United States Ambassador Sarah-Ann Lynch has said that the potential for corruption and need for inclusion are key challenges for Guyana as it navigates its oil wealth.
She made the point in a recent interview with Plaza Central host Benjamin Gedan of the Wilson Center in Washington DC.
Speaking on the topic ‘Guyana’s Oil Rush’, the US Ambassador highlighted that the country’s expected oil wealth has the potential to provide a historic transformation for its people but it will need strong systems to ensure this.
The US government, she says, continues to work with Guyana to help it take advantage of its rich oil endowment, while controlling corruption, strengthening democratic institutions and maintaining political and social stability, among measures to avoid a resource curse here.
“We work primarily in the areas of governance, economic development and security. Governance, as you mentioned is key to its success. And as such, we work with Guyana to improve transparency and accountability. We’ve provided assistance from the US Treasury to the Guyana Revenue Authority to help them audit large contracts and improve their human resourcing efforts. We’ve also worked through USAID to help Guyana become a member of EITI – Extractive Industries Transparency Initiative. We’re encouraging them to join the Egmont group, which is an internationally recognized group that focuses on money laundering,” Lynch stated.
From oil resources and its spinoffs, she “expects this transformation in Guyana to be absolutely historic” as it is currently “just an incredible time here.”
Giving an overview of the “unprecedented and historic” oil development in Guyana, the American Ambassador noted that just seven years after the discovery of oil, operations today see floating production offshore vessels (FPSOs) that pump over 380,000 barrels a day. Singled out too was the fact that ExxonMobil has made over 30 oil discoveries during this period of time.
“So with 11 billion barrels of oil reserves that makes Guyana or could make Guyana have the highest oil reserves per capita in the world. Currently, Kuwait has that role, but Guyana may soon surpass that. And at this point, this year alone, Guyana grew at almost 60 per cent this year. This is per the IMF recent report, which is just staggering growth for such a small nation. And they could continue to grow according to the IMF at about 30 per cent for the next several years.”
Lynch reasoned that as long as Guyana diversifies its economy and continues to invest in its infrastructure, key institutions, and most importantly its people, she believes the transformation will be “incredible and its future very bright.”
Key challenges
However, she repeated a position she has consistently taken, that key to the successful future of this country was ensuring there is no resource curse, thus avoiding its effects, such as poor economic performance, growth collapses, high levels of corruption, ineffective governance , inequality, political violence, and lack of inclusion.
And while efforts for overall growth and protection of the environment made by government were highlighted along with positive economic statistics, the Ambassador also noted that this country already faces two key challenges.
“There are many challenges and two key ones are inclusion and the potential for corruption. As you mentioned, in many countries across the globe that have gone from, you know abject poverty if you will, to incredible wealth almost overnight, it’s tough to do it well. So they really are going to have to keep their eye on the ball,” she said, at the same time pointing out that there are many positive models to follow.
She continued, “It is an ethnically divided society, and so they will need to focus on inclusion. And they’ve been [making] many efforts to do so [thus] far, but they will need to continue to do that and at an increased pace.”
It was noted that government has provided “lots of growth grants” to marginalised groups affected by COVID- 19, flooding, and the overall downturn in the global economy.
Nonetheless, she believes that government needs to do more and with sustainable outcomes. “But those short term grants don’t mean long term sustainability. So we’re encouraging them to focus on efforts that will create a sustainable growth for the entire country, no matter ethnicity, no matter race, no matter gender, and no matter geography, because there’s a bit of a rural/urban divide here too. We are encouraging them to make sure that the Indigenous communities for example, in the hinterland areas in rural Guyana can also benefit. So inclusion is very important.”
“And then you know, when all this money is coming into the country, there are certainly potentially bad actors looking at possibilities here, as well as the many friendly nations and reputable firms so they will need to put legislation in place and also enforce certain things. So they enforce that legislation to prevent corruption,” she added.
Necessary steps
Guyana’s Attorney General Anil Nandlall SC says that government has listened to the US and is acting on the advice given.
As it pertains to joining the Egmont Group, a united body of 166 Financial Intelligence Units (FIUs) that is the operational arm of the international AML/CFT apparatus, Nandlall said that this country will join but that changes to legislation are needed to allow for acceptance into the membership.
“To join the Egmont Group, we needed to amend the AML/CFT Act. We did so by way of the AML/CFT Bill of 2022. That Bill was laid in the Parliament, debated, and passed, I believe, during the month of August before parliament went into recess. The FIU is taking the necessary steps to join Guyana into that grouping. It was one of our outstanding obligations and we have fulfilled that.”
PPP/C governments have been discussing joining the Egmont Group as far back as 2011.
Nandlall added that there have also been continuous works, training, and engagements between Guyana and US counterpart agencies to help strengthen this country’s agencies. The Chambers of the Director of Public Prosecutions, the Special Organised Crime Unit, the FIU, the Guyana Gold Board, the Guyana Revenue Authority, the Customs Anti-Narcotic Unit (CANU), and the Guyana Police Force were listed as agencies that benefitted from inter-country training.
Nandlall also informed that he will be leading a contingent from this country that includes the Central Bank Governor and representatives from CANU, GPF, FIU, to represent Guyana at the CFATF 55th Plenary and Working Group Meetings, being held in the Cayman Islands from the 27th November to the 1st December.
“All of these engagements explicate as a demonstration of our commitment to ensure that the rule of law is upheld in Guyana and that our detective and investigative capabilities are constantly reviewed and improved to combat all forms of criminal activities,” he said.
Guyana is scheduled to undergo an evaluation process next year and the Attorney General says that representatives here will be meeting with CFATF “to ensure we are compliant with all of our outstanding obligations.”
