Oct 17, 2019 News
As Guyana embarks on production of first oil early 2020, the debates continue on what is to be done with revenue produced from its nascent oil sector.
Over the past weeks, Kaieteur News and other media house would have reported on the many statements and debates made by the national leaders about how Guyana should invest or spend its oil wealth.
Some contend that the government should use some of the revenue its gains from the oil sector for “cash transfers” to poor households.
It was later reported, after a recent press conference held by the Minister of Foreign Affairs Karen Cummings, that her President prefers that it is better to invest it in human capacity or education and improve services that will be beneficial to Guyana.
Recently, according to the Prime Minister Moses Nagamootoo in his weekly column titled, “My Turn”, it was suggested that Guyana’s “Oil Money” should be invested in the Agricultural Sector. This, he says, will be a wise investment since it will ensure that Guyana stays wealthy long after oil production is ended.
Head of the Environmental protection Agency Vincent Adams, stated on Monday night as a guest of the National Communications Network (NCN) television programme “Environment Matters” that agriculture should be the future of Guyana’s Oil.
He explained that oil is not an unlimited resource thus the need to use oil revenues to make a heavy investment in the Agricultural Sector of Guyana.
According to some commentators, these statements are vague and leave the question unanswered as to how the oil money will really be invested. “If it is to be invested in Agriculture, how are they going to do it? What strategies or mechanisms will they put in place?” they asked.
Kaieteur News had reported that according to Trinidadian Geologist, Anthony Paul, Guyana’s oil wells are likely to last only for 25 years. This implies that there is little time for Guyana to decide what it really wants to do with the little oil revenue it will gain from the industry.
In an interview with Kaieteur News on Tuesday, Attorney-at-law Charles Ramson, was willing to share his comments on what he thinks is a wise investment.
Ramson said that if money is to be invested in the agricultural sector, it needs to be invested in crops that are exportable and profitable.
Currently, he says, according to statistics, Guyana’s most successful crop has been rice and still is, apart from its newly found oil industry.
He also highlighted that in order for agricultural crops to be successful on the export market it needs to be produced and sold at a competitive price to attract clients.
In terms of rice, he explained if money is to be invested in the sector to increase production, it would have to be the element of moving the commodity into a value added type of product. He further added, that to do this, lots of energy is required.
The attorney-at-law said if we are to achieve these goals, the current cost of energy in Guyana needs to be reduced.
When asked to explain why?
He responded that currently Guyana pays US25cents per kilowatt hour of energy which is much higher when compared to developed countries that pays US2cents to US10 cents per kilowatt hour.
Ramson went on to say that in order to boost Guyana’s agricultural sector, industrialisation will be needed.
“And industrialisation will require a lot of energy,” he said.
“If energy is expensive, then the cost of production will be expensive as well.”
He further explained that if production is high then most likely, we will have to export our goods at a higher price which will be bad for the competition.
“If we can reduce the cost of energy, then the production cost will be much lower thus influencing higher profits and competitive export prices on the world market.”
As he concluded the interview, he iterated that Oil money should be invested wisely in addressing more important issues such Guyana’s energy problem. This, he says, will not only benefit local industries in gaining better profits but also citizens since their electricity bill will be much cheaper.
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