Every Man, Woman and Child Must Become Oil-Minded

Emancipation Messages

(Part 54)

Introduction

Events marking Emancipation Day saw two significant statements from two leading Afro-Guyanese leaders, President David Granger and Professor Clive Thomas. Speaking to different audiences, President Granger who is also leader of the PNCR, the APNU and the APNU+AFC Coalition, called on the Afro-Guyanese community to cease idling and depending on others for money. By contrast, in a Panel discussion in the politically significant East Coast Demerara village of Buxton, Professor Thomas, an economic adviser to the President and co-leader of the WPA, a member in the Coalition, called on his Party to lobby and support cash payments to every single household as their share of the benefits of oil and gas in terms of cash or cheque received in their accounts.

To add to an issue which might loom large in the politics of Guyana, former AFC Chairman Mr. Nigel Hughes, speaking at the same forum with Dr. Thomas, advised caution and called for “a discussion based on data rather than hot air”, asking rhetorically about the criteria and the assessment benchmarks to be used going forward, so that the issue is not reduced to discussions.

Trotman

To add to the confusion, Mr. Raphael Trotman, leader of the AFC who had ducked out of the Buxton event, is reported at a subsequent AFC press conference to have welcomed Thomas’ introduction of the subject and committed to making representation in Cabinet “for such a system to be put in place since it has worked in many other countries”.

Trotman did not indicate the other countries where such a system has worked. It is well known that the State of Alaska in the USA pays a Permanent Fund Dividend to Alaska residents. That system will be addressed in a later column but suffice it to say that the payment there represents but a small percentage of the average income of the residents of the State. One letter writer to the Stabroek News identified Libya as a country which gave citizens a share of the country’s oil revenue annually.

Presidential rebuke

President Granger’s remarks, coming on Emancipation Day, a day of celebration not only for Afro-Guyanese but increasingly for all Guyanese, were seen as a rebuke and stereotyping of that section of the society and his admonition to them to become entrepreneurs appeared to lack empathy and an honest understanding of the challenges of entrepreneurship. His own experience as a commercial publisher would have been relevant and instructive. It cannot go without comment that the President hardly spoke up for agricultural entrepreneurship in his famous six curses speech in Atlanta several months ago. Even now, the President does not appear to have disabused himself of that notion, contrasting our newly discovered petroleum reserves as a “blessed resource” which he described as belonging to all Guyanese.

What the President did not say however is that his Administration has practically contracted out that “blessed resource” (singular) to ExxonMobil and its partners for an indefinite and indeterminate period and has immunised that company from “any increase of or any new petroleum related fiscal obligation, including, but not limited to, any new taxes whatsoever, any new royalty, duties, fees, charges, value-added tax (VAT) or other imposts. “ It is actually worse than this because except for a 2% royalty, those companies pay zero taxes, zero duties, zero fees, zero charges, zero value-added tax (VAT) or zero other imposts.

Shackling Parliament

And it is still worse than this because if the Parliament of which the President is an integral part, were to pass any law whether affecting the environment, human rights or anything else which has a material effect on the oil companies, the Government is compelled to make good any such adverse effect. What the Granger Administration has effectively done is that it has purported to bind succeeding parliaments for the next several decades, a rather weak or non-existent position from which to talk about economic emancipation.

To put some context and numbers to this infamy, it is important to understand that within ten years or so, eighty percent (80%) of Government revenue will be derived from a single foreign company which not only pays no taxes but which no Government can seek to tax for the next seventy years and more. Should new taxes become necessary, as for example, when there is a significant slump in the price of oil and there is yet no price stabilisation fund or mechanism in place, then those taxes will have to be paid by the 20%.

Slavery and its after effects

Three years after the famous discovery announcement, the Granger Administration has failed to ensure the local content requirements established by law or to pass a single piece of legislation pertaining to petroleum operations directly, or indirectly with respect to the environment, labour or other rights. Or to formulate a depletion policy, consider alternatives to the production sharing agreement or address its mind to a national refinery given the new and increasing volume of proven reserves. It is easy to chastise the uneducated, the limers and the school dropouts even as we ignore the systemic challenges and disadvantages which they face.

But neither the President nor any of the other Emancipation Day speakers even bothered to acknowledge the legacy of slavery and the savagery of the capitalist system which spawned and nurtured it, nor that many in their respective audiences are from poor and broken homes, lacking basic facilities and earning income which barely allows them to eke out a living.  

Even if these sound like excuses, what excuse is there for the leaders, the professionals, the politicians and the middle class to preside over an economy that only widens the income and wealth gap, pays an unconscionable minimum wage and does little to help the poor, the disadvantaged and les miserables? In an emerging sector of any economy, the State has a duty to set the right framework and tone for its medium and long term benefits to the country and its people. While not condoning liming and unemployment, it seems to me much more costly to have caused the country to endure some of the worst forms of incompetence in some of the highest offices in the land. 

Time to reset and rethink

The real benefits of oil, and let us face it, the range of other natural resources which we have always had, will only come when leaders stop talking down at those they lead and accept and discharge the responsibilities and obligations which come with their good status in life. We have always been blessed with great natural resources but have squandered it with poor leadership, weak vision, ineffective managers, a cavalier disregard for good governance, political patronage  and downright corruption. Oil gives us a chance to reset and rethink.

If the mindset of our leaders remains stuck in the past, conditioned by a warped view that the army of the poor have somehow chosen their lot and that persons are unemployed because they are lazy and do not want to work, then oil will not save us. And we have to go no further than our next door neighbour, Venezuela, to realise that even the largest petroleum reserves in the world are no guarantee of success.

Next week: The debate on direct cash.

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