In an effort to ensure it did not suffer the fate of many resource rich countries around the world, Trinidad and Tobago carefully outlined the errors that should be avoided in the management of petroleum revenue; but then proceeded to commit every one. This view has been shared by Trinidadian Economist, Dr. Roger Hosein, who has delivered several public lectures in Guyana since the world class Liza discovery back in 2015.
He said Trinidad and Tobago had an opportunity to properly prepare for the management of petroleum revenue which should have ensured that known mistakes were avoided at all cost. “Trinidad and Tobago also had a chance to prevent these things from happening. In my view we made a list of some of the errors not to commit as an oil producing economy…and then we proceeded to make every error,” he said.
Despite the efforts of those tasked with managing the economy, Dr. Hosein said somehow the real effective exchange rate was allowed to appreciate, and the State began intervening in the labour market; thereby challenging the private sector for workers.
“The State embarked upon a programme where basically on each day they spent all the oil resources extracted on that day. All of these things are the opposite of what good practice theory would tell you,” he pointed out.
Guyana began producing oil in December 2019 and has so far received close to US$200 million from oil exports and royalty. The Government has said it intends to establish a robust framework for managing the Natural Resources Fund before it taps into these revenues.
