Is oil best for poor people?

In present day Guyana, hardly a day goes by without some mention of oil. Long rumured to have untapped oil potential, 2015 marked the year that would set Guyana on the path of becoming one of the top producers of black gold in the Western hemisphere. Existing in relative obscurity over the years, the significant oil finds that represent 15% of conventional global oil discoveries, plunged Guyana full frontal into the international scene. Leading news platforms across the world have been building certain mysticisms around our nation and its unlikely windfall. As the feature articles on Guyana grow longer and more frequent, we will find ourselves fighting a battle against perception and elements of colonial journalism. Our seeming unpreparedness for the oil & gas sector, an unstable political state matched with rife social underdevelopment and inequalities are the narratives that usually take centre stage. These are not surprising narratives given global over-reliance on oil, and our ripeness for international investors who might consider us easy pickings.

There is no denying it; our response to the oil sector has been bumbling at best but we do seem to have an enthusiastic approach. Our marriage to the oil sector continues to be celebrated with much ironic pomp. Visions of a green economy and a nation free from the perils of extractive industries wither away into empty speeches to be recycled, whenever the question of our green state arises. As Guyana forms more and more alliances with big oil companies staking their claim in our land of many waters, there will of course be a compounded shift of focus from environmental protection & conservation to economic value of oil as we have already begun to see.

There are a few working models of countries that have successfully managed the oil industry in conjunction with a green state focused on environmental protection and conservation. But these countries in doing this had to make several hard decisions over projected economic growth of the country versus the implications of oil exploration or drilling on their environment. Norway is one of these countries. Only in April 2019, Norway stopped oil exploration in their Lofoten Islands area due to environmental concerns. I am dubious as to whether our Guyanese leaders would ever dare to say no to big oil. With climate change grimly making its presence known and corporations being the driving force behind our rapidly warming Earth, we have to be cautious about the alliances that we make. Government seems unconcerned with Exxon’s history of oil spills, human rights abuses and the funding of climate change denials. There seems to be no stopping the cozy relationship Exxon and other oil companies now have with the government, money after all is the talk of the town. The future is here and the future is oil.

 While there are few examples of countries managing their oil and environment sustainably, there are many cases and documented studies on countries in which the Dutch disease ran amok, causing widespread environmental degradation and inequality. We do not really know which way the tides will shift in Guyana but the prospects do not look all that promising from a certain vantage point.

Politically, we are in a very vulnerable position. Election season is here and anxieties exist over who will be the ones managing the first returns from oil in 2020. The threat of the return of the People’s Progressive Party/Civic (PPP/C) looms large, causing many to wonder whether the coalition’s 2015 victory was just a blip in the radar of the rule of the PPP/C. It is a valid concern given the implications of a possible return to widespread corruption, race driven practices, nepotism and state- sponsored killings. The current caretaker government is a far throw away from the promised liberation from the autocracy we have come to know over the years and their performance has been lacklustre at best. It is tragic that we only seem to have the options of choosing between: murderous corruption and lethargic inefficiency, but apparently that’s all we get for now. 

I hope the people win. In all of this, I hope the people of Guyana can come out of this better off not only economically but also socially. Expectations of returns on the ground are low but politicians in an attempt to enamour persons with the idea of oil have been spinning tales of prosperity right on the horizon. Minister of Natural Resources, Raphael Trotman even made the grand claim saying that it is not a matter of whether you will be rich but a matter of how rich you will be. In a country where average people can hardly afford to maintain themselves, these promises paint a rosy picture of our future with oil. Meanwhile, Country Manager of ExxonMobil, Rod Henson recently warned Guyanese to temper our expectations with regards to oil.

There has been a lot of speculation over how the oil monies expected to start flowing in 2020, should be spent. Chief amongst those are the government’s intimations to focus on the health and education sector, infrastructural developments and of course, the talk of cash payouts. There is absolutely no reason why all of these issues cannot be worked on in conjunction but there has been a lot of pushback on the latter suggestion, with politicians quickly disregarding the idea. Concerns were raised that such an arrangement is easily susceptible to abuse and corruptibility given the very real possibility of cash payout promises being used as an election gimmick in the coming years. These are valid concerns given the potential to push existing racial and ethnic disparities in the country. There are also concerns that provision of money would be akin to giving persons fish instead of teaching them the art of fishing and that the money will not be properly managed. While we should always be wary of ideas that tout dependency as a fix-all, we should not so quickly do away with the idea of cash payouts. This is of course something that should be properly structured, ensuring that poor persons are the ones benefiting from this.

Regardless of what capitalist handbook you abide by, the fact is that poverty is a driving factor behind many of our social ills and money has the capacity to alleviate and/or temper many of them. Money means increased access to food, education, life experiences and opportunities. How come it is always the people with money who know what is best for poor people?