The official information is that Guyana’s petroleum deposits are estimated to be equivalent to 800 million to 1.4 billion barrels of oil from the results of two wells. Many more wells are expected to be drilled by Exxon in the future and no one knows how much more oil, if any, would be discovered. The US Geological Surveys has long estimated that Guyana’s offshore reserves are between 15 and 30 billion barrels.
With increasing exploration activities, if anything close to the lower figure of 15 billion barrels are discovered, for most Guyanese the future would be beyond contemplation. With reserves of only between 800 million and 1.4 billion barrels, poverty would be eliminated in a short period and Guyana per capita income of US$3,600 would rise rapidly.
With oil reserves estimated at 450 million barrels and gas reserves at 10 trillion cubic feet, Trinidad’s per capita income is about US$18,500, among the highest in the Americas. If Guyana’s production is in the vicinity of 500,000 barrels a day, as it should be, at a value of about US$80 per barrel, to which the price should eventually rise in five years, this will bring in US14.6 billion of which Guyana’s take at the usual 40 percent will be US$5.5 billion a year. Guyana’s per capita will move to about US$14,000 in the early 2020s. The Guyanese people are blissfully unaware of this potential income and what it would mean. The Government has given no indication.
For the time being the Government is studying the experiences of other countries. It is hoped, however, that whatever proposals are developed, full public discussion would be held. The Guyanese people need to be educated and engaged and decisions made with their full participation, bearing in mind the Government’s slim mandate. Pitfalls, such as in neighbouring Venezuela and Trinidad, need to be avoided.
Guyana’s biggest challenges would be to avoid corruption and oil dependency and to creatively use the income from oil to ensure that the economy is diversified. Maybe this is the opportunity for Guyana to finally realize its much-touted potential as the breadbasket of the Caribbean by investing in agriculture. If Guyana is able to capture even a small portion of the Caribbean food market of several billion US dollars a year, it would immeasurably enhance our economy. With the income from oil providing the capital to invest in infrastructure for agricultural development, this would be a real possibility.
In addition, industries based on information technology, agro-processing and services would be obvious targets for expansion. A major area of services would emerge with the construction of the Guyana-Brazil highway. While foreign assistance would still be necessary for such a venture, Guyana’s economic prospects as an oil producer would encourage such an investment.
Meanwhile existing industries could be improved. Investments in the sugar industry would return it to profitability. Incentives for small and medium scale miners would increase gold and mineral production. Guyana would be able to afford to severely restrict log export and ensure that foreign investors engage in value added production. Measures to increase productivity in the rice industry could be undertaken by additional funding for research. Infrastructure investments in depressed communities, such as Linden, and numerous villages depending on subsistence agriculture, would create an enabling environment for investment in economic activity. Economic activities would diversify and expand.
Education, health, social services would see vastly improved expenditure. With additional funds these services would increase beyond recognition, providing a more educated and healthy population and a wider safety net for the less fortunate. At last much more funds would be available to tackle intractable problems such as domestic violence, suicide, alcohol abuse, juvenile delinquency, road safety and other social problems.
In order to design and implement the many new projects, Guyana would need a vast body of technical experts and skilled personnel, which are not now available and would not be for many years, if at all, with Guyana’s small population. If we are serious about progress, an immigration policy would have to be determined and systems put in place for its implementation. In recent years Guyana has welcomed Brazilians, Chinese and a smaller number of Indians. Emigration from these countries would increase and Guyana would begin to welcome emigrants from Caricom and other countries. The Guyanese people need to be prepared for these developments.
Since there would be enough resources to go around for everybody, the competition to benefit from the distribution of limited resources would reduce in intensity. This would open up the possibility of reducing ethno/political tensions and creating a more positive climate for a political system in which ‘winner does not take all.’ Whether this will materialize is not known. Henry Jeffrey in his article last week (“Jagdeo has not projected a modern vision”) calculated the African + Mixed population to be 49.1 percent and an Indian + Amerindian population to be 50.3 percent. Taken together with Guyana’s potential economic future, one would have thought that the oil wealth and ethnic make up of the population might encourage the main political parties to consider new ways of organizing the State for a greater possibility at political consensus.