Oil, Government Take & Spending:Page Navigating Guyana’s Development Challenges - 11

As promised last week, today’s column first indicates the main lessons to be learnt from other developing countries’ experiences in dealing with implementation lags when preparing for the coming on-stream of a relatively massive extractive petroleum sector such as Guyana’s. As also noted my specific focus is on lessons learned from a case study review conducted on Mozambique in 2013 by the Norwegian Oil for Development Programme (OfD). Following the completion of this task I shall turn to consider the seventh topic on the list I provided of the top-ten development challenges, which the successful spending of Guyana’s petroleum revenues has to navigate.

Among the many lessons concerning implementation lags, which I draw from the Mozambique study four are particularly useful. These are indicated below. After peak production is reached petroleum resource depletion will step in. And, as a consequence if these resources are to benefit present and future generations of Guyanese then fairness in its use, especially its first use, is an obligation for every generation.

Second the oil and gas sector is notorious for causing serious environmental damage. This is due to a mix of causes including: willful neglect, cutting corners, lack of suitable preparation, and even Acts of God. It is unfair for the present generation to plan to use up the national petroleum patrimony and irresponsibly leave any resulting environmental damage to be attended to by future generations. As we shall observe next week this cuts across a major theoretical concern, which is how to measure for intergenerational equity on the principle that the present generation of Guyanese inherits its natural resources from previous generations and holds them in common with all generations, past and future. It therefore has an obligation to pass it on in reasonable condition to future generations.

Third this discussion recognizes the Authorities have framed Guyana’s development strategy as promoting a “Green State and Sustainable Development”. Under this rubric a petroleum dependent path of economic growth inexorably magnifies the challenges of intergenerational equity.