The Government should provide more details and specifics about where they plan to invest proceeds from the commercialisation of the oil industry. This is the view of the United Kingdom’s High Commissioner to Guyana, Gregory Quinn.
Quinn made this pronouncement during an interactive session with the media at his official residence on Tuesday. The diplomat noted that there are already ongoing discussions on where some of the money would be invested, as well as on administering the Sovereign Wealth Fund (SWF).
Greg Quinn
But while acknowledging the steps being taken, he said that there should be more specifics on the strategies that will be implemented.
“I think there needs to be a good discussion. There are two aspects to this. One is what areas the money should be spent on for the benefit of all Guyanese. So a strategic plan in terms of we want to develop this area and we want to do this infrastructure work (or) we want to help the education sector.”
“But there’s also the part (whereby) you don’t spend all the money now, you put some of it away in a Sovereign Wealth Fund in case there is a rainy day so that in case anything happens you can fall back on the money that is in the Sovereign Wealth Fund.”
Giving an example, the diplomat observed that global economic downturns such as the economic crisis of 2008 have to be factored into the discussion.
“So I think the kind of conversation which I know is happening, is already happening around those two areas. But what I’d like to see a little more detail about is exactly what the strategy is.”
“But we’ve got time. It’s only 2017; we’ve got time to work these things out. But there needs to be a continuing discussion including everybody; civil society, the population, the politicians, the civil servants, about which areas need the money that will come out of the oil and how you prioritise those areas.”
He noted that a second consultative topic of discussion would be the nature of the SWF, the basis for management and how much money will be allocated to it.
“And that is something I know that various people, including the Canadians, have already been providing assistance on. Cause what you can’t do is spend all the money.”
As an example, Quinn used his home country. He noted that the United Kingdom did not save enough of its own money in the 1970’s, so when an economic downturn followed in the next decade there was a deficit.
Quinn also suggested that if the United Kingdom is asked by the Guyana Government to help craft a strategy to spend the oil proceeds, it would be willing to help.
“If we’re asked, I’m sure we will. Already we have given some help. We have UK expertise involved already. We have provided advice in the past. But there’s quite a lot of advice and organisations involved.
“So I think one of the things we have to be careful of is that we’re not all doing the same sort of thing. So for example if the Norwegians or the Canadians or the Commonwealth is already providing advice, then there’s no need for us to do it as well.”
That being said, the High Commissioner expressed optimism at the preparations being made by Guyana. He referenced the Extractive Industries Transparency Institute (EITI) and the consultations being held in Guyana.
“If it was 2019, and we were still in the same place, I think there would be a little bit more concern about the level of preparedness. But I’m confident that if it were 2019 we’d be quite a bit further on down the road.”
Last year, Natural Resources Minister Raphael Trotman and Finance Minister Winston Jordan spent time in Uganda in order to examine that country’s wealth fund model. This is in addition to the work EITI has been doing.
It is anticipated that if managed correctly, the revenue generated by oil and gas will boost Guyana’s standard of living. Esso Exploration and Production Guyana Limited, an ExxonMobil affiliate, is the company responsible for drilling in the Stabroek Block off Guyana’s shores.
Oil has already been discovered in three other wells – the Liza 1, 2 and 3 – in addition to the Payara- 1 well.
