Jamaican economist and University of the West Indies lecturer Dr Damien King forecasts doom for Guyana as he believes it would fall victim to the resource curse because it lacks strong institutions to prevent corruption.
“You mark my words, Guyana is going to go nowhere,” the Jamaica Observer quoted King as saying in an interview. According to the newspaper, he said the oil revenues could cause corruption to increase in the country and make it worse off than it was before accessing the wealth.
Noting that over US$1 billion had been collected to date by this country, King was reported as saying that he was still convinced that political parties would soon start to squabble over the spoils to the detriment of the country.
President Irfaan Ali has said that his administration was committed to the transparent spending of Guyana’s oil revenue and ensuring that proceeds goes to the people and holistic development.
However, King said that Guyana has not yet developed strong systems to insulate it from corruption and until those were in place, the country was susceptible to remaining a third world country as history shows that few countries have been able to withstand the pressures.
“It’s worth bearing in mind that very few countries in the world have grown from poverty to wealth, having done so on the basis of natural resources. Very, very few,” the Observer quoted King as saying, even as he underscored that other oil-rich countries had failed: “Venezuela is a basket case and Nigeria is a joke.”
According to the Observer, the UWI, Mona Campus Economics lecturer said, “One of the reasons why there is this thing called a resource curse, why countries which have resources tend to do worse, is because not having resources forces a country to have good governance, because that’s the only way the government and the elite can extract wealth. For them to extract wealth to run the government, they have to create a wealth-creating environment.” The article noted that he used resource-poor Singapore and Switzerland as examples of countries which have become wealthy through good governance.
The Observer said that King pointed out that his position was “not even a radical view amongst political economists.”
According to the newspaper, King said, “The only way that the government will have resources to function is to have an environment that creates the resources. When you have natural resources you don’t have to do that. [With natural resources] the government then only becomes an institution to fight over the resources and extract it. And unless you have strong institutions to begin with, to put a constraint on the fight for spoils, it descends into corruption and violence because the spoils are so lucrative; it’s worth killing people to get into power. That’s what’s going to happen to Guyana, because Guyana already has weak institutions.”