Dear Editor,
In 2007, I wrote a column on the topic of ‘Oil and Guyana’. Ten years later it has become a reality. I first introduced the concept that any oil reserves we find in Guyana are for the benefit of the citizens, not just for the company or for any government to squander. We must all benefit from this discovery I was fortunate to meet with the executives of Exxon in a briefing for the Opposition Leader and former president, Dr Jagdeo who was the president at the time the deal was signed with Exxon. Guyana is on track to producing 100,000 barrels of oil daily some time in 2020 or after with just the few wells that have been found so far, compared to Trinidad at 70,000 barrels of oil from numerous wells. This will give us time to review the critical issues facing us as a nation, given the failure of the APNU+AFC government in managing our economy.
I am very concerned that the government has talked about advancing themselves future revenues based on 2020+ projections. This in normal terms, means borrowing money. This is a recipe for disaster. It will defeat the entire purpose of an oil fund, if we are paying back debt prior to oil production post 2020. Another issue of major concern, is the hype that the industry will create new jobs and expend monies to build a refinery at Crab Island. They are in a dream world at this time. None of the data justifies such an investment.
I wanted to once again explore the oil formula I had proposed for the country so to keep us focused on the prize that is ahead of us, and not allow ourselves to be hoodwinked by this government. UK journalist Nicholas Shaxson says: “If citizens had the oil money in the first place, and the state had to bargain with them to get its cut, it seems likely that would change the game entirely.” We do not want to get what academics call the ‘resource curse’.
- I propose that we the people get a portion of the royalties. “The people may get lazy,” you say. Is that worse than the government using all the money to selectively bless others with laziness?
- “Well people may waste the money,” you say again. This government seems to have the monopoly on being wasteful. People spend according to their priorities but the APNU+AFC government spends money on what is politically expedient. We should be asking if people are more wasteful than this government.
I have concluded that for every year of failure by the APNU+AFC government, it puts our nation three years behind. Just driving down the streets of the capital city, and seeing the ghostly sites of no vehicles, no shoppers, brings about despair to many in the business community.
This government has not been able to determine a sensible balance between expenditures and tax rates and the effect on our economy in getting it wrong. The fiscal policy of taxing the people to manage our economy, becomes a problem post oil 2020. How will they manage new monies? One of the key factors in the management of our economy is growth; it really matters in the long run. Our economy is on the decline, there is no growth and consequently without that we have fallen into depression. Once again, if one visits any business and asks the question, ‘How are you doing?’ The answer is slow, bad and worrisome. Long term growth has ceased.
We are now in the ‘Taxication Zone’. I doubt whether the Minister of Home Affairs would put a curfew on that too. If the AFC had brought any value to the equation, we may have seen a better economic strategy. The 200 plus new taxes have taken our economy down.
The fact is that we are no better off solving our energy problem with this government halting the hydro project; we will not be producing more goods from existing production. Instead we have to start cutting back. What has been affected are our living standards.
The present government seems intent on continuing to follow the path which is slowly but determinedly leading us to at best economic stagnation and at worst to the destruction of a healthy economy which they inherited from the PPP/C. Their actions to date leave us with no confidence in their ability to wisely manage the potential bonanza which is expected to flow from oil revenues.
It is incumbent on all of us to shape our future by being involved.
Yours faithfully,
Peter R Ramsaroop
