wherein even without oil, the country endured a long history of political crimes.

Notwithstanding the aforementioned, today, Guyana is in a much better position compared to where it came from three decades ago, and is in a different era when the political crimes of the past would be difficult to perpetuate.

Of recent, for example, there were persistent (failed attempts) by the political opposition to stimulate the environment for a repeat of the past political crimes.

This is another demonstration of the fact that the political crimes of the past would be difficult to engineer in a modern civilisation, natural-resource rich, an increasingly smarter population, and economically stable Guyana.

The second fundamental issue I have with the viewpoints from outsiders, in particular, is the tendency to be overly academic and theoretical, referencing case studies of other countries and packaging the narrative as lessons?thus effectively ignoring appropriate context and/or lacking a proper contextual analysis.

While this may be partially acceptable in academia, the reality of the political and economic situations of countries are oftentimes vastly different, and, therefore, the appropriate contextual analysis is of great importance. In this regard, this critical element is lacking in the economist’s analysis on the Guyana situation.

The economist contended that Guyana has weaker institutions compared to Jamaica?yet, Jamaica scored only three points higher than Guyana in the 2022 corruption perception index (CPI).

Moreover, it is a pathetic and unsubstantiated argument coming from a political economist that weak institutions necessitate corruption, and ultimately the resource-curse syndrome as the only variable or primary causation for such an outcome.

Conversely, the reality is such that the perception of corruption and the reality and evidence of corruption are different issues altogether?and it is also true that there is no country in the world that is free of corruption?even in countries with the strongest institutions, rampant corruption prevails, and there are countries that did not fall victim to the “resource curse.”

Additionally, he based his argument and conclusions solely on the case studies of other countries that suffered the consequences he is predicting that Guyana will be a victim of, but ignored completely, the contexts altogether of the countries cited, such as Venezuela and Nigeria as mentioned earlier.

It is noteworthy that avoiding the dreaded resource curse has less to do with the perception of corruption and more to do with prudent economic management of the resources in a manner that effectively and efficiently elevates the level of prosperity for the country and its people.

With the foregoing in mind, I strongly oppose the views of the economist on Guyana in respect of the “resource curse” syndrome?albeit it is true that historically, Guyana endured politically motivated crimes and violence as previously mentioned.

It is worth noting that historically, despite these challenges, the government at the time which is none other than the current government, managed to successfully lift Guyana out of a state of bankruptcy to economic stability in just over two decades. This is indicative of the resilient nature of the country, the people, the private sector, and the incumbent party.

The government has demonstrated, drawing from its successful track record of good economic management, that it is pursuing the right type of economic policies and undertaking the much-needed investment in the economy?specifically in addressing the country’s infrastructural deficit, human resource constraints, education and health care, energy and food security at the regional level, and ICT, just to name a few, that will enable the economic transformation to take place from a primary-producing economy to a tertiary-producing economy.

Finally, I end by inviting King to study the Guyanese economic context, conduct his own public policy analysis; examine the national budgets of 2020 through 2023 for example, and analyse the economic outcome of these policies and allocation of financial resources in the economy, which will then aid him in deriving a more informed conclusion. Following this, we can then move the debate to another level, if he so wishes.

Yours respectfully,
Joel Bhagwandin
Financial Analyst