Roiling…

…the oil funds

Back in the day, when the sugar industry came into a windfall through a spike in world prices, the PNC Government imposed a levy that scooped off all profits – but promised to invest it in the country’s “development”. But in so doing, they prevented the industry from replacing its aging factories – which then were run into the ground. And creating the crisis they’re now in.

Your Eyewitness brings this up not to beat up on the PNC – but to remind their successors in office that the road to hell is paved with good intentions. Burnham really thought the hydro project up the Mazaruni was for the benefit of the country. But he didn’t involve anyone outside of his tight little PNC circles and when a series of unfortunate events followed – Guyana “lost corn and lost husk”. Over half-a-billion dollars went down the tube – along with the dreams of sugar workers when they couldn’t receive profit sharing for the next quarter of a century.

And this is where history seems to be repeating itself with the oil revenues that are supposed to be coming down the pike starting in 2020. PM Nagamootoo assured an oil and gas forum earlier this week that Natural Resources Minister Raphael Trotman assured HIM that Guyana will be launching a Sovereign Wealth Fund (SWF) into which all revenues will be funnelled. After all, Trotman had been soliciting advice from the Americans, the Canadians, the British and gosh knows who else. And they all emphasised the funds have to be sequestered, invested and deployed in strategic investments for the benefit of future generations. So far so good – so can we can hope they won’t blow the money and just leave Guyana with hydro , again?!

Trouble’s signalled when we read the fine print of the plan they’re revealing piecemeal. We discover the Government will be using moneys from the Fund to fill budgetary gaps – through the first of the three “sub-funds” to be established: 1) Stabilisation Fund, 2) Infrastructure and Social Development Fund and 3) Citizens Participation Fund. Through this subterfuge, the Government will spend whatever they want on all sorts of boondoggles like they’ve been doing since they came into office – and then say they need money from the SWF!

So much for saving for future generations!! To make matters worse, this Eyewitness has been insisting the Government’s counting chickens before they’re hatched. Just yesterday the Chronic headlined oil being at US7/pb in 2020! Maybe the Cabinet could invest their salaries in oil futures!!

But even if oil were to make profit, it’ll all be frittered away. That’s how these fellas think.

…the Border controversy

Just as your Eyewitness predicted, the Venezuelans have signalled they’re not going to go easily into the night on the border controversy they created back in 1962. The new Good Officer of the new Secretary General of the UN had said very clearly if his mediation doesn’t lead to a settlement by year end, he’s sending the controversy to the World Court. Now this is a big victory for us – since this is what we’ve been demanding and Venezuela’s been resisting.

Going by previous rulings on similar border issues brought to the World Court – they’ve shown no inclination to change borders fixed over a hundred years ago. That’ll be opening up a Pandora’s Box in so many countries that we might as well close down the UN! In our case, we have an open and shut case and that’s why Venezuela will avoid the World Court like the plague. Guyana should avoid roiling the waters and just wait the Venezuelans out.

Time and the tide – not to mention the US – is on our side!

…forex markets

Just when businesses thought the forex markets was safe, up comes the new PNC-led Government bringing back controls. By another name.

We all know where we’re headed, don’t we? Economic ruination.