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Foster regional production with offshore oil bonanza
Maximum utilisation of the opportunities from the exploitation of the hydrocarbon resources to be extracted from the Guyana-Suriname Basin to engender sustainable development within those countries and Caricom must start with the production and marketing agreements for oil and gas mined in the offshore acreage. The negotiation of agreements to equitably distribute the earnings between the two countries and the multinational corporations operating in the basin is vital.
Beyond the taxation regime to be adopted and the price at which the resources are sold to the extracting companies, the governments of the resource-rich countries must seek to ensure that their countries and peoples be involved in the value-adding production and marketing of the materials on the international market.
Trinidad and Tobago moved forward with the middle-man arrangement, the National Gas Company extracting a premium; which before it was done would have been considered heresy. It must be the objective of the governments of Guyana and Suriname to move away from being raw material producers. They must negotiate to be partners in the downstream value-adding production and marketing of the semi-finished and finished products.
It cannot be written in stone that the owners of the resources while recognising the capital, technology and markets brought by the MNCs to the partnership, should settle for marginal returns from their patrimony.
As referred to in last week’s column, the Caricom Single Market and Economy was fashioned to have member states bring their resources (physical, financial, expertise, labour etc) together to produce semi finished and finished products, to develop technology and technological know-how and to gain substantial value out of their resources.
In the instance of Guyana and Suriname, these are countries with serious deficiencies in infrastructure, in human expert resources; but rich in mineral resources, land space, forestry, cultural diversity and more. In Guyana, there is a large Diaspora, members of which can bring back their expertise gained from their sojourn in the industrial world.
The lesson that Guyana and Suriname need to learn from T&T’s experience with the Dutch Disease—spending the “oil and gas bread” to enrich developed economies and business class at home, is that the financial resources must be invested in indigenous/ regional production. For instance, there must be the construction of roads and other infrastructure, electricity, telecommunications links to connect the hinterland with the urban centres.
The acquisition of technological capacity, the spread of food production, financial investment at home and abroad and in innovation as a means of creating new products for local and export purposes are a few of the basics which need to be done. Linking the rest of Caricom to the process of sustainable development will be critical.
I am not advocating that Guyana and Suriname take on the role of T&T as the region’s godfather to dole-out financial gifts around the Caribbean for purposes of consumption; that is the absolute opposite of what I am suggesting.
The objective is to develop production bases within the region for the export of goods and services.
The private sector in the Caribbean, one that will take a different path from the traditional import and sell model, must be assisted/nurtured into existence.
The governments of Guyana and Suriname must resist investors wanting to construct malls to foster imported consumption that soaks up foreign reserves.
Instead of inviting commercial investment, they should encourage investment capital and expertise from the region and elsewhere to utilise lands and the physical resources of these vast (by Caribbean measurements) countries.
Both countries have potentially very attractive cultural tourism products that will interest quality visitors and serve to open up the interiors of the two countries.
Investment and expertise from Caricom countries in tourism, in forestry resources, are possibilities to be exploited in a sustainable and productive manner and in the best interests of Guyanese and Surinamese with connections to the rest of Caricom.
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