July 23, 2024

Guyana’s dilemma of a newfound oil market

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Government officials have promised that the discovery of massive oil reserves off the coast of Guyana in 2015 will change the course of one of South America’s poorest nations.

According to the World Bank, the economy is expected to grow at the fastest rate on earth this year alone or 48%.

The nation will be added to a lengthy list of petrostates whose people have stayed impoverished despite having abundant resource riches, development experts and diplomats warn. However, if these monies are properly handled, they will fuel Guyana’s racial politics, which are already quite intense.

The topic that has to be addressed right now is how to prevent Guyana’s new oil wealth from being wasted, stolen, or lost to corruption.

No one is sure of the answer just yet, but if Guyana’s past is any indication, it may not be encouraging.

The Guyana government revealed in May that it had made its first withdrawal from the sovereign wealth fund, which is where the royalties collected from oil producers are kept. Drawdowns will surpass $600 million by year’s end and will eventually reach billions of dollars.

“Prepare for a massive influx of government revenue with little expertise on how to handle it,” wrote analysts at the U.S. Agency for International Development in a report.

However, the Guyana government says that is not the case, adding that the citizens are at the forefront of every decision made by the government.

“Our commitment as a government is to ensure that opportunities are real across the country, irrespective of where one lives, irrespective of who someone might have voted for,” Guyana’s Finance Minister Ashni Singh countered in an interview with journalists.

But actions are louder than words and that is what Guyanese citizens are hoping to see. The country is undoubtedly on the pathway to transformation. Now, it’s time for a visionary master plan, much like the power plan created by Singapore and China, which pays significant attention to detail and moves more towards a private/public sector partnership model of growth than a government-driven plan.

When, though, would citizens start to notice a difference? Equity in prospects must be seen, development experts warn, for everyone as a result of the new market our nation has to offer.

 

All Guyana Editorial – [email protected]

 

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