Guyana: Oil and the rites of passage to a brighter future

Dear Editor,
Many equate oil and gas with wealth, and for good reasons. Oil, along with its sister coal, has been the primary source of energy for the rapid industrialisation that occurred in the twentieth century. This dominance, especially from the point of view of oil, is likely to continue way into the 21st century as we can see from the feverish search by industrialised nations for untapped sources of these precious resources, even as the focus on alternative sources of energy becomes more pronounced. Developing countries are as intent on accessing oil and gas as the bigger and more powerful economies are. The strong nexus between oil and economic development cannot be denied. No one has underscored the importance of oil as the writer who a decade or so ago said, “Oil is the linchpin for modern prosperity”.
This assertion essentially means that the discovery of oil in Guyana should enable the transition from an economically impoverished country to one that will see a marked improvement in citizens’ standards of living. In fact, citizens are already talking about transformations that go well beyond simply improving their standards of living. They have begun to envisage a future that is akin to the standards of living of oil-rich nations, fully aware that the fulcrum of those countries’ enormous prosperity has been the abundance of oil and gas. In this regard, no place comes into focus more than Dubai, a city in the United Arab Emirates that is known “for luxury shopping, ultramodern architecture and a lively nightly scene.” In forecasting Guyana’s future, the phrase “next Dubai” seems to be on everyone’s mind.
Surreal as the expression “the next Dubai” is, local citizens, as well as those in the diaspora, seem certain that the Dubai trajectory is where Guyana is heading to. Far-fetched as this expectation seems, citizens do have a right, both from a logical and instinctive point of view, to expect a brighter future based on the massive oil and gas reserves that the country has – if nothing else. Guyana is ranked among the top 20 countries in terms of oil and gas reserves, meaning that it is not implausible to imagine the future of Guyana in those terms. Before the discovery of oil and the dazzling splendour that we see today, Dubai “was mostly inhabited by Bedouins, who were engaged in the cultivation of dates, breeding of camels and goats.” Today, Dubai is a major economic hub in the region. Dubai has become so transformed by the discovery of oil and gas that people from everywhere visit it for business, entertainment, sports and other purposes.
The major natural resources that Dubai has are oil and gas, albeit in huge amounts. Little of other natural resources exist. Yet Dubai is seen as the epitome of economic success and modernity. In a sense, Dubai has become the envy of the world with one of the highest standards of living. In contrast, countries such as Papua New Guinea, also blessed with an abundance of oil and gas, lag miserably in economic development. In fact, about 40 per cent of the population of Papua New Guinea lives in poverty despite billions that the resources of oil and gas resources have raked in for the country since the 1990s. But the greatest paradox in this regard is Venezuela. Once considered the richest country in South America due to its large reserve of oil and gas, Venezuela today is merely a shadow of its former self. Poverty is so pervasive that hundreds of thousands of Venezuelans have been forced to seek refuge in neighbouring countries to obtain food, medicine, work and other essential things.
Why have the outcomes been so starkly different when it is an axiomatic truth that oil and gas have produced billions of dollars for the producing countries? The irrefutable explanation is ubiquitous corruption or mismanagement or a conflation of both on the part of some leaders on the one hand; and on the other hand, the deep belief in the primacy of oil and gas to nation-building on the part of other leaders.
Some leaders see oil and gas as a path to personal richness and as a gateway to self-aggrandisement. These corrupt practices are so egregious that the common people barely get any benefit from the enormous revenues generated by oil and gas. Pocketing most of the proceeds from oil and gas stymies opportunities of many citizens to be able to live a life that is commensurate with the abundance of these resources. On the other side of the spectrum, however, are leaders who consider oil and gas as the focal point of national development. Oil revenues are not siphoned off to benefit only a few. They are instead used for infrastructure, for education, for health, for research and for other developmental needs, all of which will decidedly enhance the well-being of citizens.
Guyana is poised to take off on the backbone of oil and gas, and it can learn a lot from the scenarios discussed above. If oil and gas are to serve as the linchpin for prosperity in Guyana, there must be great oversight over how these resources are managed. Oversight means putting programmes and mechanisms in place to block accountability loopholes, among other things. This will have the effect of precluding the potential misuse and abuse of these resources for selfish purposes. In this way, the transition from oil and gas that Guyanese hope for will become a reality.

Sincerely,
Sheik M Ayube