More Oil Less Democracy

Dec 25, 2019 Letters

DEAR EDITOR,

We have witnessed yet another major oil discovery. While this is good news for the future of Guyana, we have continued to witness on a daily basis the gross disregard of our constitution by the Granger administration. On December 21, it would have been one year since this government was toppled in a no-confidence motion, and we are yet to witness the proroguing of parliament. It as if this government sees our constitution like the proverbial “piece of paper”. Ministers on a daily basis are traveling the country on outreaches and campaigning using state funds.
Let’s face it, every day our democracy is eroding. This, of course, is nothing new, especially amongst oil-producing countries. Empirical evidence (Tsui, 2011) shows us that oil discoveries usually lead to slower democratic transition. What is even more worrisome is that oil companies seem to prefer working with a corrupt government. Having the government under control would allow these companies to become less accountable. It also reduces the chance of any possible renegotiation that could see the public vying for a bigger share of the pie. Of course, this would mean less profit and even expropriation in some cases. And this is a serious threat to these investors especially when billions of dollars have already being invested in acquiring requisite capitals. Hence, having a few key politicians under control would enable the company to engage is much wrongdoing at the determent of the people, and benefit of the company. And we are already witnessing this collusion. Take, for example, the government’s inability to come up with a depletion policy to dictate the rate of extraction of our oil resource. A higher extraction rate would mean a shorter cost recovery period and more profit. With no depletion policy in place, there is no guarantee that our oil wealth will benefit our future generation. Let’s face it, by the time we learn the ropes of the oil sector, there will be no more oil.

Roger Samuels

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