INVESTMENT OF OIL RESERVES IN SOCIAL AND ECONOMIC ...

It would result in the syndrome of dependency and entitlement, which is unsustainable since when oil prices fall or reserves become depleted, the population would be plunged into deeper distress than had existed before the oil boom.

The other technique is to use the revenues as developmental capital for the social and economic sectors and the Government, following the examples of developed countries such as Norway and Britain, has established a Natural Resources Fund wherein the revenues are deposited. Part of the revenues is reserved for the use of posterity. Part is devoted to economic development, part to social development, and the smallest part to cash transfers to specifics.

The spending on economic development would include large investments in agriculture to upgrade present agricultural industries and introduce new ones such as upgrading livestock, fish, and new crops such as wheat, millet, corn, and soya. The stimulation of industrial development will be ushered in with cheap electricity by the Gas to Shore pipeline and agro-industrial products. The investment in the Gas to Shore project is US$ 1 billion. Together with this laying the foundations of agricultural and industrial revolutions, the ports are being developed and a network of roads and bridges is ensuring the connectivity of every part of the country. Hundreds of millions of US dollars are being invested by local and international hotel chains to construct world-class hotels and more international airlines have started coming to Guyana.

Social spending on health, education, housing, pensions, and salaries has entailed hundreds of billions of Guyana dollars. New and modern-equipped hospitals and schools are being built in various parts of the country and pensions and salaries are gradually being increased. Thousands of scholarships in the Arts and Sciences at various foreign institutions have been distributed and efforts are being made to strengthen and increase the training of scientists in various fields, including oil.

The smallest portion of the spending from the fund is allocated to cash grants, including cash and uniform grants to every school child; school feeding; textbooks; and one-off grants to pensioners and fishermen to help them repair and re-equip their boats and return to gainful employment.

It is estimated that poverty will have declined by six percent this year and would be doing so in faster progression in the coming years and in four years, the country will be approaching the first world standards in social services. Though there would not be money to indulge in aimless splurges, the citizens’ disposable incomes would keep increasing. This methodology of deploying the oil revenues would ensure Guyana avoids the Dutch Disease and secure