Home Letters Some Local Content talk sounds like rent-seeking
The continued debate – ably highlighted by your newspaper – surrounding Local Content suggests it is a complex issue that has to balance the legitimate demands of the local private sector to benefit directly from the oil industry with its capacity to deliver the skills and economic resources to help in the optimisation of Government’s oil revenues.
First, I was drawn to comments made by GCCI executive Timothy Tucker who, in Kaieteur News, was quoted as saying, “We have to realise that we do not have the capacity to do everything, but it does not say that I cannot find a partner to take on the toughest one or the most lucrative contract to supply a service in the sector. I can safely say that there is no way I can do underwater diving with remotely operated equipment and deep-water fabrication or anything like that, but maybe I can compile a good proposal and put it to Government, or I can find a partner…”
This sounds a lot like rent-seeking: In other words, Tucker and others in the Private Sector might not be contributing any actual skills or even resources to a joint venture for underwater diving; their only “asset” in any joint venture would be the benefit of their company being owned by Guyanese.
This may explain the push for legislation that would make “being Guyanese” something of great economic value.
I also note remarks made by the Director for the Centre for Local Business Development, Natasha Gaskin-Peters, who said that when the oil companies spend to procure goods from a local company, “if they are importing them, that is not really local content.” Indeed, that’s basic trading, and simply “getting a cut” for being a local company. And that might also mean higher costs to the operator, and therefore less revenue to the Government.
Again, the bigger issue remains: there is a very real danger – in fact, it is happening already – that many other sectors will lose workers and economic resources in the Private Sector’s blinkered rush to profit off of oil. That is the exact opposite of what President Ali envisions for a diversified and resilient economy. That is why the call for a full understanding of the country’s labour force and projections on what the industry will need for the next five to ten years is so essential.