Govt rebuffs claims by Jamaican economist that Guyana is “going nowhere”
– points to legislative & policy advances; non-oil economic growth
The People’s Progressive Party/Civic (PPP/C) Government has rebuffed utterances made by Jamaican Economist and University of the West Indies (UWI) lecturer Dr. Damien King, who claimed in sections of the media that Guyana is already on the path of the Dutch disease, due to inadequate institutions.
In a statement on Tuesday, the Ministry of Natural Resources pointed to the various legislative and policy advances, both completed and planned. Among the advances the Government has made since coming to office in 2020 is passing the Local Content Act and setting up the Local Content Secretariat. Other advances are new environmental permit conditions and fees.
According to the Ministry of Natural Resources, Government has also been able to update the principles and conditions of all new petroleum production licences with the completion of draft model Production Sharing Agreements (PSA) for the deep and shallow blocks. Cost recovery audits have also been completed, while continuous review and modernisation of the oil and gas legislative framework are planned…including for the 1986 Petroleum and Exploration Act.
“Guyana is labelled by leading market participants as the most successful frontier to early-stage production country in recent Oil and Gas history. Our nation’s exemplary environmental credentials and dynamic policymaking to facilitate expeditious offshore exploration and development activities underscore Guyana’s role-model status for Oil and Gas development strategy in the Energy Transition environment.
“The Government of Guyana, since taking office in August 2020, has been working to transform the governance framework and management of the petroleum sector by effectively developing and implementing various policies and programmes which allow for adherence to international best practices and principles. The PPP/C Government of Guyana has crafted a strong global energy reputation from the implementation of its manifesto commitments,” the Government said.
Also referenced by the Government was the development of Offshore Safety Regulations, the development of Hydrocarbon Environmental Management Regulations, and improving inter-agency collaboration to better monitor the oil sector. Among the agencies that have undergone capacity building are the Guyana Geology and Mines Commission (GGMC), the Guyana National Bureau of Standards (GNBS), and the Guyana Revenue Authority (GRA).
The Government went on to remind of the steps it took to remedy the deficiencies of the Natural Resource Fund Act 2019 that the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had passed. This Act was replaced with the Natural Resource Fund Act 2021.
According to Government, this was an important step towards safeguarding against the resource curse, ensuring fiscal smoothing, and advancing the quest for intergenerational wealth while utilising petroleum wealth to finance national development priorities.
“The PPP/C Administration scaled back the excessive power of the Minister of Finance — removing the possibility of ministerial direction in determining the ceiling on withdrawals, established a Board of Directors — vesting the Board with powers previously concentrated in the hands of the Minister, and removed the possibility of any expenditure from the Fund being met without prior parliamentary approval.
“To maximise value extraction from Guyana’s petroleum resources and remedy pressing issues, Local Content Legislation was enacted in 2021. Today we see the growth of the Guyanese 2 | P a g e-economy driven by a vibrant local Private Sector.”
According to Government, work has already commenced on overhauling the 1986 Petroleum (Exploration and Production) Act, and replacing same with regulations that are modern and create an effective legal framework.
“The Government of Guyana remains committed to its strategic development path, reinforced by the establishment of a pragmatic legal and fiscal Petroleum Management Framework, and is confident that the country’s practical, academic and industrial intelligence will ensure that policies and programmes are implemented to avoid the resource curse syndrome to our multi-sectoral economy,” the Government further said.