Will Guyana go boom or bust?
The long-impoverished South American nation is striking it rich as Exxon Mobil taps new off-shore oil wells that analysts say could turn Guyana into the world’s No. 1 per capita oil power in five years.
But the massive revenue surge brings with it risks that the tiny country may fall victim to the dreaded “resource curse” that has bedeviled other resource-rich countries in the past. The Guyanese need only look across the border at the cautionary tale provided by Venezuela.
Whether Guyana, where 1 in 3 live in poverty, becomes the next Norway or goes the way of Venezuela “will depend on who has custody of the distribution of the new oil and gas wealth,” said the nation’s attorney general, Basil Williams.
On a visit to Washington last week to tout the country’s anti-corruption and social development programs, Mr. Williams argued Guyanese President David Granger is well aware of the dangers that could undermine the nation’s transformation.
Since coming to power four years ago, the Granger administration has “embarked on a very strong anti-corruption drive,” Mr. Williams told The Washington Times. “When we took over, we inherited massive corruption.”
The left-wing People’s Progressive Party (PPP) that held power for the previous 23 years “just took care of family, close friends and cronies,” the attorney general said. “They really impoverished the people of the country.”
Exxon will begin pumping oil off Guyana’s coast by next year — a reality that’s fueling some serious political infighting in the former British colony’s capital, where the PPP still holds significant parliamentary seats.
The opposition accuses Mr. Granger, a retired Afro-Guyanese military commander, of being no less corrupt than past governments and of giving the U.S. energy giant overly generous contracts since 2015.
Such allegations are expected to be front and center in elections slated for March 2020.
Mr. Williams noted that when Mr. Granger came into office, Guyana was on the blacklist of the Paris-based international financial crime-fighting group the Financial Action Task Force (FATF). “We were blacklisted because of the state of the economy, the presence of money launderers and narco-traffickers. We were virtually seen as a narco-state,” the attorney general said.
Guyana got off the FATF list in January 2017 and the reason, according to Mr. Williams, is that “we have substantially reduced the element of corruption.”
In addition to establishing budgetary independence for the nation’s judiciary, he said, the Granger government has pushed through whistleblower protections to prevent reprisals against officials spotlighting corruption.
The government has also created a natural resource fund, requiring the current and future governments to preserve a portion of oil profits annually and begun pushing a “green state development strategy” aimed at using oil boom profits to build infrastructure that harnesses wind, solar and hydro resources for Guyana’s own domestic energy needs.
The goal, said Mr. Williams, is for Guyana to become like Norway — a major oil producer whose own people use “green power.”
But the transition promises to be tricky.
A recent New York Times report described the nation of about 800,000 as a “vast, watery wilderness with only three paved highways,” where “children in remote areas go to school in dugout canoes.”
The answer, according to Mr. Williams, is basic: “Education.”
The president “believes education makes the nation and that no child should be left behind,” the attorney general said, outlining a government initiative since inking Exxon contracts to promote what began as the “three B’s.”
Mr. Williams and other Guyanese officials are wary of the economic mismanagement and political corruption that grips neighboring Venezuela after years of socialist governance funded by oil revenues.
“We’re very concerned about what’s happening next door in terms of the meltdown,” Guyanese Ambassador to Washington Riyad Insanally told The Washington Times. “We have between 35,000 and 40,000 Venezuelans coming over [the border], and we are attending to their needs as a humanitarian gesture, … but they come in bringing severe security concerns.”
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