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Guyana: The Country that was not ready to win the lottery.

 
Casper 2018-12-27 00:41:52 

Oil will also generate tremendous pressure on a country known for fragile government institutions, ethnic divisions, and little transparency. The speed and focus with which ExxonMobil and its partners, Hess and China National Offshore Oil Corporation, are doing their work aren’t always being matched by elected leaders in Georgetown, who are moving far more slowly in building government infrastructure to manage the oil industry. Officials insist they have time to develop those institutions.


Oil has historically generated wealth like few commodities can - but it’s also recognized as a double-edge sword, one associated with the so-called resource curse that has marred the development of countries like Angola and Venezuela. In worried conversations across government ministries and offices in Georgetown, Guyanese are expressing worries they will be the curse’s next victim. “I’ve heard of the resource curse. . . and all the ills of oil, and I can tell you I am quite petrified,” acknowledged Raphael Trotman, the minister of natural resources, in an interview in late April.


“Lower-middle income countries like Guyana,” said Michael Ross, a political scientist at the University of California, Los Angeles who has written on the subject, “tend to have great difficulty using the wealth they have newly discovered in a way that benefits their people.”


The problems associated with resources are multidimensional, according to Ross and other researchers. Commodity prices rise and fall unpredictably on the global market, whipsawing a country’s economy and budgets. Oil and minerals can become so valuable they displace other sectors that could potentially generate growth. And all too often, members of government and elites seek to benefit financially from their country’s resource endowments. There are also plenty of cases where international investors cooperated with corrupt, or simply shortsighted, local officials if they stood to benefit themselves.


The resource curse isn’t inevitable, and Norway and Canada, with their rule of law, diversified economies, and strong institutions, are frequently cited exemplars of resource management. Yet in the worst cases, the control of resources can descend into armed conflict. Petroleum is “a very highly concentrated economic activity that requires permitting and things like that from the government, so it’s just incredibly tempting for the executive branch to capture those resources,” said Sarah Chayes, a senior fellow at the Carnegie Endowment for International Peace.



In Guyana, observers fear oil will intensify the longstanding competition between ethnic Indians, who make up about 40 percent of the population and people of African heritage, who comprise about 29 percent of the population, according to the country’s 2012 census. Both have longstanding complaints about the other, going back to the days of the Afro-Guyanese strongman Forbes Burnham, who ran the country between 1964 and 1985, rigging elections to ensure his power. The Indo-Guyanese-dominated People’s Progressive Party won elections in 1992, ruling for the next 23 years but generating criticism for alleged corruption.

 
dayne 2018-12-27 08:25:12 

In reply to Casper

From what is written by many analysts it appears that Guyana will take some time before they see measurable benefits from the oil. They signed a contract that have many loopholes by which they could be taken advantage of.