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Can Caricom get it right this time?

Sunday, May 6, 2018

Does Caricom have another chance at sustainable economic development lurking up ahead? It is the question I asked myself on reading an assessment of the quantities of oil and gas in the Guyana-Suriname Basin.

According to the estimates carried in the World Oil magazine (June 2017), the basin, said to be the second largest prospect for oil and gas on or near the continent (South America), holds 13.6 billion barrels of oil, 21.2Tcf of natural gas, and 574 MMbbl of NGLs.

To get an appreciation of the 13.6 billion is to compare it to the approximately three billion barrels of oil taken out of T&T’s land and offshore wells since the 1970s. However, as a gas province, the present basin projection is of a lesser quantity when compared to the 30Tcf of Trinidad and Tobago’s peak—Proved, Probable and Possible.

Nonetheless, the 21.2 Tcf is of great import.

What’s more, there is likely to be increased exploration of the continental shelf of Guyana, Suriname and French Guyana (Cayenne) and the possibility of even other finds of oil and gas.

Exxon Mobil, along with partners Hess and CNOOC’s Nexen and Repsol, are amongst the multi-national corporations that are exploring in the basin; those companies will only invest the hundreds of millions needed for exploration if the prospects are beyond being “good.”

Both Guyana and Suriname are Caricom member states on the continent with a Caribbean orientation—notwithstanding that former president Cheddi Jagan talked about a South American future for Guyana.

Therefore, there must be a legitimate expectation that there can be regional development initiatives deriving from the energy rush in the two South American based Caricom member states.

The issue for Guyana and Suriname is whether they are going to be overcome by the Dutch Disease, an infliction which affects poor developing countries that suddenly come into a windfall of dollars.

Alternatively, can the two Caricom member states utilise the resources for regional development purposes beyond a fast-foods-type consumption of the rents collected from taking the oil and gas out of the ground?

During the first oil boom experienced by Trinidad and Tobago, then prime minister of Jamaica Michael Manley said that our oil dollars were washing through our system with the same effect of a dose of Epsom salts. Needless to say, we were angry with him for making such an observation.

After no fewer than three booms in oil and gas prices and the collection of the yet-to-be accurately calculated US billions in revenue, T&T remains an undeveloped, one-stream economy dependent on high energy prices, and experiencing today a frightening free fall of its foreign reserves.

Reaching back to the 1960s/70s the possibility of regional economic development was raised by the economic and developmental thinkers of the time—Demas, Girvan, Best, McIntyre, Ramphal and others. The wisdom of the day was to combine the raw material resources of the region, then bauxite (Jamaica, Guyana and Suriname) and energy in T&T to produce finished products.

So too was the advocacy for the utilisation of available agricultural lands of Guyana, the workforce in the Eastern Caribbean and the expertise of the Faculty of Agriculture here at UWI, St Augustine, to feed ourselves and break the historical pattern of foreign appetites.

Through a couple generations of governments, regional technocrats, and the regional private sector, the hope for regional industrial programming, investment in services across the region and the free movement of the factors of production, labour, people, capital etc the region has made little progress.

Recently Caricom Secretary General Irwin La Rocque acknowledged that the 30-year old Caricom Single Market and Economy “to be a work in progress”, nice diplomatic language for serious underachievement.

Understandably, however, the governments of Guyana and Suriname have to service immediate needs for physical and human development. The question is how to meet those needs?

To be continued.


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