Dear Editor,
Your editorial “Spending the oil money” on April 25, 2022, argues the Guyanese government is making a flawed decision by immediately using funds from the Natural Resource Fund (NRF). I understand the hesitation and a right to be cautious, however, Guyana is in a position as an emerging oil producer and should be taking advantage of the global demand for oil. The oil market, hovering around US$106 per barrel, creates a unique opportunity for the country. So, I disagree with the claim that it was “deeply flawed” for the government to use the US$607 million earned from oil last year.
The concern that Government dipping into the NRF in its first year of operation will set a bad precedent for future years of excessive withdrawals is misguided. Oil revenues will be a fact of life for Guyana for many years to come and this amount will soon look trivial. This first allocation, to support the 2022 budget, is a 44% increase over 2021 with increased spending on infrastructure and electrification. The implication that no one has a clue how the first year’s allocation will be spent is an unfair mischaracterization of the government’s continued transparency with Guyanese people.
Yes, it is imperative that monies flowing in is spent wisely, but we should also appreciate the endless possibilities afforded to Guyana today, unimaginable a few years ago. It is one thing for a well-developed country like Norway, with good infrastructure, to think about saving oil money for the future, but Guyana has real needs. This money must be put to use to better the lives of citizens—better roads and bridges, reliable electricity, better schools, bolstering seawalls and coastal defenses—all things that can help us prosper in the long-term.
The Government can use the returns from the oil and gas sector to invest in the future of the country, which will not include oil and gas forever. Guyana’s rapid development is a prime example of what can happen in a short period of time when investments are made in the country. There are more areas where the Government rightly recognises it has an obligation to spend revenues to help. Just look to education and healthcare, both sectors received over a 20% increase this budget cycle.
Caution about spending is well-intentioned and every safeguard should be put in place to ensure that funds are spent wisely and transparently. But Guyana is sitting on an opportunity that will only come once and the Government is wise to seize it.
Sincerely,
Romel Khan
