Exxon 18th oil strike: Guyana’s resource curse, blessing or cure?

Earlier this week ExxonMobil announced its eighteen discovery, which will add to the more than 8 billion barrels previously discovered. In light of on-going discoveries and a volatile political environment, many are bound to ask if this blessed land could be victim of the resource curse.

Professor of Economics, Syed Mansoob Murshed explains, “The ‘resource curse,’ or ‘paradox of plenty,’ refers to the long-established notion central in development economics that countries rich in natural resources, particularly minerals and fuels, perform less well economically than countries with fewer natural resources. In other words, resources are an economic curse rather than a blessing.”

Africa, a continent known for its resource richness, has not escaped the curse. For instance, Sierra Leone with diamond, Nigeria with oil, Liberia with rubber, yet the masses remain poor in the presence of plenty. Politicians become corrupt, allowing themselves to be influenced by external forces who bribe them to turn a blind eye to the pillage of the nation’s wealth and pervasive poverty amongst the masses.

Guyanese have been forewarned of the consequences in countries that allow corruption and foreign forces to influence internal politics. They are known stories where poverty remains widespread as the masses suffer in places such as India, Africa and Venezuela, victims of the resource curse.

In January, Dr Amit Kapoor, Chair, Institute for Competitiveness, India writing in BuisnessWorld addressed the curse of the country where mineral deposits are abundant. In the article, ‘Breaking The Resource Curse in India’ Kapoor notes that “Enabling labour-intensive growth will help India get its growth story back on track and eliminate poverty at a much faster pace. And the resources mining sector could hold the keys to that.”

Ellen R. Ward, writing in Forbes (17 May, 2017), attributed the collapse of Venezuela’s economy to the “oil curse” noting that “the failures of socialism were coupled with the government’s over-reliance on revenue from a single commodity.”

The uniqueness of Guyana’s diversity (race, politics and resources) presents an opportunity to be a model nation in avoiding the curse. Our own Professor Clive Thomas last year argued for yearly direct payment of US$5000.00 per household from oil revenue, as a means of addressing widespread poverty. It is his informed opinion this “could remove the curse that has bedeviled Guyana since the days of slavery.” Others have since given support, and added their own list of direct and indirect payments.

The Village Voice is calling for national conversation on a Sustainable Development Strategy to manage all Guyana’s natural resources, particularly non-renewable, and concomitant revenues. No government has all the answers and it is foolhardy for any to think they do. Most political parties who contested the election received votes and/or won seats in the Executive, National Assembly and Regional Democratic Councils. The right to vote for one’s preference is not only guaranteed but equally is that representation in the management of the nation’s resources.

The establishment of a Local Content Commission must facilitate the widest involvement of citizens and groups in developing a policy that will benefit all. The politics of immaturity must be cast aside for a politics that recognises inclusion is necessity. Political up-manship and revenge will not work nor be allowed to succeed.

No right thinking person can deny a major underlying reason for our volatile politics is mistrust of the other and fear the other will marginalised them. Invariably, in spite of every country’s uniqueness, the commonality exists that political approach is always an underlying factor of the resource curse.

Serious attention must be given to make real the ambition of One People, One Nation, One Destiny.  Exxon’s new strike serves as a reminder there is work to do.  Guyana can be a model nation, using its rich resources in helping to cure the social, political and economic challenges through inclusivity, or be doomed to perpetual failure. Undoubtedly, many prefer the former.