Protestors lash out against Jagdeo’s claim that ‘more oil money not a good thing’

Jul 24, 2022 News

By Davina Bagot

Scenes from this week’s protest

Kaieteur News – A statement made by Vice President, Bharrat Jagdeo indicating that more oil money for the country is not a good thing, has not only sparked interest among economists in Guyana, but protestors who have been demanding changes to the Exxon contract.

On Friday, protestors against the deal marked eight consecutive weeks of unrelenting calls for a renegotiation of the deal.

One protestor who did not state his name said that Guyanese have been suffering to make ends meet, specifically pointing to the high food prices, causing some parents to be unable to pack their children’s lunch kits, yet, Dr. Jagdeo seems to believe that more revenue from oil will drive up inflation.

According to the protestor, “Children go to school every day with an empty lunch kit and this man, Mr. Jagdeo is telling people that this country doesn’t need money. This man is an embarrassment, not only to Guyanese but to the entire Caribbean. How can you go about telling people you don’t need more money?”

He said that despite the VP’s claims of more money not being beneficial to the country, the government has nonetheless been approving oil project after oil project “building an empire on our backs.” The protestor said the books of the country must be made public so as to confirm who is truly benefitting from the country’s oil wealth.

On Thursday, another protestor suggested that the VP speak with the Ministers of Health and Education to understand the needs of the country before making such statements. Additionally, he spoke to the critical need for better drainage and other infrastructural needs in the country.

On Tuesday, protestors held placards stating: “Dishonest politicians are a national problem”, “the Opposition is dumb, deaf and blind”, “Exxon must return to the table and our politicians are all blood suckers”.

One protestor also spoke against the oil giant, ExxonMobil, being in control of the government and the Environmental Protection Agency (EPA). He argued that it is the oil company that has been controlling its own operations, while the government and the EPA must simply fall in line.

Vice President Jagdeo, who is spearheading the development of Guyana’s oil and gas industry, believes that calls to halt the developments at present, in order for the country to realise a larger share of its oil revenues sooner, would not benefit the country.

In fact he argues that this could introduce added inflationary pressures to the country’s domestic economy. Jagdeo’s disclosure was forthcoming as he addressed guests at the annual Guyana Manufacturing and Services Association (GMSA) dinner, which was held on July 12, last, at the Ramada Princess Hotel, Providence, East Bank Demerara when he proffered this explanation.

However, two economists have since argued that this statement is grossly misleading to the Guyanese public. The economists, Elson Lowe and Ramon Gaskin, both believe that wise management of the resources garnered from the oil and gas sector can be beneficial to the country.

Gaskin for instance shared a number of areas in which he believes the natural resource funds should be used, that will not drive up inflation.

In economics, inflation is a general increase in the prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money

According to Gaskin, “It is my opinion that when this so-called oil money comes into this economy and to the people, the money has to be spent in a certain way. Not all of it has to be spent on infrastructure. Not all of it has to be spent on projects in the budget.”

Topping his list as a priority, Gaskin noted that more money from the oil and gas resources can be used to service the country’s present external debt. The recent Bank of Guyana (BoG) quarterly report indicated that in the first three months of the year, the state took on an additional US$124.4 million in debt, bringing the total to US$3.248 billion.

Mr. Gaskin is confident that if the government makes use of these five points, more money from the oil and gas sector would not land the country into a financial crisis. However, he insisted “if you take all this money and start spending like you wild, like a drunken sailor, it will be inflationary and the reason why the Vice President can say he doesn’t want this inflation is because he doesn’t have a proper plan in mind on what to do with this money.”

He argued that if the Vice President had a proper management plan for the natural resource funds, the money would not become inflationary. “He should know that if he plans it properly, it will not be inflationary and I have to disagree with the Vice President on this matter. It is not true that if you get more oil money, it would be inflationary,” the economist concluded.

Similarly, Elson Low, the Economic and Youth Policy Advisor to the Opposition Leader, who holds a Bachelor’s Degree in political Science and Economics from a United States College, Amherst, said more earnings from the oil and gas sector will not necessarily cause inflation. In justifying his response, Low explained, “the NRF holds Guyana’s oil funds offshore, that is to say, outside of the Guyanese economy. Jagdeo appears to be making the comment about inflation as if all the additional funds in the NRF (if more revenue were available earlier) would immediately be spent. That would indeed cause inflation.”

To this end, he told this newspaper that the VP’s attitude is concerning as it does not take into account saving for future generations.

The protest action calling for a renegotiation of the contract will resume on Monday at the Houston public road, East Bank Demerara from 10:00am to 12 noon.