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Guyana, an unprepared “oil-producing country”, is heading towards chaos
Nigel Hughes, Solicitor
…lack of capacity will lead to foreigners reshaping the country – Nigel Hughes
Kaieteur News – Due to lack of planning and capacity building, Guyana is heading towards a path of chaos that will not only lead to a permanent class of poor people but also to an increase in foreign labour and its attendant impacts.
These were the views raised by renowned lawyer Nigel Hughes, who was a guest at a live online panel discussion.
Hughes made his point by noting that Guyana “has just completed five years of oil production and if you look at the next five years of oil revenues and the requirements that the oil industry will put on the system, Guyana is simply not going to be able to meet that demand.”
He further stated, “…we haven’t started asking the government to come up with a plan for what to do with this revenue throughout the economy, and we’re going to be in chaos; we’re going to be like a kid with money in a candy store, and we’re going to end up dying of diabetes.”
He said this because currently “… we simply don’t have any plan to manage the economy in its entirety; we don’t have the capacity; do you know what it’s like to put money into a system that you don’t have the capacity for, that’s dependent on oil revenues?”
What this means, Hughes believes, is that the country as a whole will face the fact that in the next five years, the foreign workforce in Guyana will outnumber the local workforce, and the country will have to deal with the consequences of that, “because when the foreign workforce comes here to have children and so on, the Guyana you think of today will be unrecognizable.”
Hughes insisted his stance was not “anti-progress,” saying: “I mean, we haven’t planned at all; none of us can handle the problems we have now, we have no plan for how much money we are going to invest to protect ourselves, how much money we are going to put into infrastructure, how much money we are going to put into education, how to protect our investments; and this is before we get more oil from the big producers, so we have some real major problems.”
“The most important and fundamental factor that will determine our future is education, so let us agree on the best model for education that delivers the best quality education across the board, including ensuring those who are less financially well-off have access to the means to truly learn,” Hughes said.
Guyana is expected to become one of the world’s largest oil and gas producers within a decade, but despite growth opportunities, the accelerated expansion of related operations has exposed a stark gap between the industry’s labour needs and the availability of skilled local workers, the International Labour Organization (ILO) said in a 2022 study.
Furthermore, the ILO said the challenges facing the local oil and gas industry are exacerbated by systemic local weaknesses, including a limited workforce (number of employees), significant gender gaps (particularly in terms of workforce participation), and global competition for talent within and across industries, particularly commensurate with digital transformation or the replacement of retiring professionals.
The ILO also said that policies to address current and future gaps could include — as countries in similar situations currently choose to address — strategies to manage migration and skills development for a specialized workforce to cope with the demands of oil and gas and, possibly, green transitions.
The findings also show that, relatively speaking, the main occupational types in demand within the oil and gas value chain over the next five years appear to be “Engineering Professionals” (accounting for 15% of the answers to the most in-demand occupational questions), “Risk (Environmental and Occupational Health and Hygiene) Management Professionals” (11%), “Shipboard” Deck Crew and Related Workers” (10%), and then, in descending order, “Financial Professionals”, “Mining and Construction Workers”, “Physical and Engineering Science Technicians”, “Sheet Metal and Structural Workers”, “Mold Makers and Welders” and “Mineral Processing Plant Operators”.
Vice President Bharrat Jagdeo, in his recent weekly press briefing, noted that the People’s Progressive Party/Civic (PPP/C) has strengthened the institutional architecture of the country’s booming oil industry to ensure accountability and transparency since 2020. For example, he said the government enacted the Local Content Bill in 2021, which has allowed thousands of Guyanese to participate in the industry through employment and business opportunities.
In addition, the Natural Resources Fund (NRF) was updated and a series of reforms were enacted to strengthen the regulatory infrastructure of the oil and gas industry. In addition, the Petroleum Activities Act, 1986 was updated and in 2023, the Ministry of Natural Resources held an auction for the remaining petroleum blocks offshore Guyana, eliminating the first-come, first-served model and providing a fair opportunity for other investors.
“Any independent observer knows that over the last four years we have modernized almost the entire framework of the oil and gas industry. We have addressed all the major issues in the industry.” The General Secretary boasted.
He said this was in stark contrast to what happened under the Coalition government, which kept these deals and agreements hidden from public view for years. “No minister in the government has ever answered any questions about the oil and gas industry. That is their legacy. The PPP is back in power and we are very proud of what we have achieved in the industry in the four years since we came to power,” Dr. Jagdeo cautioned.
Jagdeo also criticised the opposition and sections of the media for their lack of depth in formulating constructive policies on the management of the oil sector, arguing that they were doing so to divert attention from the government’s success in managing the oil sector.
“We will not be led by anyone in this fictional world, the APNU can do that. They can go into a fictional world and think they are solving serious problems, but we are solving serious problems,” He emphasized.
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