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Concessional financing

Feb 22, 2023 Editorial

Kaieteur News – It must be the food that we eat in these parts, or the effects of too much sunshine that saps the mental energies of leaders across this region.

Whatever is responsible, we are left to deal with the incredible (‘Caribbean leaders call for more concessional financing’ -KN February 11).  We are willing to give the leaders in the rest of the region a pass on this call for a different type of financing, but we are not ready to do so with our own Guyanese leaders, who embrace this line and then slavishly parrot it.

Concessional financing is definitely compulsory for other countries in the region, the Caribbean and Latin America, which have accumulated an amazing US$5.8 trillion in foreign debt. We want to ask where all that money went when the peoples of the region are as impoverished as ever, and always forced to run to some North American or European country to make a dignified living. We leave the others out, and focus on Guyana alone today.

To join in asking for concessional financing has its merits, but the PPPC Government should find the courage to share with Guyanese the financing terms in our relationship with ExxonMobil, and all that debt it incurs using our oil as collateral. We urge the President and his Government to be open about the kind of interest concessions that Guyana receives from ExxonMobil, if any. Also, when Guyana joins with others in the region on concessional financing, it is our belief that it is taking the cowardly way, going in reverse.  Though Guyana’s Minister of Finance delivered an impressive sounding speech before the bankers, he of all people should know that he is barking up the wrong tree.

Why not go the other way? We at this paper insist that going after revenue sources is the better way. We have all this high-quality oil, which is what we should be working fang and claw to wring concessions from foreign operators reaping and milking and guzzling our natural resources wealth. For emphasis: target the oil revenue streams, and other segments in the natural resources sector. To do so, means that leaders in the PPPC Government must courageously stand up and push to the table of conversation. This is to squeeze fairness out of reluctant foreign companies, especially those transferring so much of this country’s wealth to their coffers. Instead of pleading and begging in the timeworn fashion of poverty-stricken Third World countries with depressed economies, why not face the music and expend the same energies in tireless and relentless pounding on the door of foreign executive suites for movement on the economic aspects of contracts. When the top executives of companies insist on digging in their heels and playing hard ball (even dirty games), then countries like Guyana have to find ways on how to use their strengths to manage their wealth wiser, to reduce debt dependency.

The conversations must not be about what is fair and reasonable for foreign corporations. That has to change right away, if we are ever going to make oil companies see some light. For that would never work, ever be found acceptable by any self-respecting entity, whose primary motivations are to profit the most in the shortest time at the least cost. Foreign companies are their own best risk and return advocates. There has to be mutual regard for what each party to business deals brings to the table. Guyana brings its high-quality oil in increasing quantities.

Therefore, the oil companies must be made to recognise the wealth ownership claims of poor nations with expectant peoples, as pitted against the profit maximization visions of foreign companies. There must be some satisfactory tradeoff that assures prosperity for both sides. US President, Joe Biden has been unrelenting in his calls for a more balanced understanding from companies, including American companies. The wealth of nations is an asset, and the expertise and financing of incoming interested parties are vital cogs in a machine that must be in harmony. If not, there will be the inevitable crises and disgruntlements up the road, and the need for concessional financing that beggars line up to be doled out to them.

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