Introduction
Today’s column addresses three additional “top-10 economic challenges” in light of Guyana’s coming petroleum sector; namely: intergenerational equity, the permanent income hypothesis (PIH) budget rule, and managing public expectations.
Challenge: Intergenerational Equity
The notion of intergenerational equity has several components to it. These are not simply economic in nature, but also apply across such crucial areas as environmental, sociological, psychological, legal, and social matters. In these varied applications, the concept of intergenerational equity conveys the principle of fairness across generations.
Consequently, three petroleum industry-related concerns arise. First, Guyana’s petroleum discoveries are, for practical purposes, finite and non-renewable. Consequently, after peak production is attained, petroleum resource depletion kicks in. Thus, if these resources are to benefit present and future generations, then fairness in their current use is an absolute obligation to future generations.
