Guyana going to the dogs

Jul 04, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – Glenn Lall, the publisher of this newspaper, has been making a point that people need to take more seriously. He has spoken about this oil economy that we are developing and how it will end up costing us more than what we are receiving in revenues.

Yet most people only perceive the oil industry in terms of the revenues which Guyana is obtaining. But as know, those revenues are not sufficient to meet the immediate development needs of the country.

The government, instead of seeking better terms from the oil companies, is engaged in a borrowing spree. This will further indebted the country – one that is supposed to be the fastest growing economy in the world. Thus it is likely that the more oil revenues we earn, the higher will be our national debt.

But Guyana’s oil economy is not simply about the royalties and profit oil. The local economy is being repurposed to cater for the oil industry.

Already, the map of Guyana has been altered. An island, created from dredging the Demerara River bed, has been created at the mouth of the river. This is an entirely artificial attachment to the country’s territory, small as it may be.

But the more ominous development is the cost to the economy, production and productivity as a result of the development of all the various businesses that are being developed to service the oil industry. Just think, for example, about the exponential increase in the number of trucks and heavy-duty vehicles using our roadways and the delays, damage and destruction that they are causing. Think about the toll these vehicles are causing to country’s road and bridges which have to be repaired and redone because of the burden these vehicles are having on our road network.

Already the government is being forced to spend billion for infrastructure to cater for the oil economy. Tow lane roads have had to be expanded to four lanes and these new roads are increasing road accident fatalities.

Think also about the congestion on our roadways caused by the movement of heavy-duty vehicles and equipment. There are constant delays, lone lines of crawling traffic and the consequential loss of man hours.

The country port infrastructure is too small and concentrated along a narrow band of coastline to effectively service the needs of the expanding oil and gas sector. As such there is fierce competition for river-front lands and this has caused the price of such lands to skyrocket, costs which are invariably passed on to consumers.

The shipping industry does not have storage space along the waterfront for normal commerce much less now that they are burdened with industrial imports for the oil and gas sector. As such, freight forwarding companies have to be constantly moving containers on Guyana’s small roads and this add to the congestion.

The oil and gas economy has triggered a construction boom. This has seen construction costs skyrocket. Prices have almost tripled because the supply cannot keep up with the demand, despite the government removing taxes on a range of construction materials.

It is the poor people who suffer the most in such situations. They cannot pass on their additional costs to anyone, in the same way that businesses can. And so, the poor are being marginalized rather than empowered by the oil industry.

Since the government began to offer part time jobs to citizens, there has been an acute shortage of labour. Almost every major business is being forced to advertise for workers. This did not happen in the past because there were more workers than jobs. Now today, companies are struggling to meet their deadlines because of the shortage of labour. The non-oil and nonoil related industries are suffering. The fishing industry has already been severely affected with many fisher folk forced to exit the industry.

The oil economy is increasing environmental pollution. The expansion of the economy has been so rapid that it has outstripped the capabilities of sanitation services to address pollution. And to make matters worse, there are proposals to treat radioactive wastes onshore. Citizens’ lives are affected by pollution and environmentally unsound actions.

Despite the fastest growing economy in the world and the oil revenues which are being received, the value of Guyana’s dollar has not appreciated. The argument is that the demand is so great that it has cancelled out any potential gains from the massive influx of oil revenues. But if this were the case, the dollar would have depreciated.

All of this shows just some of the ways in which the oil economy is destroying Guyana. And it will continue to do so because the government has agreed to breakneck speed of oil production.

Oil is not taking Guyana forward. It is pushing the country backwards. Inequality is growing and will eventually create a major class conflict that will be calamitous.

So do not count your blessings when it comes to oil! It has become a curse on the nation.

(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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• Glenn Lall, Guyana, Peeping Tom, Publisher, revenues

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