Schrodinger’s oil fund
It’s not unusual to see Guardianistas and the like bemoaining the fact that Britain spent the oil money. If only we’d saved it all like Norway we’d have a huge wealth fund! Not that we would of course, oil was a smaller part of the British economy and there’s absolutely no evidence at all that any British government, ever, would be able to keep its hands off a pot to spend. But there we are, it’s a common enough claim.
Guyana also has new found oil wealth. Compared to the base size of the economy it’s also hugely greater than Norway’s endowment. So, they’re sticking the money in a sovereign wealth fund as they should. If they don’t they’ll drive the local currency up to such dizzy heights that there will be no local economy other than oil - Dutch Disease on steroids.
So, be like Norway, save the oil money.
Guyana found huge oil reserves 10 years ago, so why are most people still poor?
Bert Wilkinson in Georgetown, Guyana
With a ‘one-sided’ deal handing vast profits to the world’s top oil firms, many Guyanese ask when the energy bonanza will benefit them
The actual deal itself - a 50/50 split after costs are recovered - doesn’t seem too bad. Especially for the first field in an unproven province. But the complaint is that the rivers of cash aren’t just being given to folk:
“The government has built roads and improved the infrastructure, but it needs to do much more,” says Singh. “I have a heart condition and can’t do heavy work, so more money should come to help people like me.
“People must live comfortably now that we have big oil money but it is clearly not happening yet. The big boys are looking after themselves too much.”
Which is interesting, isn’t it? That ability of the Guardian-mind to contain a duality. Even, a Schrodinger’s oil fund. The cash should be spent now on the people but also saved for the future.
Tim Worstall