Introduction
Last week’s column established that the mechanism of ring-fencing for determining recoverable cost is not, unambiguously, to Guyana’s benefit. While the chances of being of benefit are reasonable, there is no way now to establish this definitively. There is insufficient information available for anything better than informed guessing. The best advice that could be given to the authorities therefore, is to view ring-fencing as a policy trade-off. In the literature, this has been phrased: Resource Revenue Timing: Now or Later.
Introducing the notion of policy trade-offs allows me to introduce also, the four key policy trade-offs that are identified in the Natural Resources Charter. I believe this Charter constitutes the most thoughtful advice on natural resources policy formulation for application in Guyana-type economies: poor, small, open, and with dominant extractive export industries.