FROM NATURAL RESOURCES TO HUMAN RESOURCES
August 9, 2014, By KNews, Filed Under Features/Columnists, Peeping Tom, Source - Kaieteur News
The Trinidadians used to boast that oil don’t spoil. Burnham retorted that you cannot eat oil. You cannot also eat bauxite, gold, diamonds or timber. Guyana had a lot of these. It still however remained underdeveloped.
In fact, it was a source of bewilderment for nationals of the Caribbean that Guyana was so endowed with natural resources – rice, bauxite, gold, timber, diamonds, sugar – and still remained poor. The problem, it was concluded, was the management of the country which failed to exploit these resources for the benefit of the country and its people. But that is putting it too simplistically.
Guyanese always have this idea that Guyana is a nation blessed with an abundance of natural resources. The value of our natural resources however is not intrinsic; it depends on what we do with it and how competitive these resources are in relation to similar resources held by others.
Guyana, for example, has always had high grade bauxite. But because of the depths at which the ore is to be found, that bauxite remained uncompetitive when compared to other countries such as China and Russia. Ironically, it is the expansion of the economies of Russia and China that has led to increased interest in Guyana’s bauxite.
Guyana has always held vast reserves and varieties of timber. Theoretically, that should have made Guyana a very rich nation. But it has not. The cost of extracting timber from our forests is prohibitively high. This has impacted negatively on the cost of production.
Sugar is produced in Guyana, but the cost of planting sugar on flat, poorly drained lands increases the cost of production. The social costs that the plantations and estates have had to bear also hurt the competitiveness of the industry and meant that Guyana was never able to compete in international markets outside of preferential access and prices. Securing that long-term access, however, meant taking a cut in price, an arrangement which has now been abandoned, leaving Guyana’s sugar at the mercy of market forces.
Gold prices rose a few years ago. Guyana enjoyed a boom. This is a highly speculative industry that even in times of high prices can either make you or break you. As such, gold mining has enriched only a lucky few. The masses of the people of Guyana have not benefitted from the hundreds of millions of ounces of gold dug out of the intestines of the country over the centuries.
The idea therefore that Guyana has a great deal of natural resources means very little, unless a way can be found to allow these resources to be exploited competitively and for the benefit of our people. It is easy to blame the government for the fact that Guyana with all its natural resources remains a developing country. The fact, however, is that having resources means little unless those resources can be gainfully and competitively exploited. And exploiting resources means little unless the people of the country benefit, rather than a handful of local capitalists and foreign multinationals.
In the late 1980s Omai Gold Mines was launched. It mined out one of the richest mines in South America. The then government gave massive concessions to that company, because it felt the company would have created jobs for its supporters in Linden. It levied a pittance in royalties and anticipated that the company would pay a deluge of corporate taxes into the Treasury.
What is the record of OMAI and how much richer is Guyana because of that investment? Omai never declared a profit in all its years in Guyana. That meant no corporate taxes. And less than two thousand jobs were created. Royalties were paid, but it was as a result of that company that the worst-ever environmental disaster in the history of the English-speaking Caribbean took place. So what did Guyana really end up with after all that gold was mined?
Barama also came. They set up a plywood factory. Then the Asian crisis hit and the company was forced to scale back production. They restarted operations years later, only to have a problem with a major piece of machinery. That problem triggered the sending home of hundreds of workers. The government had to use taxpayers’ monies to intervene to help support those workers in acquiring training so to gain other jobs.
There were foreign multinational companies operating in our bauxite industry under Desmond Hoyte. By the time they left, the bauxite industry was bankrupted and millions of tons in ore had been exported.
These are examples of the lack of benefits that have resulted from the exploitation of our natural resources. They exemplify the resource curse.
Compare the example of these companies with another foreign multinational that has set up shop in Guyana. Today that company is perhaps the largest private employer in Guyana. That company is called Qualfon. It is a Mexican company and it employs thousands of persons, mainly young people. At present it is advertising for a few hundred more jobs. That company is not extracting our natural resources. It is utilizing another resource, our human resources and particularly the brainpower of Guyanese. Thousands of young Guyanese are taking home a decent pay package every week because of this company.
This brings us to the real question. What should we be emphasizing? Should we be emphasizing a knowledge-based economy or a natural resource-based economy? This will be a discourse that will be picked up tomorrow.
Source -- http://www.kaieteurnewsonline....-to-human-resources/