Dr. Eric Williams, the late Prime Minister of oil-rich Trinidad and Tobago, once famously declared, “oil don’t spoil.” However, for Guyana, the new kid on the oil block, there is copious evidence from Venezuela and Nigeria that, although oil does not spoil, it can damage lives, livelihoods, and entire societies. The key question, therefore, is: how might Guyanese political and corporate leaders avoid these risks?
The success stories of countries such as Norway and Kuwait, where the major pitfalls of oil have mostly been avoided, suggest that success revolves around several interconnected variables. These variables can be placed into several baskets—or perhaps barrels would be more appropriate given the product we are dealing with. While one of the variables is the “Technical Skills and Competencies” barrel, which is undoubtedly critical, but beyond the scope of this article, there are three others, some of which get short shrift when newcomers rush to reap the rewards of their black gold.
The Value of Values
One of those variables is the “Values” barrel. Oil booms generate considerable wealth and foster greed and graft, making corruption a corrosive spoiler of individuals, institutions, and sometimes whole societies. Thus, honesty is a value that must be both preached and practiced not just by government leaders, but also by corporate and civic leaders, religious and educational institutions, and the media.
Going hand in hand with honesty, transparency not only shares with citizens what, when, and how government and business interact, but also builds and sustains trust in key players and institutions. In Guyana’s case, it is essential to understand the racial and political healing that is needed in the aftermath of the political-electoral roller coaster. Accompanying honesty and transparency is respect for the country’s racial, religious, and political diversity, and also for its laws and institutions. Corruption and violation of the law and human rights reflected in the high road carnage are two examples of the considerable respect deficit in the country today. Respect is vital for the healing needed, especially given the dynamics of the recent contest for political power.
The “Institutions” barrel is another essential element. Regulatory institutions must not only exist, they must be functional and efficient—all the more so when the industry landscape is dotted with multiple oil companies, some of which have long histories in various parts of the world where their practices have been filled with shady dealings. Some of these multinational companies can also bring their technical and legal skills and competencies to upend weak institutions and take advantage of political or civil discord.
While Exxon Mobil dominates the headlines regarding the Liza Field with its oil reserves totaling eight billion barrels, the Liza operations involve a consortium including Hess, another United States oil giant, and China’s National Offshore Oil Corporation. However, they are not the only players in Guyana: Anadarko, which is headquartered in Texas and acquired by Occidental Petroleum in 2019; CGX Energy of Canada, Israel’s Ratio Oil, Spain’s Repsol, and Britain’s Tullow are also operating there with many more likely to turn their attention toward the new El Dorado.
Yet, while strengthening regulatory institutions is imperative, it is not sufficient. Crucial too, are the country’s educational and judicial institutions. As for the former, it is necessary to apply a holistic reinforcement of elementary and secondary education, technical and vocational training, and higher/tertiary education in Guyana. In relation to the judicial sector, efforts should not be made solely to deepening and broadening the competencies of current magistrates and judges, but a reform of the entire judicial system and its anachronistic operating modes may become necessary. The Bar Associations will also need to broaden the educational and practice horizons of their members.
Lastly, professionalism must overcome patronage in the regulatory, educational, and judicial institutions. The temptation to make appointments or replacements based on political or racial partisanship with the intention of ensuring loyalty or rewarding electoral allegiance must be resisted.
The final variable is the “Infrastructure” barrel. Both the previous and current government must be commended for recognizing the importance of transportation and telecommunications infrastructure. They have touted plans to build new roads, bridges, airports, and seaports, and to refurbish existing structures. Quite appropriately, the Ali administration plans to use some of the oil funds to underwrite these infrastructure investments. Nonetheless, they would be wise to begin considering infrastructure investments that take into consideration the country’s “Wet Neighborhood.”
Compared to the average territorial size of Caribbean nations, Guyana is relatively large. Twenty times the size of Jamaica, it could accommodate all the member countries of CARICOM within its 83,000 square mile territory. However, Guyana faces some stark realities. There are some places along its 285-mile Atlantic coast that are as much as six feet below sea level. The capital, Georgetown, lies along the coast, where approximately 80 percent of the country’s population lives. Moreover, its coastline is subsiding due to groundwater extraction, soil compaction, and drainage of the wetlands.
To make things worse, because of climate change, the sea level has risen at a rate of six times the global average making the country increasingly vulnerable to coastal flooding, which is a perennial problem. The most devastating flood occurred a decade and a half ago, and affected more than 80 percent of the population, killing 34 people and leaving an estimated $500 million in damages. Still, given the vicissitudes of climate change, flood mitigation alone will not suffice. The relocation of the capital is also necessary.
Guyana has two major assets that it can leverage for these existential infrastructure investments. One is the funds from the oil boom; the other is a president with expertise in urban and regional planning, having secured a doctorate on the subject. I hope the government uses these assets sooner rather than later. While oil does not spoil, a massive torrent of water from the Atlantic Ocean could definitely spoil things in unimaginable ways and shatter the hopes and dreams of the Guyanese people as well as those of the oil executives and their investors.
Ivelaw Lloyd Griffith, a former Vice Chancellor of the University of Guyana, is a Senior Associate with the Center for Strategic and International Studies in Washington, DC. His next book, Challenged Sovereignty, will be published by the University of Illinois Press.