With debate raging on about economic loopholes that could allow for the infiltration of the dreaded resource curse, there is a political risk that also requires careful attention.
According to Dr. Lorraine Sobers, a Fulbright Scholar currently lecturing at the University of the West Indies, Guyana needs to pay keen attention to the strength of its political institutions which are tasked with keeping democracy undefiled.
In a recent OilNOW column, the energy expert with almost 19 years of experience said, “Weak political institutions are a fast track to the dreaded resource curse, corruption, and inflation.”
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It is quite simple she said, adding that politically stable countries flourish, while politically unstable countries devolve into chaos and poverty regardless of the form of government, size of hydrocarbon reserves or the favourability of contracts secured with multinational companies.
Dr. Sobers said the World Bank’s ranking for Guyana’s Political Stability and Absence of Violence/Terrorism places it below the average for Latin America and the Caribbean. She said the same can be said for Government Effectiveness and Regulatory Quality. Dr. Sobers said given Guyana’s significant oil resources, it is imperative that there is improvement in these areas which are largely internal issues.
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Referencing perspectives by her colleague, Professor Terrence Blackman, she said he is always keen to single out the apolitical and professional regulation and oversight of Canada’s oil resources as one of the pillars of its success and a lesson for Guyana. She said legal minds have also postulated that “robust, democratic institutions” are better able to avoid the resource curse too.
In contrast to what takes place in Canada, Dr. Sobers said Venezuela’s weak political institutions and mismanagement of funds were internal contributors to the more than 96% of its citizens living in poverty. Given its proximity to the Spanish-speaking nation, she said Venezuela’s demise certainly serves a case study of what Guyana should avoid.