Our political leadership is weak

Feb 15, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – When oil multinationals decide to negotiate with governments, they ensure that they are well prepared. They undertake a careful and detailed study of that country’s situation, including its economy, and the personalities with whom they will have to negotiate.

They also have the advantage in terms of information. They and they alone know what they have found and what it will cost to develop it. Newcomers to the oil industry such as Guyana, do not have the information which is in the possession of the oil companies and therefore these newcomers start from a disadvantage. Do we trust what the oil companies are saying?

The oil companies are highly skilled in negotiations. They hire the best legal and technical experts to advise them and to negotiate on their behalf.  When they place a figure on the table, say 2% royalties, they know that there will be a counter demand. And so their initial offer will tend to be very low. If a country settles for that offer, you cannot blame the oil companies. You did not look after your own interest and got taken to the cleaners.

Onto now there has been little transparency concerning the negotiation process in which Guyana entered into with ExxonMobil, CNOOC and Hess. It is not clear, onto now, who was responsible for assembling the negotiating team and what was the team’s reporting obligations. It is not even clear onto now whether Cabinet did vet the draft contract before it was signed. If it did then the then Cabinet holds collective responsibility for the decision. What is known is that the Petroleum Adviser to the then President said that when he told President Granger about the contract, he, Granger, seemed surprised.

It is not surprising also that the PPPC government has refused to even attempt to renegotiate the contract. The Americans are likely to have had a major say in this decision. They would have applied pressure to the government to not touch the terms of the contract.  It would not have been the first time that this has happened.

It is a fair assessment to make that neither Burnham nor Jagan would have inked such an agreement. At a time when the country was in desperate economic straits, Burnham rejected an IMF programme because he said that the terms were a recipe for riot.

But even Burnham folded to American pressure. When Burnham decided that he needed to outflank Jagan, he decided to nationalize the commanding heights of the economy, including the bauxite industry.

The Americans dispatched an envoy to meet with Burnham. He ended up having to pay massive compensation to the bauxite companies, an agreement which made a mockery of the idea that the bauxite industry was nationalized. It was taken over and paid for, and those payments eventually capitalized and led later to the debt crisis. So, even Burnham could not have resisted American pressure.

When the PPP was in Opposition it was highly critical of the OMAI deal. Jagan promised to reexamine the agreement when he came in. But pressure was applied also and he buckled under the pressure and the agreement which paid a 5% royalty and no taxes remained in force.

Now, if Jagan and Burnham could not withstand the imperialist pressures which were brought upon them, why should anyone expect that more weaker leaders such as Jagdeo and Ali would be able to stand up to the Americans? They have failed to even stand up to the oil companies much less to the oil companies’ backers – the Americans, the British and the Chinese.

It is now clear that the prospects for renegotiation of the Production Sharing Agreement are bleak. Following the statement made by Exxon that it does not favor renegotiation, the government has all but made it clear that there will be no renegotiation.

And therefore the Guyanese people have been betrayed yet again by their rulers. The APNU+AFC signed a disgraceful agreement and the PPPC which promised renegotiation has turned its back on the process. The PPP promised to renegotiate but have backpedaled on this commitment

But these decisions would not have surprised the oil barons. The oil companies leave nothing to chance. This is why they hire the best. They have studied our politics and political actors. They know which screws to turn – they do not even bother to rub heads and slap backs.

Until and unless we have stronger leadership in Guyana, the betrayal of the people will continue to be a political norm. Unlike the oil companies, we do not invest in our best; we opt for political lackeys that are more form than substance and who really are a mismatch when dealing with the oil companies.

(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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• ExxonMobil, governments, leadership, Peeping Tom, political

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