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The “resource curse” is a phenomenon where countries with abundant natural resources, such as oil and gas, can experience negative economic and social impacts as a result of their resource wealth. The government of Guyana can take several steps to avoid the resource curse and ensure that the country’s oil and gas resources are managed sustainably and for the benefit of all Guyanese.
The discovery of large oil reserves off the coast of Guyana in 2015 has the potential to transform the country’s economy. However, as with any resource boom, there are risks of corruption, mismanagement, and other negative impacts. To mitigate these risks, the government of Guyana then the APNU/AFC has taken steps to establish transparency and accountability mechanisms.
One of the key steps taken by the said government is the establishment of the Department of Energy in 2018, which is responsible for the management and development of the oil and gas sector.
The Department of Energy is mandated to promote transparency and accountability in the sector by ensuring that all activities related to oil and gas are conducted in an open and transparent manner. The department is also responsible for overseeing the management of the country’s oil and gas resources, including the negotiation of contracts with oil companies.
In addition to the Department of Energy, the APNU/AFC government has also established the Natural Resources Fund (NRF). The NRF is a sovereign wealth fund that was established to receive and manage revenues from the country’s oil and gas sector. The fund is managed by a board of trustees and is subject to strict oversight and transparency requirements.
This oversight committee under the Natural Resource Act had 22 members across all spectrum of our country leading from the religious community, regional representative, Indigenous community leaders, Civil society, Government and opposition to name a few. The NRF is also subject to annual audits by an independent auditor, which ensures that the fund’s activities are transparent and accountable.
The APNU/AFC government of Guyana also signed onto the Extractive Industries Transparency Initiative (EITI) also known as GYEITI, a global standard for transparency and accountability in the management of natural resources. By signing onto the EITI, the government of Guyana has committed to disclosing information about the country’s oil and gas sector, including revenues and contracts. This information is made publicly available and can be accessed by anyone, including civil society organizations and the general public.
Despite these efforts by the past administration, today the current government (PPP/C) seems to be reversing all that was established to drive us into the resource curse. The first step they took was to amend the Natural Resource ACT by removing the 22 members oversight committee and replacing it with five members where the president selects the chairman. It went even worse when the government selected the opposition members who they wanted to sit on their five-member’s committee.
The second step, is that they allow Guyana to be suspended from the EITI membership. The third step is that they dismantled the Department of Energy which led to concerns about transparency and accountability in Guyana’s oil and gas sector. For example, there have been questions about the CURRENT government’s handling of contracts with oil companies and allegations of corruption. Fourthly, there is no Ministry of Finance, it has been placed under the ministry of Presidency to seek shelter under the constitution from persecution of mishandling and spending of our finances.
Guyana is on a path to no recovery unless there is change in administration or has inclusiveness in governance of the oil and gas sector and to avoid the “resource curse,” the government of Guyana must take a holistic approach to the management of the country’s oil and gas resources. This includes establishing strong legal and regulatory frameworks, investing in infrastructure and human capital, promoting economic diversification, prioritising environmental protection, and fostering transparency and accountability. By doing so, the government can ensure that the benefits of the oil and gas sector are shared by all Guyanese, and that the sector is managed sustainably for the long-term benefit of the country.