Dear Editor,
Having reviewed Tuesday’s presentation, Rystad’s analyst showed that, with an oil price of US$70 per barrel, annual revenues from offshore activity could reach US$20 billion shortly after 2030.
Based on my interpretation of the breakdown of revenues, it looks like a vast majority of those numbers come from free cash flow and Government profit oil.
These are very impressive figures, especially in the context of the current size of our economy, and this new fortune can be the catalyst for exponential growth and transformation at unprecedented levels.
But the big question remains: How does Guyana utilise these earnings? How would these profits be best allocated to ensure maximised benefit on a sustained basis? Do we build new schools, hospitals, airports, roads and bridges? Do we seek to enhance existing service and production sectors? Do we focus on developing new non-traditional sectors?
While opinions on this may vary, a common point of reference has always been the Dubai Model. Why? Dubai has successfully utilised the profits from its oil to fund a service-based economy to a level that has earned global respect.
Admittedly, conditions between Guyana and that Arab country may not be identical; but irrespective of geographic, hemispheric, economic, or population- related differences, diversification remains the best tool to remain relevant in a constantly changing global economy.
While emphasis needs to be placed on improving infrastructure and social services, the focus should be on identification of new sectors which can be fuelled (no pun intended) by revenues earned from oil and gas.
Regards,
Andrew Mc Bean