Saturday, April 1, 2023

Guyanese urged to get out of poverty now before oil is left in the ground

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This is Guyana’s chance to get out of poverty and the country should take it, since in the coming years a good deal of the oil discovered in the offshore basin, will remain just there. This is the advice that was given to a special caucus of Guyanese Cabinet Ministers by eminent Professor of Economics and Public Policy, Sir Paul Collier, of the University of Oxford and the Blavatnik School of Government.

Sir Paul, following the special Cabinet Briefing on Wednesday met with sections of the Guyanese media corps in the Eldorado Room of the Pegasus International Hotel for an informal discussion on the South American nation’s oil and gas economy and on his special briefing with the Cabinet.

The Professor told media operatives Guyanese must remain cognizant of the fact that the demand and price for crude in the coming decades will subside greatly.

“At some stage fairly soon, say 2050; a lot of this oil is going to be left in the ground, it’s your chance to get out of poverty, take it, take it,” he implored.

According to Sir Paul, Guyanese authorities in their stewardship of the economy must come to grips with the fact that oil, like other forms of energy, become technology obsolete, “even before they run out.”

Oil, he said, “is already I think in the first stages of technological obsolescence,” and drew reference to the emergence of shale oil which has contributed to a plunge in oil prices.  Shale oil is a substitute for conventional crude oil.

“What we are now seeing on the horizon (too), is the whole array of green technology, the non-carbon energy sources.” He said it is currently unclear when the new non-carbon, renewable sources of energy “will kick in.”

Sir Paul told the media that the Cabinet Counsel of Ministers during the special closed door session was presented with a range of these forecasts related to the oil and gas industry.

According to the Economics and Public Policy Professor, after 2050 oil will very rapidly begin to become less valuable.

“Don’t imagine that because you have discovered oil you can turn yourself into a sort of Saudi Arabia in the 1970s, and can live without work forever.”

He was adamant, “this is going to be a temporary stream of money.”

The Professor reminded that oil almost always presents “quite significant amounts of money for this uncertain length of time, but not that long and so it’s a chance if you use it well, decisively, to lift the society out of poverty.”

He was adamant, Guyana “use the bulk of its revenues from oil to invest in the future—that means assets like human capital…things like a better transport network, and electricity, the future jobs.”

“It’s that narrative of patience and prudence and thinking of your children’s future that’s the narrative that has to set in, it’s the purposive use of this money,” he said.

Sir Paul is a world renowned thinker on the resource curse. His books include; The Bottom Billion, Wars, Guns and Votes, Democracy in Dangerous Places and The Plundered Planet: How to reconcile prosperity with nature.

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