Dear Editor,
Guyana has struck black gold. But the government’s plans for local content worry many of us. At best, they may not reflect reality in terms of our capabilities. At worst, they could represent a new era of political favors.
We have made tremendous progress so far. Why would we seek to derail that progress with onerous local content and other requirements that we have seen lead to worse outcomes in countries like Brazil? It has been clear from the start that the revenues will be the real prize for Guyana, not the jobs or the contracts. That is as it should be. Revenues can be divided equitably between all citizens or fund projects with wide benefits like new roads. Contracts cannot.
Companies should be encouraged to hire qualified and ambitious local companies. But there is a fine line here. I think all patriotic citizens would understand that a small price for buying local is worth it to develop our capabilities. But we should not compromise this opportunity with larger sacrifices that would only benefit a select few. Overly aggressive local content provisions sound good, but not at the cost of delays or lower revenues. And both are looming on the horizon if some of these rules are not rethought. If local content laws require hiring a firm with less experience and higher prices just because it is technically Guyanese owned, everyone else loses out because those extra costs come right out of our oil.
The small benefit that goes to a local company that got the contract might pale in comparison. The efforts by some to make Guyanese companies nearly automatic recipients of contracts they have neither the skill for experience for reeks of cronyism. Guyanese do not need another example of favours going to a special few while the rest lose out.
Any effort that is not in keeping with international best practices and backed up by the appropriate framework, including technical capacity and competency, will undoubtedly result in corruption, much like we have seen in other countries around the world. While we work to make the Guyanese oil and gas sector world-class and empower local companies, we must also remember the lessons learned from countries like Nigeria and Angola and not repeat the same mistakes. The focus should be on utilizing the revenues we have to slingshot Guyana to the forefront of the world economy.
Regards
Donald Singh
