THE NEW OLIGARCHS

Jul 04, 2010 Features / Columnists, Peeping Tom

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There is a new elite in town. Especially over the past six years, they have cemented themselves as the most powerful elements of the economic class in Guyana.
They are parceling out large segments of Guyana’s economy for themselves. By the time they are finished with their expansion they may end up owning most of the country. They are enriching themselves by venturing into new areas of business and economic activity and they are amassing fortunes which dwarf the wealth of traditional family-based economic elites who are themselves facing extinction from this small band of capitalists.
The old oligarchy is now under threat. In the past they survived by aligning themselves with the political elite. For years under the PNC, there was a small but powerful economic elite that made a great deal of money while the then ruling party professed that it was socialist. While the masses were lining up for food, this small but stinking rich traditional economic elite was making a great deal of money, a great deal of which was shipped out of the country. This class knew how to survive. They did not confront the government, as has been the case in other countries of the region where socialist-oriented governments were seen as a threat to the survival of the bourgeoisie. The traditional economic elite were prepared to play second fiddle to the political power brokers in order to secure their investments and gain just enough favours to be able to hold their own.
The new elite, the new oligarchy is different. Its relationship with the political elite is not about survival. It is about expansion. It is not an uneasy relationship. There is a clear marriage between certain politicians and this new oligarchy which is seen as allowing the new oligarchic class to expand their wealth-making activities.
There is another difference between the new bourgeoisie and the traditional economic elite. The old economic elite were already well established by the time independence came. They had wealth and they were the emerging capitalist class, even though most of their businesses were family-based. In the business in which they operated, they were already well grounded.
The new oligarchs have on the other hand mainly emerged during the era of the present political elite and have entrenched themselves as the new oligarchy of Guyana because of the benefits that flow from this relationship.
Guyana is now a free market economy but because it is small economy, this excessive concentration of economic wealth in the hands of a few powerful individuals and companies is worrying. It becomes more bothersome because each day this new oligarchy is cornering new areas of business and economic activity.
The new oligarchs are sitting down and studying where there is money to be made and they are moving into these areas, regardless of whether there are existing businesses in that area.
Their tentacles have already reached into the hospitality, pharmaceutical, information technology, mass media, manufacturing, construction, home entertainment, communication and publishing sectors. The entry into these areas is being supported by the political connections of the main players, and this is what is dangerous, because the playing field is not seen as being level when the oligarchic class can boast of such powerful connections.
The next target is likely to be transportation which is a very lucrative sector. Information suggests that there is a plan to establish an airline that would dominate international routes using the Guyana brand. This brand is very valuable and if this airline is established, it will see greater power in the hands of this new oligarchic class.
Caribbean Airlines, which is owned by the Trinidadian government, has so far managed to survive all competition from other airlines. But you can get your bottom dollar that if this new oligarchy gets into the airline business and wins the Guyana brand, Caribbean Airlines will be hard-pressed to continue on the highly profitable Guyana route. And the oligarchic class knows that it is profitable. But they also know that there cannot be space for two major carriers in a small economic space.
This is where the real danger lies. When a sector is small, for new entrants to succeed on a highly profitable scale, it has to involve reducing the share of existing businesses in the sector, and this is why we have seen attempts at pushing existing companies and firms out of businesses. It is not going to be profitable for the new oligarchs unless they can dominate the areas in which they are investing and thus there will be attempts to either buy out or shut down competitors. And this is likely to be done with a little help from friends in the right places.
This is why even the established business have to be concerned. There is no sector in Guyana that is outside the reach of this new oligarchy. They have money, lots of money. They have influence, lots of it, and they have friends in the right places, very well-placed friends.
They can end up owning half of Guyana. But they might just decide that why own half when they can have the whole thing.

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