– De Armas slams Opposition for ‘short-sighted’ approach to nation building
– Councillor commends gov’t for investing in expanding Guyana’s future economic base
THE Georgetown Councillor for the People’s Progressive Party/Civic (PPP/C), Alfonso De Armas, argues that the present government is not pursuing short-sighted economic policies, but rather ones that aim to expand the nation’s future economic base.
During an episode of “Viewpoint,” De Armas provided an extensive explanation regarding the significance of strategic planning and the necessity to dismiss the rhetoric propagated by critics of progress who endorse unregulated expenditures.
The PPP/C Councillor said: “Back in 1969, Norway discovered its first oil field and started production two years later, in 1971. However, it took them 19 years to set up their famous sovereign wealth fund. During that time, the Norwegian government faced immense political pressure to use its oil revenues on recurring expenditure.”
Due to the lack of oversight on spending, De Armas stated that Norway faced rapid inflation, currency devaluation, and stagnant productivity.
Nevertheless, he stated that Guyana’s management of its oil revenues is governed by stringent regulations outlined in the NRF Act, drawing lessons from Norway’s early experience.
“Withdrawals from the NRF are only allowed to finance national development priorities and essential projects, helping to prevent misuse and ensuring funds are directed towards sustainable development,” De Armas noted.
It is worth noting that the NRF Act 2021 was approved by the National Assembly on December 29, 2021. This legislation is regarded as a crucial measure towards enhancing accountability and transparency in the administration of Guyana’s oil resources. Furthermore, it replaces the illegitimate NRF Act 2019 implemented during the APNU+AFC administration.
Furthermore, the PPP/C Councillor emphasised the intricacy of petroleum revenues, which arise from a finite resource and exhibit high volatility as a result of fluctuating prices and production volumes.
While discussing the consequences of unrestricted spending, he emphasised that Venezuela, a neighboring country of Guyana, is currently experiencing “economic collapse, hyperinflation, and widespread poverty” due to unregulated social welfare expenditures.
Despite this being a “nightmare,” the PPP/C councillor said that spending the nation’s oil revenues on immediate social benefits is what the Opposition, notably the People’s National Congress Reform (PNCR) has been advocating for.
“This short sighted approach mirrors the disastrous policies seen in Norway during the 1970s and 1990s, in Trinidad and in Venezuela. We simply cannot afford to repeat their mistakes,” De Armas said.
However, the current government has chosen a sustainable path with its investments in critical infrastructure, which is aimed at expanding Guyana’s future economic base.
He cited the gas-to-energy project as an exemplification of this. By substantially decreasing electricity costs, transforming the manufacturing sector, and generating well-paid employment opportunities, this initiative eliminates the reliance on volatile oil prices.
“This balanced approach is essential. Sure, funding welfare programmes with petroleum revenues can provide immediate social and political benefits, but the long-term management of these funds is crucial,” he said.
The project, which involves laying a 200km, 12-inch diameter pipeline, will channel natural gas from the Liza Phase One and Phase Two FPSO vessels to a state-of-the-art power plant and Natural Gas Liquids (NGL) facility in Wales.
Esso Exploration and Production Guyana Limited (EEPGL), along with its co-venturers in the Stabroek Block, are behind the pipeline’s construction, which has an estimated cost of US$1 billion and is cost recoverable.
The Government of Guyana has earmarked $80 billion in the 2024 budget for the project, highlighting its significance to national development.
The conversion of natural gas from ExxonMobil’s offshore operations to electricity is a key component of the PPP/C government’s objective to lower energy costs by at least 50 per cent through an energy mix which incorporates gas, solar, wind, and “hydro” power.
Additionally, De Armas said Guyana is in the right direction to avoid the pitfalls that have trapped others, by making tough yet wise decisions. The PPP/C Councillor stated: “The government is paving the way for a stable and prosperous future.”
