Support Village Voice News With a Donation of Your Choice.
Guyana is as beautiful in its organic natural panoply. It’s people are capable of great beauty, hospitality and artistry despite being divided according to race between one side that were “comfort slaves” and the other that were chattel slaves. Enslaved nonetheless – in a pattern repeated across the commonwealth – Guyanese society is divided along vulgar racial lines by a viscous delusion of superiority by people who are superior to no one!
Recently, Guyana has stumbled into emergence as a petro-state. As an economist – who worked with Mariam Wu the former Vice Premier of China – and as former chairman of the Turks and Caicos National Investment Agency (which oversaw all FDI), and with 30 years’ experience as an economics professor, Guyana’s oil deals about which I have written extensively are some of the most poorly structured deals I’ve witnessed in my career.
My comments are posted everywhere and as such I won’t go into them here. Suffice to say, Guyana front loaded its oil exploration with debt. It took its share of profit in product rather than cash, even though it’s not a market-maker, it lacks a comprehensive spill risk protocol, the determinative aspects of the deal structure do not lie with Guyana.
But those are not the worse fractures:
- Guyana ought to have established a Sovereign Wealth Fund at the moment of the resource discoveries.
Because the impact of such discoveries on land price appreciation is well-known and because I wrote the same to whomever cared to listen.
Because the best way to ensure the long-suffering politically and racially divided people of Guyana benefit from the new – in my view, momentary prosperity – was to place land to be developed into a Sovereign Fund – as I did in Turks and Caicos – so that as the land appreciated in value, that value is shared by all Guyanese people!
Again, again why?
Because the people of Guyana may never see a penny from actual oil resources. But if there were a Sovereign Fund and all the areas to be developed were placed in such a fund, then each Guyanese citizen were joined to the fund by their national insurance ID. When that land is sold or leased for development, either for office parks, luxury hotels and hospitality developments, housing communities and city centres, a share of the income would go to all Guyanese people equally.
If this had been done two-and-a-half years ago when I wrote of it, the current spike in Guyana land prices in the speculative areas would have produced wealth for all Guyanese already!
I call on the government to grasp the point: you shall never be able to distribute a share of wealth to the Guyanese people directly to keep pace with land price appreciation.
You must establish a mechanism that generates wealth at the pace of demand and that can be done only through a Sovereign Wealth Fund.
Establish it now:
- It must be owned by citizens as life members and not the government
- When a person dies their share reverts to the fund
- The fund vests at age 18.
- Up to 25% of any income from the fund can be withheld as a penalty for committing crimes.
- The fund should provide incentives for education and social work.
- Teachers, police and fire services ought to be given key benefits from the fund.
- The Sovereign Fund should own the eGovernment platform for Guyana and it should be the mechanism to promote transparency and accountability for this new wealth.
If Guyana fails at this, it’s already on the path to the “resource curse”; if only because the current rise in property values without a sovereign fund, means ordinary Guyanese people are being priced out of Guyana…even as Guyana fails to develop. Guyana will be left with a series of ugly, half built failed projects and once the oil has run out or demand for it slows, Guyanese people would be no better off.
I pray this – which has happened to more efficient places than Guyana – is not a fate to add to dashed hopes yet again…in which the people of Guyana lose because of the smallness of their politicians.
About the author
Ambassador Professor Gilbert Morris is a Diplomat, Econometrics, Neuroscience; Fr.Chairman: Turks & Caicos National Investment Agency; Fr. AFAM Director: GMU; Poet