Former PPP Minister demands urgent renegotiation of ‘wicked’ Exxon contract

Dec 22, 2021 News

“…until the wicked, hypocritical and onerous provisions of this PSA are renegotiated, as was done in Trinidad and Tobago and other countries, the people of Guyana will be denied the sanctity of their self-respect and well-being,” Geoffrey Da Silva

Kaieteur News – Successfully achieving good governance policies to avoid the resource curse -Dutch Disease—is easier said than done and some symptoms of ‘Dutch Disease’ have begun to appear locally.

Former PPP/C Minister, Geoffrey Da Silva

This is according to former Minister in the People’s Progressive Party/Civic (PPP/C) administration, Geoffrey Da Silva, who yesterday in a public missive lamented that “many oil-producing countries had similar good intentions like those of the PPP/C government, but they became more underdeveloped and poor because their governments early on, ignored, downplayed or denied the creeping symptoms of ‘Dutch Disease—symptoms of which are already being experienced in Guyana.
To this end, the former government minister was adamant that the Production Sharing Agreement (PSA) signed between Exxon (with its partners) and the former APNU/AFC Government of Guyana has to be changed.
Observing that the PPP/C government’s position is that they cannot renegotiate, because they have to adhere to the sanctity of contracts, Da Silva was unwavering in his position, “…until the wicked, hypocritical and onerous provisions of this PSA are renegotiated, as was done in Trinidad and Tobago and other countries, the people of Guyana will be denied the sanctity of their self-respect and well-being.”
According to DaSilva, there has to be a ‘sanctity balance’ to ensure that all Guyanese workers, farmers, the unemployed, the marginalized, the poor and the hungry experience significant improvements in the quality of their lives.
Elucidating his position within which Guyana finds itself as an oil producing nation, and its exposure to the Dutch Disease syndrome, Da Silva observed that in the domestic economic sphere, there are signs that the economy could become heavily skewed towards the oil-related sectors.
There is an increase of all kinds of imports, including raw materials and foods that could be produced in the country.
As such, to ensure balanced development in a relatively small local market, the government has to prioritize, in addition to its local content policies, the creation of an export strategy that would build effective institutions for supporting Guyanese businesses and foreign-owned companies in the non-oil sectors to expand in current foreign markets and enter into new export markets with value-added products and services, he said.
Additionally, Da Silva noted that in the financial sphere, there are indications that the government may be considering to borrow, speculatively, from the future sales of oil to finance projects.
Accordingly he cautioned, “many projects still go over deadlines with cost overruns because of poor planning (trying to rush many projects) and ineffective oversight.”
Compounding the situation, he observed that, the foreign exchange rate is appreciating and in the near future, it could negatively affect the competitiveness and export opportunities of the non-oil economic sectors.
“So far, the government has not publicly outlined how its plans to source financing over the next 10 years, how it will diversify the tax base to prevent over-dependence on oil earnings for its revenues, and how it will encourage both foreign and local investors to re-invest their earnings into the national economy,” he said.
Additionally, DaSilva noted that in a situation where many types of crimes are increasing, “there are significant wage gaps between females and males, and between political office holders and workers and farmers. The education system is unbalanced with the continuing dominance of legal and medical graduates over engineers, scientists and managers. In the health sector, there is no publicly outlined programme to end the stunted growth of many children in hinterland areas.
He noted too, that in the political sphere, there are few genuine consultations with the public and to date, initiatives have not been prioritized to build political stability and overcome the never-ending inter-ethnic suspicions.
Da Silva did note that, “in spite of these concerns, there are positive signs that a significant majority of Guyanese representing all ethnicities, gender, ages, classes and different abilities, want to believe that the intended policies of the PPP/C can make Guyana a better place, provided it acts as a national government and all its members and supporters, not just its leaders, genuinely and humbly reach out with courage to all grassroots communities to overcome the political stalemate and debunk ethnic fears and stereotypes.”