Govt failing to include poor, working class in oil and gas plans – economist
…says industry shaping up to favour exclusive, elitist club
An economist, trained in macro-financial planning believes that Guyana’s oil and gas industry is shaping up to be one that will see only the elite, rather than the working class and the poor, benefitting from the oil wealth.
This view was expressed by economist Sase Singh, who on Monday noted that Government has so far failed to produce plans that meaningfully cater to include the majority of Guyanese and their interests into the benefits of the sector.
“The current modus operandi in the incoming Guyanese oil industry will affect how the poor and the working class respond to it. Today across Guyana, this oil industry is seen as an elite project. It is seen by the population as those guys in suits who jet off to Houston to strike deals for themselves,” Singh said.
“The question on the minds of many single mothers and housewives remains – what is in it for me and my children and my family?”
He noted that the remaining hundreds of thousands of Guyanese are trying to come to terms with the reality that very little of the oil wealth will flow directly into their pockets. He likened their feelings to the feelings that drove the rural workers of the United States who threw their support behind President Trump.
This situation brings out the stark reality that has plagued the nation for generations – the breach between the “haves” and the “haves-not”. This sense of inequality in Guyana has never been worse and the perception is that these oil investments will only make it worse for the working class.
“Firstly, Team Granger with their heavy doses of policy paralysis played a major role in setting the scene to widen this disparity between the two groups. Take for example the re-negotiation process on the oil agreement. There was no scope for the social engineering of the revenue to better impact a wider cross-section of Guyanese.”
“When the mathematics is done, Guyana will have no more than 8 per cent of the revenue from these oil investments in the first 4 years. Without a plan, all of this money will be in the hands of politicians who do not have a history of doing what is best for the Guyanese people. For example, when the US$18 million sign-on bonus was provided, it was hidden from the people. Why would you hide information that should be shared with the people?”
Singh warned that the ordinary people have no interest in empty platitudes like the illusionary “good life” but that they want answers to the tough questions, such as what is in it for them and their families. According to Singh, any responsible Government must have adequate emotional common sense to create the framework to engage, re-connect and collaborate with the people to ensure some of these risks are mitigated and that some dollars are reserved exclusively for the poor and the working class.
“That is why I put forward this proposal that 20 per cent of the oil earnings payable should be reserved as cash vouchers allocated directly to all the people who are registered on the Guyana Revenue Authority and National Insurance Scheme systems.
The economist urged that these cash vouchers should only fund deposits to an escrow savings account that can only be accessed to buy new homes, pay mortgages, repair said homes, fund education expenses, healthcare expenses, purchase of hybrid and green motor cars, or bicycles or boat engines, purchase of solar panels, and even purchase of shares in publicly traded companies.
“The idea is that this oil money must work for all Guyanese families not just the one per cent atop the pile. The remaining 80 per cent of the cash should be split evenly between the Sovereign Wealth Fund and the mega infrastructure projects as identified in a National Development Strategy (NDS) similar to the one developed with the help of the Carter Center in 1994.”
This NDS, he added, should be developed jointly by the Government, the Opposition and civil society. This NDS shall be committed to by law so that if there is a change of Government, it cannot be de-funded because of partisan political reasons.
Some transformative projects Singh suggested were the Amaila Falls Hydro Project, which he noted would bring low cost and reliable electricity. He also suggested the paving or railing of the transportation link between Linden and Lethem, which he said would connect to a newly built Deep Water Port to facilitate more Brazilian containers destined for the world.
Another suggestion was the construction of an Oil Refinery, which would create hundreds of new jobs to refine Guyanese oil for the Guyanese and Caribbean Community (Caricom) markets.
“With more than 60 per cent of the population under 40 years of age, it is hoped those who are reading this publication properly understand the consequences for pretending it is business as usual. For Guyana’s sake, I am hoping for good sense to prevail on all fronts,” he said.