Significant jobs and prosperity await Guyana, but only if revenues from oil production, set to begin in 2020, is invested wisely. Deputy Chief of Mission of the US Embassy in Guyana, Terry Steers-Gonzalez, says the time for policy makers in Guyana to start thinking strategically about how these funds will be utilized, “is now” since returns from the known oil reserves are enough to transform the South American country.
“The confirmed petroleum reserves guarantee Guyana the revenue to allow it to develop industries and infrastructure and to create a broad-based economy with true value added, which means jobs and prosperity, if done right,” he said.
Authorities in Guyana are racing to put a raft of legislation and other measures in place which they hope would ensure full transparency and accountability in the country’s emerging oil and gas industry. The management of oil revenues has also been high on the agenda of government and a major area of concern for the population of around 800,000. With a history of corruption allegations at the institutional level, Guyanese have been vocal in recent months about their concerns and expectations regarding how government intends to manage the nation’s oil wealth.
“It would be critical to think strategically now,” the US Diplomat points out, about how best to invest oil revenues in ways that develop diverse industries, education, energy independence, quality education and health services as well as physical infrastructure and citizen security.
These all represent areas of immediate concern for Guyana, which means government would have to find ways of prioritizing how the oil revenues will be spent. Just over the weekend, a massive fire razed almost the entire set of buildings that housed the country’s main prison, which has renewed long-standing discussions about the need for a brand-new maximum-security facility. Authorities said over the weekend that such a facility could cost as much as six billion Guyana dollars. There is also urgent need for the upgrade and expansion of physical infrastructure, such as roads and bridges, throughout the entire country.
Investing in infrastructural and other needs, Mr. Steers-Gonzalez said, would form the basis for real job creation and wealth generation. “These are among the areas that will create significant job numbers, not local content in the offshore operation.”
He was quick to point out that “revenues can be fleeting, either coming in, or going out” and as such, the need for facilities, such as a Sovereign Wealth Fund, was critical.
Guyana is currently putting together draft legislation for a Sovereign Wealth Fund and the country’s Minister of Finance recently announced that public consultations will be held to examine this.
The Deputy Chief of Mission made these remarks at Guyana’s first oil and gas conference and exposition, held in March.