Guyana, a South American country that is slightly less in size than Idaho, has just hit the motherload. Not of gold, but of liquid gold. That is to say: oil. Guyana has struck oil. According to the CIA, Guyana has been an independent country since 1966 and has been ruled by a socialist regime.
An article by the New York Times focuses on the economic aspects that will benefit Guyana, whereas the article by Forbes focuses on prosperity and growth of Exxon and Hess. The New York Times expresses the idea that Guyana’s oil will potentially help the country prosper. The Forbes article highlights an important aspect, but does not explain what the growth of Exxon and Hess will mean for both the companies and the country. Both articles seem to highlight the issues, but focus on one possible impact rather than look at the bigger picture, and the many possibilities.
The new oil that has been found will help the companies that have been hurt by the sanctions placed on Russia. Trump has said that he would be willing to work with Russia [and China] if they were to cooperate with the US. According to the BBC, “Mr Trump told the Wall Street Journal that newly-imposed sanctions on Russia would remain ‘at least for a period of time’ but could then be lifted.” The purpose of the sanctions which were placed on Russia under President Obama were to serve as a punishment for the alleged hacking of the election. To be perfectly clear, Russia did not, in any way, shape, or form hack the election on November 8th 2016. All of the ballot systems are offline. What the United States claims that Russia did is influence the results of the election.
By placing the sanctions on Russia the United States hurt it’s own country’s private oil businesses. The New York Times reports that, “With Exxon Mobil’s global fields aging and its new interests in Russia frozen by United States sanctions, the discoveries in Guyana have the potential to add significant reserves to the company’s holdings.” The sanctions have led to US based businesses finding alternative sites to drill for oil, which will inadvertently affect the consumer.
Guyana, on the other hand, is preparing itself for a new industry that has the possibility of generating a lot of revenue for the small country, but while also trying to avoid conflict. According to the San Diego Union Tribune, “Guyana only has to look at Venezuela next door to see what can go haywire with an oil-dependent state. South America's biggest energy producer has been in economic freefall since the 2014 crash in prices for the oil that funds nearly all the spending of its socialist government.” Venezuela, and many other countries like it, claim that socialism is better, and that it helps, but Venezuela depicts a government that grew too large and as a consequence the government hurt their own people. Despite the warning that Venezuela provides for the Guyanese, the presidential spokesman, Mark Archer, remains hopeful and states that “the plan is not to spend wildly like a drunken sailor but to put in a wealth fund for future generations and ensure we do not neglect agriculture.” That sounds nice, doesn’t it? Save money for future generations, so that their lives will be improved upon. Except that, only the socialist government would be in control of the wealth. For critics of capitalism, please explain how the government holding the wealth would be better? The world has only seen the failures of socialism, and it is doubtful that socialism has ever benefited anyone, other than those in positions of power.
It will be interesting to see how the socialist government will react to the sudden and expansive influx of cash. I predict that they will have unforeseen circumstances, and that they will be forced to spend more money than they thought they would, however, with any large government that seems to be the case.
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