Last week, we began a discussion on the article published in the New York Times on 20 July 2018 under the caption “The $20 Billion Question for Guyana”. It was written by Mr. Clifford Krauss, national energy business correspondent based in Texas, USA, following a brief visit to Guyana. We had identified nine observations that the reporter made in the article that are worthy of some commentary. So far, we dealt with two items. Today, we discuss the remaining seven observations.
3. The power grid is so unreliable that blackouts are a regular plague in the city, while in much of the countryside there is no electricity at all.
While the first part of Mr. Krauss’s sentence is a fairly accurate assessment of the state of affairs of the Guyana Power and Light (GPL) Inc., the situation is somewhat better, compared with the past. In its 2012 Annual report (latest publicly available), GPL stated that 31.7 percent of the power generated was lost in technical and non-technical means, down from 40.39 percent in 2005. In terms of financial performance, GPL recorded an accumulated deficit of $12.987 billion and its net worth was a mere $8.450 billion when all liabilities are taken into account. This was despite the massive sums that the Government and the Inter-American Development Bank had provided over the years to rehabilitate and maintain the power company’s infrastructure. Where do we go from here?
The government has appointed a Jamaican Chief Executive Officer in an attempt to improve the fortunes of the company. However, it is too early for an assessment to be carried out. Meanwhile, the life of GPL’s board expired a few months ago, and it is unclear why to date a new board has not been installed. Perhaps, the time has come for consideration to be given to the privatization of the utility company and to encourage new providers of electricity to come on board. This will inject competition in the sector, as opposed to GPL’s current monopoly status, and will have the effect of ensuring greater efficiency and consequent lowering of tariffs to the consumer. We should also provide fiscal concessions for businesses and homeowners to switch to solar energy and encourage investment in windfarms and hydropower, as a contribution to the global fight against climate change and global warming.
With regard to the second part of Mr. Krauss’s sentence, last year I had the good fortune of travelling the length and breadth of this country – from Moruca, to Mahdia, to Linden and to Lethem in the interior; and to the entire coast from Charity to Corriverton. I still have a difficulty in figuring which villages were without electricity. Even the Indigenous Peoples’ homes were powered by solar energy, though in a small way.
4. If all goes well, one of the poorest countries in South America could become one of the wealthiest. Suddenly the talk of Georgetown is a proposed sovereign wealth fund to manage all the money, as if this were a Persian Gulf sheikhdom. Countries that discover oil often waste their opportunity, as the resource blends seamlessly with corruption. Countries with weak political institutions like Guyana are especially vulnerable.
Guyana’s GNI per capita in 2017 was US$4,460, which is the third lowest among the twelve countries comprising South America. However, nine of these countries are oil producing countries – Brazil, Venezuela, Colombia, Ecuador, Argentina, Bolivia, Peru, Chile and Suriname. Therefore, the comparison is difficult to make. In addition, since 2016, the World Bank has re-classified Guyana an upper middle-income country while the IMF has ranked it at 117 out of 187 countries in terms of per capita income. In other words, at a global level, there are 70 countries that are considered less fortunate than Guyana in terms of economic development. While it is also true that among the 13 the English-speaking Caribbean, Guyana is ranked the lowest in terms of per capita income, unlike Guyana, these countries are tourist destinations.
We do not believe it is fair to state that “Suddenly the talk of Georgetown is a proposed sovereign wealth fund to manage all the money, as if this were a Persian Gulf sheikhdom”. In fact, there are enough persons who have serious reservations about whether the benefits of oil production will flow to the ordinary citizens, unless certain concrete actions are. In this regard, we may also wish to refer to the International Monetary Fund’s assessment as well as those of other reputable institutions in terms of the extent to which we are prepared and the mechanisms we are putting in place in the run-up to 2020 when oil production is expected to begin. Many commentators have also expressed their concerns about the need to be guarded against Guyana being inflicted by the resource curse (the ‘paradox of the plenty’) and the Dutch disease, considering the experiences of other oil producing countries.
The original draft legislation on the proposed Petroleum Commission was so seriously flawed that the Authorities were forced back to the drawing table to develop a revised version for presentation to the National Assembly. The Government is also yet to table legislation on the Sovereign Wealth Fund. To the extent that these exercises are not completed and are not given the urgency they deserve, citizens become worried about how the proceeds from the exploitation of what has now become our greatest natural resource, will be accounted for and how it will be used. It would do well if the Government were to expedite the finalization of these two vital pieces of legislation, considering that oil production is a mere 16 months away.
5. The civil service is corrupt, and the private sector is slow to innovate, businessmen and aides to senior officials acknowledge.
This a sweeping statement about corruption which ignores the efforts being made in recent years to fight corruption. These efforts include: the several amendments to the Anti-Money Laundering Act to bring it in line with international standards in an attempt to curb money-laundering and drug-trafficking; the activation of the Public Procurement Commission; the establishment of the Integrity Commission; the promulgation of a Code of Conduct for Government Ministers, other parliamentarians and senior public servants; and the early approval of the national budget. Perhaps, it is too early to assess the effectiveness of these and other measures.
While it is true that Guyana was assessed poorly over the years on Transparency International’s Corruption Perception Index (CPI), compared with the rest of the English-speaking Caribbean, during the period 2015 to 2017, it has moved up in by nine percentage points, as can be noted from the following table. Guyana is now ranked 91 from among 180 countries assessed on the CPI.
CPI results for the English-speaking Caribbean: 2013-2017
# Name of country 2017 2016 2015 2014 2013
1 Bahamas 65 66 N/A 71 71
2 Barbados 68 61 N/A 74 75
3 St. Lucia 55 60 N/A N/A 71
4 St. Vincent & Grenadines 58 60 N/A 67 62
5 Dominica 57 59 N/A 58 58
6 Grenada 52 56 N/A N/A N/A
7 Jamaica 44 39 41 38 38
8 Trinidad & Tobago 41 35 39 38 38
9 Guyana 38 34 29 30 27
Despite the measures taken to minimize the extent to which corruption is perceived to exist in the Guyanese society, corruption remains a significant issue, especially in the area of public procurement and taxation. But the fight must continue in a more intensified way, considering that corruption benefits the rich and powerful at the expense of the poor, the disadvantaged, the unemployed and other vulnerable groups that make up the bulk of the population.
6. A plague of ethnic tribal politics has produced a fragile state with an economy propelled by drug trafficking, money-laundering, and gold and diamond smuggling.
It is true that our politics is based on ethnic considerations, and this has been so since the early 1950s. On this score, we shall step aside to allow our political commentators to have their say about the above statement from Mr. Krauss. It is also true that the economy was propelled by drug trafficking, money laundering, and gold and diamond smuggling, and to a lesser extent the practice continues. However, one must also recognize and acknowledge the efforts made to address the problem.
7. A vast majority of college-educated youths emigrate to the United States or Canada, while those who stay behind experience high rates of H.I.V. infection, crime and suicide.
We cannot dispute the fact that most of the students graduating from the University of Guyana leave for overseas to pursue further studies or to seek employment and a better way of life. The same applies to our teachers and nurses. How do we put measures in place to encourage trained Guyanese to remain home and serve the country is a major issue for the authorities to consider. Having said that, one is taken back by the statement that Guyana is experiencing a high rate of H.I.V infection. According to world atlas, 1.60 percent of the Guyanese adult population is affected by H.I.V which works to approximately 8,500 persons. (See https://www.worldatlas.com/articles/countries-with-the-highest-rates-of-hiv-aids.html). In the United States, the percentage is 0.30 percent or 1.1 million Americans. As regards suicide, we acknowledge that Guyana has the highest suicide rate in the world at 30.6 persons per 100,000. (See https://www.worldatlas.com/articles/countries-with-the-most-suicides-in-the-world.html). The murder rate in Guyana is 18.37 persons per 100,000 which puts 163 countries ahead of us. (See https://en.wikipedia.org/wiki/List_of_countries_by_intentional_homicide_rate). It is evident from the above that Mr. Krauss’s observations about H.I.V. and crime rate are very much overblown.
8. Colorful Hindu monuments tower over Guyana’s rice fields, a reminder of the cultural distance between the country and its Latin American neighbors.
Mr. Krauss was perhaps referring to the structure on the West Coast of Demerara that overlooks the rice fields. This is the only one I have observed in my travels throughout the country. That apart, Guyana is the only English-speaking country in South America, and has ties more to the Caribbean because of a common heritage. In addition, contrary to the impression given by the article, one best estimate of the composition of the Guyanese in terms of the three major religions is as follows: Christianity – 50 percent; Hinduism – 30 percent; and Islam – 20 percent.
9. Local oil executives say one obstacle to overcome is a lackadaisical attitude toward safety among Guyanese workers, who frequently arrive at their construction and wharf jobs in flip-flops and sometimes use their hard hats as soup bowls.
There may be some truth in our approach and attitude to work. But to say that construction workers frequently go to work in “flip-flops” is an observation that most Guyanese will not share. In addition, I am yet to see worker using his/her hat as a soup bowl.
Finally, there were three photographs in Mr. Krauss’s article that try to portray how backward we are as a nation: boys playing soccer in the muddy field in East La Penitence; a farmer applying fertilizer manually to his rice field; and a handful of rice shown on an old wooden and rugged table that looks very much like “fowl feed” rather than one that we produce for local consumption and for export. I am sure Mr. Krauss would have eaten rice produced in Guyana at his home in Texas or elsewhere. Those photographs are distasteful to say the least!