It is intriguing how countries with oil or other natural resource wealth have failed to grow more rapidly than others without. This is the essence of a widely known academic paradox referred to as “the natural resource curse”. Though there is a very rich volume of academic literature on this theory, the author of this column is of a strongly held view that what is referred to as the natural resource curse in academia is, from a pragmatic perspective, all nonsense, to put it mildly.
What is the basis for such a strongly held premise by this columnist? To put this differently, it means that oil, gold, bauxite, and all the rich natural resources that Guyana is blessed with is a curse. But, radically speaking, how could any of these be a curse? The outright truth is that there is no such thing as a natural resource curse, despite the empirical evidence that validates such a notion. The real and true curse is the political economy; that is to say, the politicians who control and administer policies, and manage the resources of a country, and not the resources of a country that are cursed.
This is a fundamental reality that one ought to understand.
In fact, the position put forward herein on the resource curse is also supported by some academics. Authors like Wright and Czelusta (2004), in their paper titled ‘the myth of the resource curse’, contend that the resource curse hypothesis seems anomalous, since on the surface it has no clear policy implication, but stands as a wistful prophecy. The authors argued that countries afflicted with the “original sin” of resource endowments have poor growth prospects. The danger of such supposedly neutral ruminations is, however, that in practice they may influence sectoral policies. Minerals themselves are not to blame for problems of rent-seeking and corruption. Rather, it is largely the manner in which policymakers and businesses view minerals that determines the outcome.
Further, Wright and Czelusta (2004) put it nicely in concluding that “minerals are not (curses) at all in the sense of inevitability; the curse, where it exists, is self-fulfilling.”
To contextualise these arguments, last Friday, June 12, 2019, the Caribbean Court of Justice, Guyana’s final court of appeal, made its final pronouncements on the no-confidence case. The CCJ has ruled in unambiguous terms that, while it cannot order the President what to do, the involved parties have a responsibility to respect the Constitution of Guyana. The CCJ simply interpreted the Constitution and made it clear that elections have to be held in three months.
Common sense dictates that though the CCJ cannot order the President to set a date; obviously, if the President has a responsibility to respect the Constitution and abide by its dictates, this effectively means that the date would have to be in three months from when the court ruled. The Court even went on to state that the Guyana Elections Commission (GECOM) also has a responsibility to abide by the provisions in the Constitution, and that is: to hold elections in three months’ time; since the Opposition Leader made it clear that his party would not be extending the life of the Government in the National Assembly. That time has long gone.
It would appear, however, that the Government, now being officially pronounced by the CCJ as a caretaker Government, has selectively and conveniently cited parts of the CCJ judgment which emphasise that the Court cannot order the President to set a date. These are skilful legal tactics of misrepresentation of the facts – the nature of law in any case.
The danger of this kind of behaviour for the economy is far-reaching. These are indicators that many are of the perception that elections will not be held within the three months, as stipulated – implying disregard for the CCJ’s ruling.
Without getting into all the details, and in short, the political reality that is now before us is that this is precisely how a country suffers from not the resource curse, as contended in this article, but by the curse of the political economy.
It can be deduced with almost absolute certainty and clarity that the ruling politicians of the day will not give up power easily; the fight is on for control of the country’s resource, particularly the impending oil wealth.
In the meanwhile, Venezuela — whether coincidentally or strategically — has again broken its silence, at a time when Guyana is in a fragile state, to demand that Guyana withdraw the border dispute case from the International Court of Justice, and has reiterated that it does not, and will not, recognise any of that court’s ruling.
Will there be a regional war over the oil resource while Guyana is seemingly plunging into a state of fragility internally? Will the international community intervene to put Guyana back on the path of stability? That might be the country’s only hope, and it has to be timely, before a war instigated by Venezuela starts in the region. The moment Guyana becomes weaker and weaker, the enemy might attack!