One wonders about the wisdom of, and reasons for, Damien King’s emphatic prediction

There is little doubt that some of the issues you raised in Monday’s editorial: `Wanted: Strong institutions’ are valid ones but one wonders why you found it necessary to hang your entire analysis on one brief and unwise prediction of Guyana’s future made by Damien King.

First of all, Damien King, who is the Executive Director of CaPRI and lectures part-time, seems to have little real knowledge of all the factors which have been thought to influence whether or not a country develops what is referred to as the resource curse. The existence of strong institutions is a relatively minor one of these.

The concept of the resource curse is a fifty year old one which became generally accepted and legitimised in later years, as were the factors which were thought to determine its existence.

In recent years, however, theorists and empiricists in the field have begun to question whether the entire concept actually has validity since studies have shown that countries which lack the traditionally required elements have successfully avoided the ‘curse’ while others which did not lack these have fallen victim.

One tenet of the concept, which has held, is that overdependence on a particular natural resource, especially one that is finite, can cause severely detrimental consequences for an economy. Somehow, Damien King seems to have missed this basic tenet in his comments to the Jamaica Observer. One wonders therefore about the wisdom of, and reasons for, his emphatic prediction regarding Guyana:

“You mark my words, Guyana is going to go nowhere.”

It would appear that this will happen solely because he says so to the Jamaica Observer, a popular regional newspaper, since he indicates scant knowledge of the steps that Guyana has been very determinedly taking to ensure development of all sectors so that the economy does not become entirely dependent on the oil and gas sector. Nor, indeed, does he indicate knowledge of anything at all about Guyana, unlike the reporter he was speaking to who took the time to conduct extensive research.

But it is very likely that he may have heard of the Theory of Rational Expectations which is premised on the fact that the behaviour of economic actors is strongly influenced by what they have reason to believe will happen and that his strong predictions may have their roots in this theory.

Damien King does, however, seem to have sufficient knowledge to cause him to declare, with emphatic certainty, that people will be killing each other for oil money in Guyana. One wonders at the reasons for such certainty.