January 23, 2018

Guyana entered into crucial negotiations in an almost casual manner

Dear Editor,
Writing in 1968, Gordon K. Lewis, historian and political scientist, described Guyana as “a fascinating complex of strident paradoxes”. The events of the last few months serve as an apt illustration of this diagnosis. First, there was the signature bonus, held in secret for the purpose of underwriting a legal defence in our border dispute with Venezuela. Then the festive season began with the largest retrenchment of workers in living memory, with no coherent plan for their immediate welfare or future employment. Finally came the public release of the revised agreement with ExxonMobil, a revision which shows all the foresight of a blind date (though the timely announcement of another promising new prospect offshore may help to lubricate its reception).
For some, these events merit little more than a collective shrug. For others, they raise multiple alarm bells. It is perhaps no coincidence that, writing a generation ago, Lewis also discerned “the disintegration of national consensus” to the point where “the constituent elements of the national debate…are seen by the opposing sides in completely different ways.”
One wonders what Lewis would have made of the proposed ‘miniaturisation’ of the sugar industry and Guyana’s faltering first steps towards a petroleum-based economy. His book, The Growth of the Modern West Indies, depicts a scenario where “the mammoth Bookers organisation penetrates into almost every nook and cranny of the Guyanese economy and the Guyanese communal psychology alike.” Lewis gives multiple examples of this syndrome and its symptoms. A few will suffice:
1) A weak state, he notes, is no match for a robust multinational: “in the absence of government planning, lines of development were left to the sugar interest.”
2) At its zenith, Bookers claimed to control, directly or indirectly, the lives of some 80% of the population. It was, Lewis writes, “a veritable state within a state… an almost separate sovereign kingdom, undertaking and controlling an extensive set of essentially public services which the political state, for want of organisational skills and capital revenue, was unable itself to provide for its citizens.”
If some now find the shackles of the sugar industry burdensome, they would at least concede that, after several centuries of cultivating sugar, we have sufficient skills, the infrastructure and the labour in place to support the industry. What do we know of oil? This is an industry in which we have no experience and precious little homegrown expertise. Our record, to date, in deliberations with major players like ExxonMobil displays these deficits. We began by awarding them 600 blocks instead of 60 (in contravention of our own laws). The 2016 revision has failed to address this; and as several analysts have shown, is deficient in many other respects.
There has been some talk of ExxonMobil going out on a limb for Guyana, and of the need for us to show some sort of gratitude for this. ExxonMobil is a business with a current market capitalisation of US$367 billion. It has over 73,000 employees and about 2.5 million individual shareholders. As its former head, Rex Tillerson, explained about a decade ago: “We spend (US) $1 billion a day just running our business.”
The writer Steve Coll shows how, across time and space, ExxonMobil has carved out a succession of ‘private empires’ by being better informed, better resourced, and more organised than the governments it deals with, both in America and abroad. What exactly is going to make Guyana the exception to this pattern? It will take a lot more than bluster and rhetoric.
We are willing to mothball substantial chunks of an existing industry that employs a large portion of our rural workforce with only vague plans afoot for alternatives. We have set aside US$18 million to defend our borders in an international court. Yet we entered crucial negotiations with a petroleum giant, with billions of dollars of revenue at stake, in an almost casual manner. We lacked preparation and expertise, missed vital opportunities to correct earlier errors, and accepted terms and conditions that may constrain us for decades.
Was there a lawyer present in the negotiating team? Was there anyone with expertise in the petroleum industry, geology, economics, accounting? Whose data were we relying on for our assessments? Were any analyses and forecasts produced to guide the negotiators?
Guyana clearly has a tendency to cultivate a certain sort of relationship with large multinationals. Does anyone note the parallels between Bookers and Exxon? Does anyone see how this story is likely to unfold? Are we all asleep at the wheel?
Yours faithfully,
Isabelle de Caires