Introduction
Last week’s column wrapped-up my effort to overcome the failure after seven consecutive years of weekly assessment of Guyana’s emerging oil and gas sector to devote even a single column each to Hess Corporation or CNOOC Nexen Petroleum Limited, which share a working interest of 30 percent and 25 percent respectively in the Exxon Mobil-led Consortium operating under the Stabroek Block’s PSA, the only crude oil producing exporting entity to date. As it turns out, two considerations make this fortuitous.
One of these is contingent in nature; and, the other is likely a logical/structural imperative intrinsic to the ongoing analysis. The contingent consideration is that over the past seven years I have reported on the treatment of oil and gas in the National Budget as close to its annual release as feasible. Secondly, the landscape of Guyana’s political economy has changed dramatically; and I have a professional responsibility to 1] match analysis with reality, and 2] eschew disinformation and misinformation. The National Budget must therefore be framed in its correct form.
The logical/structural imperative requires a matching level of analysis. To be sure, the required level has now become wider in scope and conceptualization, as well as deeper in its precision and treatment of where Guyana is presently located in its national, regional, and global spaces. This requires a methodological upgrade.
Method upgrade
Over the years this series has relied principally, on what may be labelled as standard or orthodox text book-type micro economic, meso economic and macro-economic methodology for analyzing Guyana’s emerging oil and gas sector for what I believe are good reasons. These reasons centre on my judgement that standard economics is ruthlessly intolerant of noise and nonsense and its recurrent trades in misinformation and disinformation. Confusions of credit with debit, getting with spending, accounting cost with economic and opportunity cost, accounting profit with surplus, nominal with real prices, income, consumption, interest and exchange rates abound; testing one’s patience and tolerance. Standard economic theory is consistently unforgiving and impatient with fake presentations.
Going forward I reference in the next Section three concepts that I have previously introduced in this Sunday column over its many years; namely, extractivism [as in natural resource extraction]; Petro-state [as in petroleum dependent economy] and happenstance [as introduced by me early last year].
Three key concepts
These three concepts were introduced by me into the Sunday columns at very different periods of time. The first, extractivism, was introduced in my analysis of Guyana’s extractives sector, forestry. This analysis immediately preceded the start of the present series of columns on Guyana’s oil and gas following the petroleum discoveries of September 2015.
Extractivism
Going forward I employ the concept of extractivism based on standard definitions offered in general or specialist dictionaries. My only specificity lies in determining what constitutes the extractives sector in Guyana. Thus, Wikipedia defines the term as “removal of natural resources for export with minimal processing”; an economic model common throughout the developing world, Coined in Brazil [1996] as “extractivismo” it described the country’s private exploitation of forest resources.
As in Guyana several actors are involved in natural resources extraction including local governments, local communities, local investors, foreign companies, foreign governments; but yet extractivism is most often led from abroad.
Definition
As noted the concept emerged as extractivismo to describe resource appropriation for export in Latin America. Scholarly work on extractivism has since applied the concept to other geographical areas and also to more abstract forms of extraction such as the digital and intellectual realms to finance. Regardless of its range of application, the concept of extractivism may be essentially conceived as “a particular way of thinking and the properties and practices organized towards the goal of maximizing benefit through extraction, which brings in its wake violence and destruction”.
Neo-extractivism
Neo-extractivism has been promoted as a development path in which raw materials are exported and their revenues are used to improve people’s living conditions. The transition to neo-liberal economies is rooted in a nation’s subordination to an emphasis on free trade. In contrast to older forms of extractivism, neo-extractivism regulates the allotment of resources and their revenue, pushes state-ownership of companies and raw materials, revises contracts, and raises export duties and taxes. The success of neo-extractivism is debatable as the communities at the sites of extraction rarely experience improved living conditions. More commonly, the people at these sites experience worsened living conditions, such as reportedly in the cases of extraction from Indigenous communities in Canada. Neo-extractivism has similarities to older forms of extractivism and exists in the realm of neo-colonialism.
History
Extractivism has been occurring for over 500 years. During colonial times large quantities of natural resources were exported from colonies in Africa, Asia and the Americas to meet the demands of European centres. It is a result of colonial thought which places humans above other life forms. It is rooted in the belief that taking from the earth will create abundance. Indeed several Indigenous scholars argue that extractivism opposes their philosophy of living in balance with the earth and other life forms in order to create abundance. Leanne Betasamosake Simpson, a Michi Saagiig Nishnaabeg scholar and writer, compares these ideas of destruction versus regeneration in her book A Short History of the Blockade. She references the Trent Severn Waterway, a dam in Canada that caused major loss of fish, a major source of food for her people. She quotes Freda Huson in saying, “Our people’s belief is that we are part of the land. The land is not separate from us. The land sustains us. And if we don’t take care of her, she won’t be able to sustain us, and we as a generation of people will die.” She also defines extractivism in another work, stating it is “stealing”.
Conclusion
Next week I continue discussion of the three concepts.
