Deja vu

May 15, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – Guyanese are not likely to get excited about the announcement that manganese exports are due to resume after an absence of more than 50 years. Nor should they be enthused about the planned opening of new larger than Omai-scale gold mines.
In fact, Guyanese should be gravely concerned. Those announcements, made by the Hon Minister with responsibility for Finance, Ashni Singh, suggest that the PPP/C government is once again setting sails into the high seas of economic uncertainty and it is on the same course which led to its electoral demise in 2015.
The PPP/C lost the 2015 elections because of a number of factors, including incumbency fatigue. But the prime reasons had to do with corruption and a failed economic model of development which emphasised large-scale foreign direct investments in the extractive sectors.
Dating back to the Hoyte administration that model has been a palpable failure. It promised much but delivered little. It has exacerbated inequality and become a breeding ground for corruption. But most of all, the resource extraction model has led to the plundering of the country’s natural resources akin to the 16th century Spanish plunder of the minerals of the South American mainland.
The Minister with responsibility for Finance has announced that manganese exports (and therefore production) has recommenced and that three large scale gold mining operations are soon to be established. Guyana is remaining on the trodden and beaten path of a primary resource extractive economy.
We do not need another three large than Omai-scale gold mining operations to remind us of the failure of that model. One Omai provided enough lessons for a lifetime.
Over three million ounces of gold were believed to have been plundered from the bowels of Guyana by OMAI. And despite extracting so much gold, that company amazingly never turned a profit.
When Omai Gold Mines was first opened, there were high expectations. The Guyanese people were serenaded and told that this investment would do wonders for the country, create a great deal of jobs and improve the economy. People were led to believe that this mine was the lost city of El Dorado. And that the gold, which would be dug up, would make millionaires of everyone.
Three million, seven hundred thousand (3,700,000) ounces later, Guyana was still the second poorest country in the western hemisphere. The riches did not materialise. The number of jobs created was way below public expectations.
One defender of that deal said that Guyana got about US$500M in royalties and revenues. That, however, works out to about $40,000 Guyana dollars for every million ounces of gold extracted. Can you believe that?
And this is the model of development which the PPP/C is returning the country. It is a failed model which allows for the bleeding of the resources of Guyana.
Omai was responsible for the country’s and the Caribbean’s worst ever man-made environmental disaster. That US$500M cannot even compensate for the effects of that tragedy.
Omai once shuttled KFC chicken by airplane for its workers. This company once gave a loan to a union official.
The deal with Omai involved generous tax holidays for the company. The taxes that the government derived from the operations did not come from the company, but from the workers. The company milked its tax holiday. It paid little or nothing in taxes. The government secured a mere five percent in royalties.
History is repeating itself and is about to be repeated again. Fifty six years after political independence, Guyana is being recolonised by foreign direct investment.
Under colonial Guyana, we criticised the foreign multinationals for their role in exploiting us and taking away their profits. We went as far as nationalising the industries, which were run and controlled by foreign multinationals – Bookers in the sugar industry and Alcan and Reynolds in the bauxite industry. It was our hope that with the commanding heights of the economy under our control, that we would be in charge of our wealth.
But within a short period of time, we were forced to invite other multinationals to come and take over these very industries. Booker-Tate came to manage the sugar industry, Green Construction and Mining and MINPROC were involved in the bauxite industry. And they did no different from what the previous multinationals did. Their executives lived like the old colonial overseers, while the workers had paltry returns.
Today the situation is not much different. Foreign multinationals have returned to target our gold, manganese, bauxite and oil. And what are we receiving in return? A few jobs and pitiful royalties!
Our wealth is being plundered while our people continue to eke out a living. And we continue to call that progress.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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