Locals can benefit, despite huge profits being foreign investors’ game plan

May 08, 2019 Letters

DEAR EDITOR,

Time and again, columnists, letter-writers and other commentators across the media lament the fact that foreign investments aim not at benefitting the local economy, but rather, at facilitating great financial gains for the investment companies. While generally, this may be the case, studies on foreign investments across the globe over several decades have shown that the local economies and local populations have also gained. However, in the context of Guyana, the extent to which the populace would benefit depends on the political will of the government to enter into contractual agreements that include frameworks for local oversight, monitoring and enforcement, backed by infrastructural plans that would foster our national development goals.
Without getting into the technical aspects/pros and cons of foreign investments and the investors’ game plans, I have chosen to highlight some of the benefits/advantages that can be derived from Exxon’s oil and gas explorations in Guyana.
As the pundits predicted, we will benefit from windfall cash, perhaps, in excess of US$15billion annually for the next several years. I take the informed view that a huge part of that excess should be used to our advantage through the building and strengthening of the capacity of the social sector, and through job creation projects, such as, long term physical infrastructural development of bridges across the major rivers, highways crisscrossing the country, airports, high-speed railway to Brazil, and a deep-water harbour, among others. These would afford Brazil and other South American countries closer links to economies/markets in the Caribbean and across the Atlantic Ocean. Such projects would provide thousands of jobs for Guyanese, and upon completion, would derive additional revenues from Brazil and others for their usage. Additionally, these infrastructures will propel and transform Guyana into a vibrant south-south transportation and services hub.
The biggest problem for Guyanese, however, has been the lack of transparency in the arrangements with Exxon. An Economist article (June 27, 2017), referring to the potential for oil-money corruption, stated that ‘[i]t will take better politicians to resist the corrosive power of petrodollars’. For example, most of us are aware of what happened to the first bonus of US$18 million from Exxon.
Furthermore, the APNU + AFC government, to date, has no clear plan of action for utilizing the windfall excess. It is therefore imperative that a comprehensive infrastructural development plan be devised to absorb the excess windfall over the next several years to advance the nation’s development and international stature as a successful oil economy in the world. It is worth mentioning that some pundits have opined that Exxon may very well close operations after pumping crude for four to five years. It is currently enjoying stocks/shares increase with every oil find off our shores. In other words, Exxon is already enjoying huge financial gains even without pumping/selling any of our crude.
In essence, while Exxon’s, like any foreign investments, is aimed at facilitating the greatest returns for the investor(s), Guyanese can also derive huge benefits, such as foreign exchange, skills enhancement and job creation. However, much would depend on our political leaders’ ability to negotiate the terms and arrangements, ensure such terms are incorporated into the legal instruments/contracts, and monitor and enforce those terms to derive the national benefits. In the final analysis, infrastructural development plans must be hatched to transparently use the excess oil windfall while passing on benefits to the populace through job opportunities.

Yours sincerely,
Ronald Singh

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