The literature on the Resource Curse, summarised by Frederick van der Pleog of the Oxford Centre for the Analysis of Resource Rich Economies in his article “Natural Resources: Curse or Blessing,” is clear that resource rich countries do not all experience strong growth and enhanced development. In fact, “a resource bonanza often induces appreciation of the real exchange rate, deindustrialization, and bad growth prospects, and … these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems … a resource boom usually reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in nondemocratic countries, and keeps in place bad policies … resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets.”
Indeed, the empirical literature has even found that several of the foregoing factors, along with others such as ethnic fractionalisation, the volatility of commodity prices, unsustainable policies and a loss of “learning by doing” in sectors that will fall behind after a resource boom, are the fault lines that increase the probability of a resource curse occurring. We’ll do well to recall that the commodity boom of the seventies in Guyana was followed by decades of economic disaster, in our first encounter with the Resource Curse. The subsequent period, after the international lending spigot had been opened post-1989, did result in enhanced economic growth but not without some standard Dutch Disease effects, mitigated albeit by a programme of “liquidity sterilisation” that forestalled an appreciation of the real exchange rate.
But in all seriousness, the cards – including some very recent ones – are stacked in favour of the occurrence of the resource curse in Guyana. The
University of Guyana continues to play its part as our national university, hosting for the second year running a Green Economy Workshop, as our contribution to increasing the probability that the giant oil discovery will redound to a blessing for us. The 2018 GE Workshop involves a Learning Camp at the Tain Campus, carrying the analytical discussion of green economy issues, externalities, collective action & voluntary cooperation, the resource curse, and social norms and culture, to a region that has certainly been hit hard by policy that seems more driven by an anticipation of the oil revenue bonanza than by good economics. There will also be a roundtable on economic diversification on Saturday, August 4, 2018.
The GE Workshop then returns to Turkeyen on Monday, August 6th, for a set of roundtables on Economic Diversification, Energy Policy, Preparing for First Oil, Education Reform and Culture and Religion. There will also be small workshops organised around the creation of an online carbon calculator, financial inclusion, fiscal rules for a sovereign wealth fund, carbon taxes, advanced biofuels and accounting for changes in natural resources. These roundtables and small workshops will run from August 6 – 9, 2018.
Several leading intellectuals and leaders in our society have graciously agreed to participate in the 2018 Green Economy Workshop. The Faculty of Social Sciences is sponsoring the participation by Prof. Carlos Mendoza Pottella, oil expert from the Universidad Central de Venezuela and of the Central Bank of Venezuela.
Persons wishing to find out more about the 2018 Green Economy Workshop might contact me directly at email@example.com.
Thomas B. Singh (PhD)
Dept. of Economics
University of Guyana