Guyana’s oil don’t spoil but …

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Former Vice-Chancellor of the University of Guyana, Senior Associate with the Center for Strategic and International Studies-CSIS and Fellow with the Caribbean Policy Consortium-CPC in Washington, DC. His next book, Challenged Sovereignty, will be published by the University of Illinois Press.

By Ivelaw Lloyd Griffith

Dr Eric Williams, the late prime minister of oil-rich Trinidad and Tobago, once famously declared: “oil don’t spoil.” That statement is, undoubtedly, true. However, for the new kid on the oil block Guyana, there is copious evidence, from neighboring Venezuela and far away Nigeria, that although oil doesn’t spoil, it can spoil lives and livelihoods of individuals and entire societies. A key question, then, is how might the political and corporate leaders in Guyana avoid trailing the path of societies where oil did spoil things?

The success stories of countries as different as Norway and Kuwait, where oil hasn’t spoiled things (much) suggest that success revolves around several interconnected variables, which can be placed in several baskets—or, perhaps, barrels, given the product we’re dealing with. The technical skills and competencies barrel is one such. There are three others, some of which often get short shrift when new kids on the block rush to reap the rewards of their black gold.

The value of values

The values barrel is one of them. Oil booms generate considerable wealth and foster greed and graft, making corruption a corrosive spoiler of individuals and institutions and sometimes of whole societies. Thus, honesty is a value that must be both preached and practiced. Not just by government leaders, but also by the corporate and civic bosses, and in religious and educational institutions and the media.

Going hand in hand with honesty is transparency, not merely to share with citizens the what, when, and how of government and business dealings, but also to build and sustain trust—in leaders and institutions. Plus, in Guyana’s case, it is needed to serve as a key element in the racial and political healing that’s now needed, coming in the aftermath of the political-electoral roller coaster. Allied with honesty and transparency is respect, for the country’s racial, religious, and political diversity, its laws, and its institutions. Corruption and the disrespect for laws and human life that the country’s high road carnage reflect are two examples of the considerable respect deficit in the society. Respect also is vital for the healing needed given the dynamics of the recent contestation for political power.

Institutions

Key, too, is the institutions Barrel. Regulatory institutions are essential. However, not only should they exist, they must be functional and efficient, all the more so when the industry landscape is dotted with multiple oil companies, some of which have long histories and presence in various parts of the world where their practices have been pregnant with shady dealings. Some of these companies also can bring their multinational technical and legal skills and competencies to upend things in small jurisdictions with weak institutions or political or civil discord.

Keep in mind that while Exxon Mobil dominates the headlines in relation to the Liza field with its oil reserves totaling eight billion barrels, the Liza operations involve a consortium that involves Hess, another United States oil giant, and China’s National Offshore Oil Corporation. Still, those corporate giants are not the only players in Guyana. Anadarko, which is headquartered in Texas and was acquired by Occidental Petroleum in 2019, CGX Energy of Canada, Israel’s Ratio Oil, Spain’s Repsol, and Britain’s Tullow are also there. And other firms are likely to turn their spotlights on the new El Dorado.

Yet, while strengthening regulatory institutions is necessary, it is not sufficient. Crucial, too, are the country’s educational and judicial institutions. As regards the first, the strengthening is needed holistically—at the primary and secondary levels, among the technical and vocational institutes, and at the University of Guyana. In relation to the judicial institutions, attention must not only be paid to deepening and widening the competencies of the current magistrates and judges, but a revamping of the entire judicial architecture and some of the anachronistic modes of operation might become necessary. The Bar Associations also will need to broaden the educational and practice horizons of their members.

In all this, for the regulatory, educational, and judicial institutions, professionalism must be made to trump patronage. The temptation to make appointments or replacements based on political or racial partisanship to ensure loyalty or to reward electoral allegiance must be resisted.

Infrastructure

The final barrel is the Infrastructure one. Both the previous government and the current one must be commended for recognizing the importance of transportation and telecommunications infrastructure and touted plans to build new roads, bridges, airports, and seaports, and refurbish existing ones, among other things. Quite appropriately, the Ali government plans to use some of the oil funds to underwrite the infrastructure investments. Nonetheless, beyond these, they would be wise to begin considering infrastructure investments that are tied to the country’s existence in what I call a Wet Neighborhood.

In comparative Caribbean terms, Guyana is a relatively large nation. It is 20 times the size of Jamaica and it could accommodate all the member countries of CARICOM in its 83,000 square mile territory. Guyana faces some stark realities, though. It has a 285-mile Atlantic coast that is below sea level as much as six feet in some places; the capital, Georgetown, lies along that coast; and some 80 percent of the country’s population lives there. Moreover, its coastline is subsiding due to groundwater extraction, soil compaction, and drainage of the wetlands.

To make things worse, because of climate change, the sea level has risen at a rate some six times the global average. All of this makes the country vulnerable to coastal flooding, which is a perennial problem. The most devasting flood occurred a decade and a half ago. It affected more than 80 percent of the population, killed 34 people, and left an estimated US$500 million in damages. Still, given the vicissitudes of climate change, flood mitigation alone will not suffice. The relocation of the capital is necessary.

Guyana has two major assets that it can leverage for the existential infrastructure investment involved in moving its capital. One is the funds from the oil boom, and the other is a president with a doctorate in urban and regional planning. One hopes the government uses these assets, and sooner rather than later. Surely, oil doesn’t spoil. Still, a massive torrent of water from the Atlantic Ocean definitely will spoil things in unimaginable ways and shatter the hopes and dreams of local Guyanese and the executives and investors of the oil giants.

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