THE OIL MONEY

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2055

The incumbent Administration radiates questionable seriousness about things they speak of with notable solemnity.

Though Hughes – who has now earned as much of a reputation for tendering a resignation as he has for defending a certain criminal element – can, according to some, be precisely measured with a short moral/integrity yardstick, the Kaieteur News interview with him a few weeks ago lined up with what many of us are thinking about the nation’s oil bonanza and the channeling of potential revenues.

For several months, the Government held Citizens Right To Know hostage by refusing to offer shareable details of a Production Agreement and all related contracts to both known and potentially existent oil wells.

And this government secrecy fomented understandable apprehension and due discontent especially since it was a solemn no- no on the campaign trail.

Then Minister of Natural Resources, Trotman, offered a puffered reason for the silence, with inferences along a spectrum of them doing what they had to do, preserving the good State of Guyana, the absence of military might, and the good fortune of the nation’s access to men like him with the requisite acumen of “legal prowess and diplomatic ability” to hide the details of the contract –we’re guessing.

The leaked document verifying Government’s full knowledge of a signing bonus, which, until then, had received some coy Government shoulder- shrugging, quickly reverted to full throated acknowledgment from the Government which then looked like its predecessor – a contract mill for national patrimony negotiated in secret and without requisite accountability and equivalent national benefit.

Not surprisingly, subsequent assertions to establish a Sovereign Wealth Fund and the publication of its Green Paper were received with skepticism.

The signing bonus having to be forced into the open was taken as foreboding. Anticipation of the much touted return to honesty and transparency died.

And confidence fizzled even more when terms came packaged in enough complexity to remain suspended above the average voter in a political environment that seems to think low information is strategy

To many, this reinforces general sentiment – the Governments of Guyana are contract mills for national patrimony which they negotiate with secrecy, without requisite accountability and equivalent national benefit.

Had Government decided to use this opportunity – the negotiating with Exxon for a better deal- to simultaneously educate the nation on political transacting and be an open broker it would have been in keeping with this Coalitions promise to “keep the people informed… not keep them in the dark…” they would have walked away with a Public Relations slam dunk.

And we’re not advocating a blow by blow account of the negotiation by any means. But when transparency and information are stifled and the public lacks fundamental access to what it’s government is doing in its name, people feel less involved in the act of citizenship.

What politicians fail to appreciate is that it is the Mission embodied in our Motto – which is not at all Utopian if Government works – the diversity embodied in Land of Six Peoples and Constitution Tenets like “Sovereignty belongs to the people, every person in Guyana is entitled to the basic right to a happy, creative and productive life, free from hunger, disease, ignorance and want…” that should be employed as a strength rather than weakness, a tool rather than a weapon in a political format that remains a mix of antique survivals and postmodern Tribal Leadership shrunk to fit the act of Governance that keeps division alive.

Hughes’ observation illuminates these things in an interview that is hardly mistimed or miscalculated…especially when one pegs it to the 34 vote majority he resurrected right in the nick of time … a theory that Ralph Ramkarran supported until he realized it would benefit a Government he was trying to defeat with his new Party ANUG.

A candidate whose excuse is “When I said that two votes were required for the no confidence motion to succeed, I was obviously wrong. I meant two abstentions.” …is hardly that beam guiding us from the lighthouse of politics.

The yardstick used to measure this Hughes, though short in the integrity department, is accurate when it calculates his cunning to position himself for incalculable benefits…they say.

Whatever the sentiment, the disease that causes Guyana’s economic battery remains virulent because its vectors remain directly or tangentially attached to politics.

The forecast had already been a 750,000 barrel a day pumping by 2025 worth $15bn a year at current prices, quadruple Guyana’s current Gross Domestic Product.

Two months ago the Hess Exxon project hit two more oil spouts…mo barrels..

The obscure administration of previous natural resource endeavors beggared the State and infuriates those who are tired of being short-changed by politicians.

This oil is going to be different, they pledge..

So Winston Jordan’s comment on the flow of petro cash tasted like a lard sandwich.

 “All the monies go to the SWF. Withdrawals from the fund will be in accordance with fiscal rules that will be embedded in the legislation and approved by Parliament. The amount to be withdrawn is then placed in the Consolidated Fund and appropriated in accordance with existing accounting rules.”

Maybe, if Constitution Reform delineates in “Charrandass- proof” terms what comprises Parliamentary quorum, SWF legislation is constitutionally encased and fiscal rules are protected by law that requires public knowledge before funds – the people’s wealth– is appropriated, there’ll probably be a few more amens and glory hallelujahs coming from the pews of the citizenry.

But the recitation of acronyms and the conjured flow chart of the intended movement of petro cash is seen as another effusion of jargon from politicians, whose reputation with government funds remains at limbo levels.

This time around, people are not only paying keen attention but are prepared to call things out at precancerous stages.

From their point of view, the control of Petro Cash is bound for a pipeline that doesn’t necessarily garnish rave reviews…to put it mildly and remain on the right side of sedition.

After the exposé that forced the confession of receipt of $18 million signing bonus, sentiment retreated to expectations of spectacular expropriations of public funds through the maze of private entities, the gifting of contracts and the movement of funds through a labyrinth of sieves …none of which trickle down, in meaningful quantity, to the population.

Now it’ll be a preemptive positioning of coordinated efforts to hold the government accountable, as the broad scramble for oil-bounty approaches fever pitch. They’ve seen this before with the milking of other natural resources in favor of outsiders and select insiders.

This time they’re ready. And they relay their vigilance with a compelling mixture of black humor and clammy pessimism that forfeit the sun on the horizon of gushing oil.

“The time has come to end winner-take-all politics, corruption, nepotism and the squandering of our resources,” Mr Granger said, they remind me, with the ferocity of the Pledge Police.

So he has to deliver.

Consensus opinion is that his decisions are the brain spawn of whisperer, confidante and first Nephew which ironically puts the Nepos in Nepotism and the fury in the infuriation of the self- appointed watch dogs who are totally unimpressed with the appendage, Yale ,that punctuates any statement in which he is referred to.

The Citizen/Activist who went to one of the nation’s premier schools back when premier had its literal translation, owns a few dredges and a solid four decades of mining experience, offered a comment about Nephew that would be better couched in the pages of Hustler Magazine.

But the meaning was clear.

Voters are scrutinizing the dysfunction by design. Politicians pledge reform then reform the pledge by perpetuating the thing that was to be reformed.

There was a lot of talk about integrity and wholesomeness during the 2015 campaign.

Men like the Educated Miner bought it but will not roll over and be ‘integritied’ when this flagrant nepotism is performing another act.

They are discomfited by Guyana’s ranking on the Corruption Indices a solid 93 out of 175 -180 countries and rightfully attribute that disreputable ranking to the people citizens elect to steer them from that number.

And now they are on the cusp of an oil gush they will eagle- eye the players in the oil- money line up.

The Ministers, Banks, Companies and all who will have ” a hand in the oil money ” are now under their microscope.

“We know the runnins’ …”

Unsurprisingly, the popularity of the Minister of Natural Resources is directly proportional to that of his rolling release of information on the signing bonus.

Whispers abound about the executive relationship he has with the granting of concessions and vending licenses to prospective small vendors- many of which, allegedly, he has direct stake in.

Look.

Guyanese could be forgiven for their skepticism. It is rooted in a succession of Government -failed promises and the acquisitions by Ministers and their agents during the course of their public service that will not pass a forensic audit.

So, the removal of the Oil Portfolio from Trotman’s Ministry of Natural Resources, some felt, was a public relations- albeit clumsy- move to silence the bullhorns announcing the closeness of the Minister to the various concessions and vending opportunities he and those close to him were, apparently, signing contracts for, word is.

And the ousting of qualified Industry stalwart, Dr. Jan Mangal, for a professional unrelated to the Industry, Economist Dr. Mark Bynoe sorta added wattage to the glare of the security spotlight.

The teaming up, too, of Bynoe with Matthew Wilks , a foreigner whose resume boasts service to a constellation of autocratic, despotic, kleptocracies – that needed the expertise of a consultant who felt comfortable enough with their profiles to offer them his services – is hardly an arbitrary move, many conclude.

This Administration, they remind us , ran on integrity and the restoration of morality.

So, why hire a Wilks, whose extended service to the sector is in Angola, Bolivia, Kazakhstan, Kenya, all of which were and remain oil rich corruption capitals which are poverty-ridden.

Who recommended him and why? How was he deemed fit? Why would this Government hire this comparatively blemished ‘expert’ for Guyanese who have entrusted them with doing right?!

These things are not without relatives.

On March 24th 2019, the Department of Information released an announcement headlined “Over $15.6B reaped from oil and gas sector thus far ….Residents urged to position themselves to the transformation to come.

We won’t quibble over the preposition ‘to’ after pronoun ‘themselves’ but we will ponder and out loud for an accounting of the $15.6 billion.

And, no. Not suggesting misappropriation but just curious- and under this government’s pledge for transparency- how it has been expended.

Explaining the trail of these billions would be the task of Minister of Finance, Jordan infamously remembered for his swashbuckling “Matters not if Guyana secured a good or bad deal, we got a deal…time to move on”.

Given the clannish secrecy that shrouded oil negotiations with the formidable Exxon back then, expectations of a robust deal were slight and Jordan, at least, cleared that low bar. He was the serious negotiator on a podium not overburdened by Accounting grownups.

But people like the Educated Miner have created a consortium of members who span a multiplicity of professions in which they are all either academically qualified or have industry knowledge.

They are citing genuine curiosity for the appropriation of this revenue.

They are watching the flow of the money and the players with a hand in it.

Moving along.

The Sovereign Wealth Fund Green Paper- policy document (pg 25 from 58 particularly) asserts that the Fund will be comprised of several local committees appointed by Government and overseen by the Ministry of Finance.

The immediate concern is that of overwhelming Government participation. The ultimate concern is the possibility of that mechanism of control falling into the hands of the PPP.

And along that spectrum is the fear that the fund will be pressured by its parasitic debtors- China, Russia and a closely following India – into investing in ‘suggested’ stock and other forms of paper. 

There is also escalating anxiety about the possibility of Merrill Lynch “expressing interest” in managing Guyana’s Fund.

In the Wealth Fund business, Merrill has the scandalous distinction of steering Korea’s fund to invest $2 billion into Merrill which then merged with Bank of America and lost 720 million of that country’s SWF.

Singapore was ‘advised’ to invest 900 million into the flailing Merrill for a rebate that was more bait than investment.

The point here is judicious decision making.

Officials may have noted that Bank of America, BOA, is now phasing out the Merrill Brand which has become too tainted – which will mean that its holdings could be turned over to BOA …of struggling reputation…which is bad news for a struggling Guyana.

That’s on the Wealth Fund end.

And with Guyana’s lean and dwindling choice of commercial banking options, there is much speculation about banking behavior in the age of oil, if ‘behavior’ rails aren’t encased in regulation with ‘give back’ stipulations, for example.

Currently, Republic Bank which has begun the acquisition of Scotia Bank according to that bank’s officials, would account for Republic Bank owning about 33% of Guyana’s financial assets…a whole third and it’s a commercial bank.

Bank of Baroda announced that it was looking for a buyer for it’s Guyana Inc. Branch, as of December 2018.

Demerara Bank has its drawbacks for a specific demographic, as cited and detailed in publication: Politicized Microfinance: Money, Power, and Violence in the Black Americas By Caroline Shenaz Hossein , who noted the mostly Indian Staff and the unlikelihood of loans to Afro Guyanese. Her thesis paper also underscores the plight of Afro Guyanese seeking loans from other financial institutions.

The Guyana Bank for Trade and Industry, a subsidiary of Secure International Finance Company, Inc., familiarly referred to as ‘Beharry Bank’ , is another bank with commercial services and it has just survived a Special Organized Crime Unit probe into a $5000 million ‘oil for rice’ deal with Petro Caribe because the Prosecutor bungled some dates.

Those are the choices on the Bank side.

And the support providers.

John Fernandes has received a multi million dollar shore-based support contract with Saipem, a key contractor for ExxonMobil. Last time we heard his employees- we’re assuming they’re Guyanese- were awaiting Foreign certification from Saipem.

Gafoor and Sons- Gafsons – has sold its riverside operations of Gafoors in Houston on the East Bank to Schlumberger the company contracted to produce a liquid for the oil industry.

Part of the Government’s responsibility in distributing the profits from resource extraction is Human Development …more directly in mandating a specific portion of jobs for ALL Guyanese with a supervised quota system in place….given the history of governments and enterprise in general marginalizing employment based on predetermined demographics.

Yes.

We’re deliberately presenting this in palatable fashion but we’re sure readers know exactly what we mean.

More operationally though, and unlike what we saw during the rape of the Forest for lumber by the Chinese of multiple conglomerates like Bai Shan lin, East Indians through Vaitarna, the Canadians through Sacre Coeur Minerals Ltd, the Russians through Rusal, Guyanese will be focusing on Government’s- and of any Party – policies to deal with the extractors. They will looking at the built in regulations for companies to respect Guyana, its laws, its environment and above all its labor force.

That would mean entities like Social Protection would have to be more than reactionary…standing by with food hampers for workers wantonly displaced by Russians … imprisoning and flogging some under the protection of diplomatic immunity and an embassy in the country.

Awash in concerns from the Educated Miner and his peers we pledged to remain in touch, promising to cover as much as they had cited and more over time.

But a couple of things came to mind.

Guyanese, generally, have an underdeveloped entitlement mentality which is bad only to the extent that politicians have conditioned them to be this way. They remain quietly discontented, grumbling, often inaudibly to the wrong people. The nation’s allocation of equity has been more calculated than careless and it’s a good thing that there are people like the Educated Miner and his peers now willing to correct the course of ‘quiet’ natural resource contracts.

And though the term is approaching its sunset, calls for the Coalition to keep its promise to release contracts that involve the proliferation of China into Guyana will remain robust if not boisterous.

This conversation may have started with the Hughes interview which some say was another one of his self-serving appearances but for us it yielded so much more.

We agree with his calls for legislative, regulatory framework for the oil industry. That should be and should have been standard practice with every extractive resource and especially with the complexity involved in foreign presence.

Such a document provides, too, for intersectoral connections and better coordination at community level to ensure that the framework is meeting its tenets.

And though we’re as concerned as he is about the slow roll out of the legislative framework, we’re asking that the spotlight for it be shared by the provision of the softer aspects of this venture into extractive resourcing.

Bai Shan lin was allowed to wreak havoc in places like Moblissa, damaging roads and bridges, dumping illegally at the expense of environment and flora.

Rusal maintained deplorable working conditions in insanitary and unsafe environments.

Vaitarna housed their employees under leaky rooves, with no electricity and no potable water.

And these three investors flagrantly failed to keep contracted agreements to employee set quotas of Guyanese and the construction of facilities for continued industry in those sector.

Why the Governments – both PPP and PNC remain mute, catatonic, under the abuse of these foreigners and on Guyana’s soil, must lie in the terms of the contracts they are making on behalf of Guyanese.

We have long called for access to Memorandums of Understanding Guyana’s governments have deen signing with these countries which subvert Guyana’s sovereignty on its own soil. We need to see what leases of patrimony have been granted, for example and why countries can act with impunity in disrespect of Guyana’s laws and Constitution.

It’s hard to claim progress through the arbitrary gifts of mopeds and military equipment from China when theirs is a reputation of imperialism by gift-diplomacy.

It’s hard too, for leaders to claim progress when Guyana’s economy remains the second weakest on the continent, maintains an unenviable ranking on the Corruption Perception Index, and a high debt -low growth percentage , amongst other makers of non success.

But with the discovery of oil and the potential to catapult economic growth from a meagre 4.6% in 2019 to a robust 30% in 2020 an be numbered amongst the world’s largest per-capita oil producers by 2025 there is an expectation for all of that to change.

That expectation will only become a realization if watchmen like the Educated Miner and Observers like ourselves remain committed to monitoring every elected government’s administration of oil revenue and its correlation to the elimination of squatting communities, improved drainage and irrigation, transportation infrastructure, the institution of a living wage and the establishment of a structured program to facilitate the transition to employment and skill-acquisition with the receipt of financial assistance for the temporary transition period…amongst other immediate developmental improvements.

No. I am not a fan of USD 5000.00 annually for every Guyanese.

As not-even-an-economist –that’s my title- I know the burden financial gifting can breed…and can discuss that in another publication.

But I am an unbudgeable advocate against politicians who have a reptilian interest in money.

Now.

Not that too many calls for a Legislative Framework are too many but one has to wonder why calls are still being made at this 59th minute when the Coalition pledged since 2015 that “a number of policies would be developed, and sector specific laws updated and drafted where necessary”, paid a Consultant Anthony Paul of Caribbean Association of Energy Specialist for a ‘study’, received advice from Advisor/Specialist Dr. Jan Mangal , a law firm was employed for the purpose and repeated expressions of concern by Hughes, a partner in the Law Firm that was employed to “monitor, advocate for best oil legislation, regulations”.

The advocacy by Hughes of the Law Firm for the law drew the usual winks and suggestive remarks from the team of Guyanese now committed to paying close attention to the oil money and the hands it will “pass through” and they added the Minister of Infrastructure, who seems to be losing his luster and admonished a statement he made a few weeks ago that was all air and no substance..

He’s been cited for a few other ‘improprieties’ that will not be addressed in this article.

All that said though, the call for a Legislative Framework, that began this discussion is absolutely vital and we share the urgency cited by the professionals and the Educated Miner and his WatchDog group.

We understand the importance of legislating drilling, environmental protection and solid agreements for equipment maintenance, drilling boundaries, taxes, salaries and other monies that will be expended to bring the commodity to surface.

But the softer aspects we mentioned above, those that have indirect impact, like the monies earned by service concessionaires like food vendors and hotels, as a result of oil employees spending and that spending trickling further in to the economy, like, for example, the number of jobs each direct industry job will support in other industries, add to commerce, are just as vital.

We agree that this level of forward planning cannot be explained away in some airy pronouncements and are virtually panicked when we see Government Advertisements, less than a week old, looking for assistance in this area.

We’ve seen this before -politicians act like they are running their own salt goods shop and as if they’re doing those with expertise a favor by hiring them.

This Legal Framework and its Cousin, the softer aspect, Indirect Impact, are the nuts and bolts of Guyana’s Oil Industry success and its achievement of the 30% economic growth for 2020.

Not so long ago , September 2018 to be exact, the Government promised to put in place a “world class petroleum sector ” a little after it said at its Party Congress that it won’t get intoxicated by oil …all spoken with what we assumed to be clarity.

Apparently, not so, given that in May 2019, there is still executive paralysis in establishing the vital Legal Framework.

More funny talk, we’re thinking…the tied-tongue thing.

Maybe it’s our fault for not knowing that politicians develop this affliction as an occupational hazard…that it becomes congenital when the promises made are inexplicably broken and the bold statements whimper off into the declarations museum.

Whatever….

We’d just rather and especially in this period of oil, when so much is riding on clarity to ensure that oil proceeds are filtered and not funnelled, we’d much rather NOT HAVE communications delivered with this political lisp.

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