We cannot wait on OFAC to tell us that millions of US dollars were not collected

Jun 19, 2024 Letters

Dear Editor,

Kaieteur News – One of the most valuable non-renewable resources that Guyana has, apart from oil, is gold. The price for an ounce of gold on the World Market (June 16, 2024) is US$2,348.40 (https://www.google.com/search?q=price+of+gold&rlz=1C1ONGR_enUS1113US1113&oq=price+of+g&gs_lcrp=EgZjaHJvbWUqCggAEAAYsQMYgAQyCggAEAAYsQMYgAQyCggBEAAYsQMYgAQyBggCEEUYOTINCAMQABiSAxiABBiKBTIHCAQQABiABDIHCAUQABiABDINCAYQABixAxjJAxiABDIHCAcQABiABDIHCAgQA); and therefore, one pound of gold is US$37,574.40, as compared with a pound of sugar at US 19.35 cents and rice at US18.15 cents (https://tradingeconomics.com/commodity/sugar).

With the price of gold being so attractive, one would think that policymakers in charge of the sector would be more vigilant, not only at the airport, which is the second-best location, but at all the locations where the gold is extracted and sold. And hence, more real-time monitoring is required to close the gaps in what appears to be very weak institutions. As a result, one may also ask: Is smuggling supreme? Is corruption present? Are those in charge held accountable?

Meanwhile, according to the export data produced by the Bank of Guyana, gold is the second largest source of foreign exchange earnings in Guyana, and it generated US$ 808.6 million in foreign exchange in 2023 (Bank of Guyana. Annual report 2023: https://bankofguyana.org.gy/bog/images/research/Reports/ANNREP2023.pdf; page 22).

A more important finding is that at a time when the gold price is increasing, Guyana’s output over the last three years has been declining. More precisely, in 2021, when the price per ounce was US$1,707.23, a total of 502, 802 ounces of gold were sold; but in 2022 when the price increased from US$1,718.25 to US$1,850.09, an increase of US$131.84 per ounce, the corresponding gold sales declined from 482,934 ounces to 437,060 ounces, a decrease of 45,874 ounces (see the Table and Figure below), which in 2023 at a price per ounce of US$1, 850.09 per ounce is worth US$84, 871,028.66.

Undoubtedly, the Guyanese institutions in the mining sector are broken; and the Ministry of Natural Resources has work to do, especially if there are issuing more permits to start gold extraction projects, and issuing more licenses to dealers. Moreover, we cannot wait on the Office of Foreign Assets Control (OFAC) to tell us that Millions of US dollars were not collected, for this is the job of our institutions. And to think we may have similar concerns with other non-renewable resources (diamonds, bauxite, manganese, timber, if there is no silviculture, other) that fall under the same or similar government institutions!Wake up Guyana!

Sincerely,

Dr. C. Kenrick Hunte

Professor and Former Ambassador

Dr. C. Kenrick Hunte, Letters, non-renewable resources, OFAC

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