Guyana is in business but not for Guyana

Nov 12, 2021 Letters

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Dear Editor,

Kaieteur News – Guyana for how many years now has been doing business with foreign governments and corporations, can anyone tell me of any of these business partnerships that Guyana was better off from? I can’t think of any, as the sensible principles of business was never applied in the interest of Guyana, like mutually beneficial contracts to both parties, good faith negotiations on sharing gains and losses, etc. Looks like Guyana always absorb losses while the other party take all the gains. So many times, in the news you read, had the government done this or that, Guyana would have saved or made billions, so why these things were not done, who is in charge doing what? So now we are in the oil business as the oil genie cannot go back in the bottle. With the current oil contract, it looks like the streak of Guyana’s business failings will continue. The Grade so far, for management on environment, local content and insurance, has been a fail. The general framework for the oil business is:
Stage 1 (the upstream activities) which includes, exploration, locating, and production,
Stage 2 (the downstream activities) refining, storage and transport,
Stage 3 (end user activities) marketing, supply and distribution to retail users.
Stage 4 (Financial) includes, trading, settlement and banking of the proceeds of the sales.
As in business you can have the best product, but unless you can take it to market, get a fair price and the money in your hand, it means little. It is stage 4 where the main dagger of exploitation is struck in the hearts of third world countries, as they have no say in this stage. This is the situation Guyana finds itself, Jagdeo is correct it will take time to see benefits of oil as Guyana has no say in the banking aspects of the oil proceeds, the oil money goes to bank in the USA where Exxon takes its profits, pay their own people first then send whatever they like to Guyana, where they dictate how the money is spent mostly on infrastructure to help oil extraction, not on Guyana’s debt or to reduce poverty, so Guyana has to stay in debt and poor so they always have you like the coils of a camoudie around you, this is evident of other countries who for decades were producing oil and mining precious metals, yet are poor and in debt just like Guyana is now, had no say in stage 4 of the oil process. Even if Guyana gets 50 percent royalty and a fair share, as long as Guyana does not control the banking for its resources, much won’t change. Added to questions about the deal, added questions have to be asked such as, where is Guyana’s oil being marketed? At what price? And, where do the proceeds of sales go. It’s called “following the money”…if the opposition questions it, they have no chance of getting into power, if the government dare asks, they would get kicked out of power. Look at all the big cities in the developed world, the shiniest, fanciest buildings are the banks and financial companies, where trillions of dollars trade weekly in all kinds of financial instruments…e.g. stocks, swaps, futures, etc…a significant amount is oil and precious metals from third world countries…the bankers and traders however, usually are not from the third world, since in world banking/trading that’s where the money and honey is. It was Libya’s Ghadafi who proposed a bank for Africa to let Africa’s revenues from its resources be managed. He was demonised and met his demise eventually as that idea will not be tolerated from those exploiting Africa. The Democratic Republic of Congo, formally Zaire, has one of the highest poverty rates in the world, the highest death rate by violence in the world more than the war zones of the Middle East although they have the richest land of resources in the world, because the government gets changed fast like changing clothes as the exploiters want to extract as much resources as fast as possible, without a bit of care for its citizens, as chaos reigns daily. Before oil drilling in Guyana, the ambassadors of the ABC countries and the EU were proclaiming loudly how Exxon and the Government in power should ensure Guyana’s oil wealth must go down to the people, since the oil started coming to the surface, they have gone dead silent, as the people they were talking about are not the Guyanese people. The World Business News has projected oil will hit $125/barrel by June 2022, most affected countries are already making plans on this price, where is Guyana’s plan? Guyana’s economy is changing from the way Guyanese knew it from independence, it is time we hear from the finance and economic ministers about long term plans on this new economy. Past and current government ministers correctly say they don’t know the interest rate on the debt as the real cost of borrowing is different than the original agreement, however had they taken the time or interest, they could have given a reasonable estimate. We need to now raise our debt ceiling, debt to revenue ratio, because if debt is not managed and defaults, it causes the currency to collapse which will be devastating to Guyana. So in this new economy, Guyana needs long term plans for the following which it doesn’t have; environment, local content, insurance for oil activities, debt management, socio economic programmes, poverty reduction, agriculture and fisheries management etc…and the opposition shouldn’t try to use this against the government, as its collection of pensioners don’t have a plan either.

R. David

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