If Guyana wants to avoid the oil curse, some industry stakeholders have said that it should look to Norway and the numerous mechanisms it employed to be successful such as the creation of two sovereign wealth funds that today, hold more than US$1 trillion in assets.
But a copycat approach does not mean the success would be the same for Guyana. In the eyes of Lars Mangal, Chairman of TOTALTEC Lars Mangal, Guyana needs to have a mechanism in place that is not only suited for its circumstances, but would also ensure a portion of the oil money goes back to Guyanese for the purpose of house building, education or health.
Mangal made these and other views known during an interview with www.petroleumworld.com. The businessman fielded several questions, one of which focused on the “Norway model” and whether it was best suited for Guyana.
Mangal said that Norway is an example, but it is not the model. The businessman said, “Norway was a poor country with farmers and fishermen. The transformation did not only happen because of oil, but also because of good governance, democracy, government support for science, the obligation to use local labor and materials and the knowledge transfer to indigenous Norwegian enterprise. That is why there are so many Norwegians in the oil business today.”
Further to this, the Chairman and Founder of TOTALTEC was keen to note that the foregoing approach by Norway had nothing to do with the creation of an oil fund. That he reminded, was created 20 years after oil was discovered. Further to this, the businessman who has 35 years of experience in the oil industry stressed that an oil fund is no guarantee that the interest of citizens would come first and that they would benefit the most.
Mangal reminded too that in countries such as Angola and Malaysia, observers have found that the establishment of an oil fund allowed for the nation’s revenues to be looted by the president’s son and daughter or by politicians, and partly with the help of international banks too.
So what exactly could work for Guyana? For Mangal, the local authorities should focus on creating a household fund in which every Guyanese is a stakeholder. That fund he said, should receive 60-70% of the oil revenues. Expounding further, he said that each citizen can draw a certain amount of funds for house building, education or health. “That way, everyone can decide for themselves whether they want to build a house, utilize private health insurance and or send their children to private schools. This stimulates the construction sector and positive, constructive competition between the state and the private sector,” the businessman stated.
He also noted that it would really be a step towards modernization and poverty reduction, thereby lifting every Guyanese household out of poverty within a decade.
