I refer to a letter from the Junior Minister of Finance Jaipaul Sharma, in the August 17th edition of the Stabroek News, captioned “WPA’s nonsensical proposal for cash transfers comes on the back of the miserable failure of its members to deliver in the gov’t.”
First of all, these are two members of the coalition of parties called ‘A Party for National Unity,” (the WPA and the Justice for All Party), which along with the AFC forms a coalition to rule this country. Sharma is responding to an activist of the WPA by attacking the thoughts of Guyana’s most respected economist, professor Clive Thomas on the possibility of giving some of the oil money directly to Guyanese families. I am not supporting Dr Clive’s suggestion in this letter, my support will come after we have a full national debate and investigation of the matter. I do, however, question Mr. Sharma’s right to wage an open war with Dr Thomas in the media, and accuse one of his Government’s coalition partners of failing miserably to deliver anything in government because Mr. Tacuma Ogunseye, an Executive of the WPA, who holds no governmental position, apparently wrote a letter criticizing those who sought to discard, out of hand, the suggestion of Professor Thomas on one way to divide the oil money among the citizen, and labels it as nonsensical.
There is, as far as I can find, no international thinking that it is ridiculous to suggest a direct payment to the people of oil rich countries. In fact, the overwhelming evidence is that those governments which hoard this money within the government’s coffers, do so with very corrupt ulterior motives. For my point I will use one publication entitled, “Why Natural Resources Are a Curse on Developing Countries and How to Fix It” by Stewart M. Patrick.
For the record this article I refer to is located in an international journal of some repute and can be found at https://www.theatlantic.com/international/archive/2012/04/why-natural-resources-are-a-curse-on-developing-countries-and-how-to-fix-it/256508/ and the author “Stewart M. Patrick is James H. Binger senior fellow in global governance and director of the International Institutions and Global Governance (IIGG) Program at the Council on Foreign Relations (CFR). His areas of expertise include multilateral cooperation on global issues.”
In his article, Stewart’s contention is as follows; “of the many frustrations in development, perhaps none looms larger than the “resource curse.” Perversely, the worst development outcomes—measured in poverty, inequality, and deprivation—are often found in those countries with the greatest natural resource endowments. Rather than contributing to freedom, broadly shared growth, and social peace, rich deposits of oil and minerals have often brought tyranny, misery, and insecurity to these nations.”
You read that Mr. Sharma? Instead of wealth to nations it can bring tyranny, misery, and insecurity to the nations.
First of all the author states that “There are twenty-three countries in the world that derive at least 60 percent of their exports from oil and gas and not a single one is a real democracy” and warns that “easy resource revenues eliminate a critical link of accountability between government and citizens, by reducing incentives to tax other productive activity and use the revenue to deliver social services effectively.” The article also claims that, “The same
revenues also generate staggering wealth that facilitates corruption and patronage networks. Together, they consolidate the power of entrenched elites and regime supporters, sharpening income inequality and stifling political reform.”
Already the Guyanese people are very suspicious and agitated by what they see as a poor deal with EXXONMobil. And what you are doing is not helpful.
The article claims that “even when oil abundance produces high growth, it often benefits only a few corrupt elites rather than translating into higher living standards for most of the population. Oil-rich Angola is a case in point. Despite having one of the world’s highest growth rates from 2005 to 2010, averaging some 17 percent annually, its score on the human development index remained a miserable 0.49, and its infant mortality rate was higher than the sub-Saharan African average.” So at this point, the suggestion that we the citizens of Guyana agitate for a more direct share in the distribution of this wealth makes more sense than hoarding it in the national coffers to be dispensed to corrupt elite politicians, and their friends.
The article further warns “Finally, the very presence of oil and gas resources within developing countries exacerbates the risk of violent conflict. The list of civil conflicts fought at least in part for control of oil and gas resources is long. A partial list would include Nigeria, Angola, Burma, Papua New Guinea (Bougainville), Chad, Pakistan (Baluchistan), and of course, Sudan. Econometric studies confirm that the risk of civil war greatly increases when countries depend on the export of primary commodities, particularly fossil fuels. At least three factors could explain this correlation. First, the prospect of resource rents may be an incentive to rebel or secede. Second, wealth from resources may enable rebel groups to finance their operations. Third, the high levels of corruption, extortion, and poor governance that accompany resource wealth often generate grievances leading to rebellion.”
How does the article suggest that we avoid the pitfalls of such a situation developing here in Guyana they suggest the following “First, the donor community should extend the International Finance Corporation’s recently updated transparency requirements for extractive industries to all bilateral development finance. Second, the international community should work to build demand for accountability in resource-rich countries by providing grants to local civil society actors, so that they are in a position to monitor revenue flows. Third, major financial centers should agree to harmonize transparency requirements for extractive industries in the biggest stock exchanges, building on the Dodd-Frank legislation. Finally, the financial institutions that subscribe to the Equator Principles should “establish independent monitoring mechanisms” to ensure that their membership is actually living by these standards, rather than paying them mere lip service,” and “Finally, given the difficulty of winning global endorsement for all of these initiatives separately, the United States should push them as a package”. This basket of initiatives, if implemented, could give developing countries a fighting chance to ward off the resource curse.
Should we offer this money directly to the citizens as suggested? I don’t know, what I do know is that governing coalition partners should not be behaving in this manner in public.
And finally, I want to point out to Mr. Sharma that as far as criticisms of the functioning by its coalition partners in Government are concerned and the Guyana’s public’s perception of it, I want to add these words of caution “people who live in glass houses should not throw stones.”
I’m not even going to ask, if they have determined that the US$460 million EXXONMobil is demanding as pre-contract costs which we owe, has been verified?