Guyana’s gas to shore project, geared at reducing the current carbon footprint while preparing for eventual transition to green energies, could only be deemed successful if it is matched to sustainability commitments made, says University of the West Indies Professor, Dr. Graham King.
“Gas to energy is a good option. It is the sensible thing to do but it has to be matched…and a lot of the issues comes back to commitments [made]. The rhetoric is spot on at the moment but it has to be in actuality,” Dr. King told the Stabroek News in a recent interview.
“Once you have electricity and build up this strong capacity it puts you in a good position for not only low cost manufacturing and industry services improvement, but also to look into other sustainability pictures,” he added, saying that emphasis must be doing what was promised.
A lecturer in the Faculty of Engineering at UWI and Board member of CARIRI, the Energy Chamber Decarbonization Taskforce and the Trinidad & Tobago Manufacturer’s Association Productivity Committee, Dr. King has written on highpoints and errors that Trinidad made with its oil resources, a lesson he said this country could learn much from. Guyana has made a commitment to have a net zero carbon footprint by 2050 and the PPP/C government has said that while gas to power will come on stream, renewables are its ultimate investment focus for energy. It was from that piece that Dr. King expanded while sharing insight into how he believes this country can maximize the use of its resources from oil and gas.
Dr. King has chided Trinidad on its sloth in waking up to the potential benefits of renewable energy to a fossil-fuel based economy and the regulatory hurdles that prevented the uptake of something as simple as solar energy.
“Slowness to modernise has adversely affected the ease of doing business (Trinidad & Tobago is currently ranked 105 in the world) and hampers the competitiveness of non-energy sectors in the country,” Dr. King wrote. These points were echoed as he said that Guyana is in a better position to make positive decisions.
But as Guyana plans for the use of revenues from its oil and gas resources, Dr. King underscored that spending should always be done with transparency and accountability, through effective communication. “Outside of communication, there is a huge issue of transparency. And when there are rumours circulating about a historical track record in Guyana and across the region of less than transparent financial arrangements, you will find that is where people will say ‘we don’t necessarily trust those in power to manage this wealth in an equitable and corruption-free way’.
“So there has to be investment in national financial management and accountability and transparency, to mitigate issues of trust between the people and the government,” he said. And while poverty alleviation mechanisms are put in place, he cautions against wanton spending. “There is quite a lot of poverty in Guyana and I fully understand the challenge. Government has to look at it from the point of view of requiring a lot of vision and communication to the people,” he posited.
Mercedes Benz
“When you get income, what you normally have, if you are prudent, is not to go out and buy an expensive Mercedes Benz. You will say to your family, ‘I will buy a Toyota Corolla and put this away for the children’s education, do some repairs on my house and put some away for my pension. It is in the same way you expect the government of the country to think and relay their plans to the people. Household budgets needs to be well measured or you might end up into an economy where property prices go crazy and first time buyers and low income people cannot access property if domestic spending is too aggressive,” he reasoned.
He said that Guyana should also not get reliant on transfers and subsidies for wealth distribution, as did Trinidad and Tobago.
“Transfers and subsidies generally have a negative impact on economic growth and can produce undesirable consequences, suppressing innovation and entrepreneurship. Unsustainable expectations that these financial supports will remain indefinitely are, predictably, lodged firmly in the mind of the population and vigorous resistance arises when they are challenged,” he said.
And when it comes to spending oil revenues, it is where this country’s Natural Resource Fund management comes into play, as Dr King said that there has to be periodic assessments of how government balances its spending against the long-term plans of the country. Trinidad and Tobago has what it calls a Heritage and Stabilization Fund and King believes that while compared to Norway’s Sovereign Wealth Fund (SWF) it fails, it has provided the country with an economic buffer and as at 2021 totalled some US$5.7B.
“There has to be an innovative eco system which needs to be built in Trinidad and Tobago and in Guyana to ensure long-term stability. Norway built that so now their oil income is very negligible to their economy,” he said, noting that Guyana can take away many positives from Norway. Norway was also used as a benchmark for its investment in transparency and Dr King cited that as being one of the reasons they rate so high on transparency indexes and hardly have cases of corruption in public office. He nonetheless pointed out that the Caribbean region suffers from a setback since it has to start “from ground zero”. A cursory look at Guyana’s version of the SWF, Dr. King says it is better than the APNU+AFC model and “a really big plus is that there are well regulated rules around how much goes into the SWF”.
But he believes that accountability of spending from the NRF should be done separately as is the case in Trinidad. In Guyana, oil revenue is placed into the Consolidated Fund and there is no distinguishing how much goes to specific capital projects. Money spent on education must be investment into the nation’s educational system, and thus should be the main focus of human resource development. But he made clear that while the infrastructural aspects, such as the building of more schools may be seen as educational investment, it is investment in curricula that fosters critical thinking that is key. With experience teaching at the University of Guyana through a programme with UWI, Dr. King said that both countries prepare their youth for exams and not to think critically.
“Since the goal is to pass the exam, that is all they work towards,” he said. Help with restructuring the curriculum, he proposes, should not be done entirely by locals. “I don’t think we can rely on local capability for that, but local teachers have to be full in. It is difficult to change a system from within a system. You need the outside thoughts to break the habits,” he said, noting that investments must be heavy into educational transformational programmes.
European countries that do not use, for example, examinations such as Guyana’s Common Entrance and T&T’s Secondary Entrance Assessment, according to King, see more innovators. And like Trinidad, at the tertiary level, investments in scholarship programmes, is necessary to train a cadre of students for work in areas that research shows will be needed in the future. He noted that Trinidad made investments in free local tertiary education in some areas “complemented by a generous system of scholarships for international study”.
“Specialist programmes such as the Petroleum Geoscience programme at the University of the West Indies have provided technically qualified, local leaders in the energy sector. Skills training through the National Energy Skills Council has served to establish a broad base of certified technicians. Well over 90 percent of professionals in the sector are nationals or residents. Trinbagonian energy professionals operate in companies around the world. Expertise has been built over time and opens the opportunity for Trinidad & Tobago to transition towards having a knowledge-based energy sector.”
Guyana can, though partnership agreements tap into help from her sister CARICOM country for help with programmes in this regard, he posited.
“UG has engineering programmes and strengthening those through collaboration should be important. If you are talking about the oil and gas sector and building technical capability, the link with Trinidad could be very strong. We already have established programmes. We have a world class asset management programme and that is key to understanding maintenance of the infrastructure. It can be run in conjunction with UG,” he said while listing other programmes.
“Partnership is key to allow UG and other institutions to step up. All of those UWI courses are accredited by UK”, he noted. And once completed, King said that persons trained and certified in Trinidad can use those certifications in the United Kingdom and the same could be for this country if it invests in those areas. Tapping into the skillsets and resources of its diaspora and other countries as it invests heavily on research and development is integral to Guyana achieving its planned sustainable path.
“You are creating Research and Development centres where you bring Guyanese in the diaspora back with all that wealth of knowledge they would have acquired. To do that you have to identify and pick growth areas that you want as a country and to jump into”, he said.
Dr. King added that while he is no expert on governance, Guyana can learn a lot as it analyzes countries that have done well with oil resources and those that have failed, or, are failing.
