22 C
Georgetown
Thursday, November 26, 2020

Guyana must guard against over-dependence on oil and gas revenues – Mexican academic

Must Read

Energy, infrastructure take centre stage in high-level Guyana, Brazil meeting

Guyana’s President, Dr Irfaan Ali on Thursday announced an amplification in bilateral relations between Guyana and Brazil after a...

Tullow says Suriname well campaign on schedule for Q1 2021

Preparations are on schedule for the first well targeted for 2021 by Tullow Oil in the highly prospective Suriname...

Guyana is now the destination of choice for oil and gas companies, investment chief says

Investors and governments from around the world have been discussing various opportunities with Guyanese authorities in recent months that...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

Guyana must be mindful of over-dependence on its newly discovered and soon to be extracted oil and gas resources if it is to guard against the dreaded resource curse, said a Mexican academic.

Speaking at last Wednesday’s Turkeyen and Tain Talks, Mr Daniel Sandoval, of the Center for Economic and Administrative Sciences, University of Guadalajara in Mexico, said that like Mexico, Guyana must place attention on its other economic areas.

Daniel Sandoval

“Oil is an important part of the economy…not the entire economy,” he said, noting that agriculture has become another important area for Mexico. “So while the oil industry is important, focus has to be placed on other industries,” Mr. Sandoval added.

The African country of Nigeria, a member of the Oil Producing and Exporting Countries (OPEC), stands as one of the starkest examples. Nigeria discovered oil in 1956 and before this; the country’s income was generated mainly from agriculture, with the production of cocoa and palm oil.

In the years to follow, Nigeria became known for rampant corruption, political violence and ethnic rivalry. These negative occurrences are believed to be linked to oil revenue as there is generally high pay for political office holders made possible by oil money. Nigeria has also suffered from a dysfunctional power sector, rising unemployment and a failing school system. Agriculture has been neglected as a result of the over-dependence on oil which leaves the country open to price volatility shocks.

It is reported that in the first quarter of 2013, the proceeds from Nigeria’s oil and gas industry comprised 38.77 percent of its nominal GDP and generated 76.26 percent of the country’s overall Government revenues. These figures show why it is easy for an economy such as this one to fall victim to price shocks.

Guyana seeks to guard against this by ensuring that its main historic productive sectors remain viable by encouraging more efficient use of energy and better application of technology.

It is believed that even though Guyana is seeking to create jobs in the services sector and further along the value chain, the country will remain predominantly a producer of primary commodities. In this regard, a policy to sustainably manage all of the productive sectors in the country, including the new oil and gas industry, will be welcomed.

- Advertisement -

Latest News

Energy, infrastructure take centre stage in high-level Guyana, Brazil meeting

Guyana’s President, Dr Irfaan Ali on Thursday announced an amplification in bilateral relations between Guyana and Brazil after a...

BP plans to invest more in Middle East’s ‘world-leading’ oil fields

(Bloomberg) BP Plc said it will invest more money in Middle Eastern oil and natural-gas fields even as it transitions to renewable energy and...

Tullow says Suriname well campaign on schedule for Q1 2021

Preparations are on schedule for the first well targeted for 2021 by Tullow Oil in the highly prospective Suriname basin where US multinational Apache...

Maduro seeking meeting with T&T gov’t officials, report says

The Government of Venezuela has invited Trinidad and Tobago (T&T) Government officials to a meeting to discuss matters between the two countries, the Trinidad...

Bulk of oil supply next 20 years will come from ‘advantaged barrels’ – Guyana now has over 9 billion

Whatever the pace of the energy transition, the world will still rely on oil and gas for much of its energy needs until well beyond...

More Articles Like This