Much has been written in the Guyana media about the need for oil specialists and experts and there are critiques in KN that the person trained in the oil industry is not appointed as the line minister (Energy). Be that as it may, and not to detract from one’s formal training in an industry, one does not necessarily have to be skilled in the subject in order to become its line minister although it would be ideal to have someone in the position that is competent and educated or at least has some experience in the field. Studying a subject does not necessarily make one an expert. Experience would help.
In my economics studies and readings on OPEC and on energy, most of the energy or oil ministers of Mexico, Venezuela, Trinidad, India, Indonesia, Russia, Nigeria, Malaysia, Argentina, Brazil, and Arab oil producing countries are not skilled in oil or gas industry. Some don’t even have college education. They are political hawks. The experts behind the scene run the ministry as I learn from my in-depth study of developing economies. Ministers learn by doing and are assisted by experts.
When I was doing my MA degree in Economics at City College of City University in early 1980s, a required course was Developmental Economics. Prof. Edwin Reubens required a research paper (plus presentation and exams off course). He advised I research the role of Mexico’s oil industry in national development. Later, I did studies on oil production in Argentina and Brazil and their role in development. From my studies, there was hardly any recognized oil specialist who headed the Mexican Ministry. The technical specialists and the oil economists ran the day-to-day operations of the various divisions of the Ministry. (There were a lot of allegations of corruption under the Presidencies of Luis Echeverria and Lopez Portillo that I examined. Prof Reuben suggested that the paper be published on the so-called oil curse).
The issue in Guyana’s budding oil industry is a total lack of expertise in oil (the technical aspects of exploration and recovery) and even in oil economics to manage it and where to invest revenues. Oil specialist is a reference to someone who has some competence in the oil industry. Guyanese economists did not even study oil economics. Specialists acquire expertise or competence from formal (university) or informal education (reading books), experience working in the area, or from education by experts in the field. In general, the oil industry comprises of the technical specialists or engineers, environmentalists, and oil economists who study pricing and advice on production to maximize revenues. To say there is a paucity of them in Guyana is an understatement.
The country should seek the expertise of the diaspora; several Guyanese work in the oil industry in North America and would be gladly willing to lend a hand if the government were to ask. The government can also source the assistance of Norway or UK or India to streamline the oil ministry. The country (University of Guyana or another tertiary institution) should consider offering training in the technical aspect of oil exploration and recovery as well as oil economics, which should now be introduced as a required subject in secondary school.
Oil is among a few commodities that doesn’t always follow the law of demand and supply that we study in basic economics. It is a very complex and highly specialized branch of economics. There are no experts in Guyana and few if any Guyanese in the diaspora specializes in oil economics. When I did doctoral studies in economics, there were no courses on oil – now, oil economics is a critical part of the field.
To become more familiar with the oil industry and oil economics (pricing, in particular), I would advise the Energy or Natural Resource Minister and advisors or bureaucrats to read the daily New York Times (Business Section in particular), Washington Post, Wall Street Journal, Financial Times, and the weekly Economist, among others. Other news and magazine publications are also useful and some focus exclusively on oil and gas. These would help to boost one’s knowledge about oil, providing so much information and updates on the oil industry.
The oil industry has changed very significantly from the time I studied it in the 1980s. Today, there is greater focus on production or manipulation of oil price, issues about carbon emissions, green house gases, and climate change, and concerns about oil pollution. The government would be wise to seek the assistance of non-traditional economists familiar with oil industry and the technical experts.
Yours truly
Dr. Vishnu Bisram