Dream or nightmare?

Dec 10, 2020 Editorial

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Kaieteur News – Professor Amy Myers Jaffe of the Fletcher School of Law and Diplomacy, Tufts University, covered wide-ranging areas in an article in The Conversation on September 22 titled, “Pandemic crushes Guyana’s dreams of big oil profits as ‘resource curse’ looms over oil-producing nations.” The great promise from oil for Guyana, the massive finds by Exxon, that earlier 750,000 barrels a day production projection by 2025, and the visit of U.S. Secretary of State Pompeo and its signals of Guyana’s newfound international status.
Professor Jaffe covered territory familiar to Guyanese (as is now becoming commonplace with foreign commentators): the Venezuela challenge, coronavirus troubles and the related consequences, the corruption spawning ground, and “political instability and ethnic conflict.” From all of this, it can be quickly gathered that outsiders know as much about Guyana, deep down, as we know ourselves.
To our embarrassment, the foreigners can tell us at length about our elections family feuds and the associated brawls. And that “Guyana’s new president, Mohamed Irfaan (sic) Ali, finally took office in August, that he campaigned carefully on better oil governance, and that “he promised to get Guyana its fair share of oil revenues.” Unfortunately, recent developments with a tainted Canadian consultant, Payara, the EPA head, flaring and environment, and Exxon in general, only confirmed that, promises aside, it is business as usual. That is, the usual corrupt and unconvincing kind.
Though its crude has barely left the ground, Guyana is already counting on oil revenues to patch deficits, differences, and launch into the stratosphere. In classic drunken sailor fashion, the government has signalled its readiness, if not impatience, with approaching our many challenges cautiously. A borrowing binge, or intentions to engage in one, is making daily media rounds from a president and his senior people, who throw around a billion here and several more on this and that to thrill believers and the naïve. The mentality is of borrow today; pay back tomorrow, or whenever later arrives. Of course, seasoned lenders, who were circling like sharks inside and outside of Guyana’s waters have just the right debt products (the soft terms of reasonable rates, grace periods, and extended repayment periods) to fit our needs and circumstances.
From all appearances, Guyana’s new leaders have not been able to resist the urge to pay today’s costs by borrowing against future oil revenues. Although, they have not come out openly and said so, this is the bottom line, because this is precisely what the Guyana government is doing today. Leaders have used the lengthy elections delays and the crippling effects of the COVID-19 pandemic as bases for the slump in the economy, and of the immediate need to jumpstart the sluggish economy with as many financial jolts as possible.
Currently, cash is doled out via coronavirus relief, and significant tax eases, all good things, but costly. Further, there has been the unveiling of a host of high-priced projects, all of which have their place; except that now is not the time for some of them, and the money to pay for them are made readily available for foreign lending agencies, is proving to be much of a magnetic hook to resist taking many bites. Because we are biting off so much so quickly, we will be hooked, and subject ourselves to dangerous debt loads.
But this is what the magic of oil does to poor countries. It makes for believed supermen of limited leaders, who think that they can do little wrong, since they have all these monies waiting to be collected, and costly missteps can be both afforded and cushioned.
President Ali has promised to create a petroleum commission to ensure transparency for how Guyana’s oil revenues are spent and to prevent undue political interference in the oil and gas sector. A word of caution is timely on that presidential promise. Political interference is second nature to Guyana, almost a culture; and, when the current commissions appointed to oversee and pilot forward different areas of Guyana’s business are considered, it becomes clear that tampering with the makeup and operations of any political commission would be irresistible. It would simply have too much power to be left to the visions and autonomy of people who are not party people, or those who have both the required expertise for Guyana to maximize its oil benefits, while possessing a fiercely independent strain to boot.
In the midst of all this, the once vaunted opposition is now in search of itself, but failing to come up with any substance. This is how weak, ineffectual, and inconsequential its presence and contributions have come to mean for Guyana.
Professor Jaffe’s position is that, for this country “to thrive in the long term, Guyana will need to sink much of its oil earnings into building other sectors to avoid overdependence on one volatile source of revenue.” Said differently diversify, as in the examples of “Malaysia and Dubai,” is part of the local blueprint to avoid the trap of “resource curse.” The concern is whether, beside the lip service, those at the helm are listening. And if they actually do, whether they will understand and respond positively. The outlook is not encouraging on the leadership front. Thus, the dream threatens to become the worst of specters: a permanent nightmare.

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