Guyana: Americas fastest growing Petrostate and a new development theory focused on poverty eradication

Last week’s column wrapped- up my consideration of ExxonMobil’s performance as a leading protagonist against global climate policy transition. As I pondered my choice of an appropriate follow-up topic for deliberation in this long-running series on Guyana’s oil and gas sector, I received a circular communication sent from the desk of the Tri-continental Institute for Social Research inviting me to join in a global research effort. This is a network of social research institutes located in the Global South.

The invitation ambitiously asserted that the research effort was nothing less than delivering on the task: The World Needs a New Development Theory That Does Not Trap the Poor in Poverty.

As that Institute is closely linked to the theory of noncapitalist development, NCD, I immediately realized that this invitation implies a global task aimed at grand theorizing and may well end up as being far too abstract, if it is not firmly grounded and rooted in the ever changing, yet inherited, concrete historical nation states and their social, structural, and cultural realities and relations of geography, resources, capital, people and their knowledge. This much has become readily apparent to me from this series of columns I have been publishing since Guyana’s discovery of oil and gas. Furthermore, in dealing with this happenstance [as I term it] in Guyana I have advanced an anti-poverty and pro-development policy thrust that focuses on cash transfers to the poor.

Given the above, I plan going forward to 1] circulate the main propositions advanced in the Tricontinental Institute’s circular and 2] revisit issues related to cash transfers, considered priority in this extended column series on Guyana’s emerging oil and gas sector.

In the interest of transparency I note the Tricontinental Research Institute’s Website lists a Preview of my article entitled, The “Non Capitalist Path” As Theory and Practice of Decolonization and Socialist Transformation, Latin American Perspectives Vol 5 No 2, Sage Publications 19,

The Institute’s Thesis

The Institute advances its case by way of a summary description of the present condition of on-going global efforts to meet the United Nations Sustainable Development Goals, SDGs. Thus, it notes that, In June this year, the UN SDGs Network, which tracks the progress of the 193-member states towards attaining the 17 (SDGs) from 2015 to 2019, had reported ‘the world made some progress on the SDGs, although this was already insufficient to achieve the target goals. Indeed, since the outbreak of the pandemic in 2020 and other simultaneous crises, SDG progress has stalled globally. To recall, this development agenda had been adopted in 2015, with targets intended to be met by 2030.

Therefore, halfway to this 2030 deadline, the report noted that “all of the SDGs are seriously off track”. Why are the UN member states unable to meet their SDG commitments? ‘The circular notes at their core “the SDGs are an investment agenda: it is critical that UN member states adopt and implement the SDG stimulus and support a comprehensive reform of the global financial architecture’. However, few states have met their financial obligations. Indeed, to realize the SDG agenda, the poorer nations would require at least an additional $4 trillion in investment per year”.

Furthermore, the Institute goes on to point out no development is possible these days, as most of the poorer nations are in the grip of a permanent debt crisis. And, it goes on to assert yet further that this is why the Sustainable Development Report 2023 calls for a revision of the credit rating system, which paralyses the ability of countries to borrow money (and when they are able to borrow, it is at rates significantly higher than those given to richer countries). Furthermore, the report calls on the banking system to revise liquidity structures for poorer countries, ‘especially regarding sovereign debt, to forestall self-fulfilling banking and balance-of-payments crises.

The circular concludes from the above that, it is absolutely essential to place the circumstance of the sovereign debt crisis at the top of global discussions on development. In pursuit of this thesis the UN Conference on Trade and Development (UNCTAD) estimates public debt of developing countries, excluding China, reached $11.5 trillion in 2021’. That same year, developing countries paid $400 billion to service their debt. Of note, this amount is more than twice the amount of official development aid they received. Most countries are not borrowing money to invest in their populations, but to pay off the bondholders, which is why we consider this not financing for development but financing for debt-servicing. Reading the UN and academic literature on development is depressing. The conversation is trapped by the strictures of the intractable and permanent debt crisis.

Whether the issue of debt is highlighted or ignored, its existence forecloses the possibility of any genuine advance for the world’s peoples. Conclusions of reports often end with a moral call – this is what should happen – rather than an assessment of the situation based on the facts of the neocolonial structure of the world economy: developing countries, with rich holdings of resources, are unable to earn just prices for their exports, which means that they do not accumulate sufficient wealth to industrialise with their own population’s well-being in mind, nor can they finance the social goods required for their population. Due to this suffocation from debt, and due to the impoverishment of academic development theory, no effective general theoretical orientation has been provided to guide realistic and holistic development agendas, and no outlines seem readily available for an exit from the permanent debt-austerity cycle.

Conclusion

Next week I conclude this discussion on the call for a new development theory that takes the poor out of poverty.