The private sector is applauding at its own tragedy

Dec 16, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – You had to be there to appreciate how smitten the private sector is with President Irfaan Ali. While addressing a recent Guyana Manufacturing and Services Association (GMSA) event, the President was greeted with lusty and regular applause from the barons of local industry who were oblivious to the superfluous presentation that was being made.

President Ali had the audience’s rapt attention and appreciation. But one wonders whether those who were so generous with their applause really digested the nonsense that he spoke. He took a familiar line. The President claimed that multinationals allow countries like Guyana to build capacity, to build technology and know-how and to benefit from capital investment. This is the propaganda that the neo-liberal international financial institutions and the multinationals themselves are ramming down the throats of our leaders.

They are encouraging governments to invite multinationals into the countries, and are telling them that in so doing the country will build capacity and enjoy technology transfer and know-how. That argument however has long been discredited. And it is shocking to learn that President Ali, in this day and age, would fall for it hook, line and sinker. Despite having a doctorate in urban planning, he needs to be schooled in macroeconomic history.

Multinational corporations (MNCs) and transnational corporations (TNCs) have had a notorious reputation for plundering developing countries. This is why as part of the neo-colonial struggle many newly independent states took actions to nationalise the commanding heights of their economies. When Prime Minister Forbes Burnham opted to nationalise the bauxite industry, he said that, “You cannot be an independent country and be an economic satellite, not merely of another nation, but of a private corporation.”

Under colonial rule, Guyana was once designed as Booker Guyana in reference to the commanding position the sugar company held in the national economy. Similarly, the bauxite companies exerted an overweening domination in the bauxite industry. Burnham’s position was that a country like Guyana must own and control its own natural resources which for too long had been exploited with only minimal benefits to the country. Burnham was not opposed to foreign multinationals involvement in the economy but he felt that Guyana would not derive the maximum benefits possible within only minority interest in the natural resource sector.

At present, Guyana has come full circle. The foreign multinationals such as ExxonMobil, Hess and CNOOC are plundering Guyana. The country is receiving a mere 2% as royalties and 12.5% as profit oil in what has been as the worst oil deal in the country. Guyana’s gold is also being plundered by foreign companies. The same tune that Irfaan Ali is singing today was sung by Desmond Hoyte. He too heralded the importance of foreign multinationals. But the returns were poor for the country when he brought in foreign multinationals such as Green Construction, Booker State and Cambior, to name a few. OMAI, for example, paid a small royalty and no corporation tax. And in all their years of extracting millions of ounces of gold, they never declared a profit.

The reputation of multinational corporations as resource plunders has not changed. And this reputation is not limited to the natural resource sector. A few months ago, United States President, Joseph Biden, took a swipe at a major shipping companies in the trans-Pacific area accusing them of increasing freight rates by more than 1000%. These companies control about 80% of shipping in that Region and therefore their actions have had a significant impacted on shipping costs.

Four major multinationals control 90% of the global trade in grains. These companies, called the ABCD – Archer Daniels Midland, Bunge, Cargill and Dreyfus – also have their tentacles in the other areas of the agri- food chain, thus giving them a decisive role in determining the global price for food. President Irfaan Ali is leading a charge for greater food security. But the more money he pumps into the local economy, the higher the prices of food becomes, suggesting that the rate of increase of disposable income is outstripping production.  In such a case, inflation is bound to increase. Consumers are feeling the squeeze as foreign multinationals corner the limited market. Housewives recently complained about a steep increase in milk powder and butter. All of this is happening at a time when freight charges have declined. Multinationals, if given the leverage, will rape our resources from right under our noses. It is for Irfaan Ali to ensure that these foreign companies do not leave Guyanese with scraps while they cream off the main benefits…He can start by singing the praises of foreign multinationals.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.) 

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