The national conversation at this time should be shifted. Too little attention is being paid to the ongoing rape of Guyana’s natural resources by multinational corporations.
These companies come to Guyana, woo our leaders, extort massive duty-free concessions – often uncapped – plunder our bauxite, gold and timber – and leave the country poorer than when they arrived.
What is Guyana obtaining for the generous tax concessions which are being handed to foreign companies? Where are the jobs; where are the corporation taxes? Where is the development of communities around these investments; where is the returning foreign exchange earnings which are needed to strengthen the Guyana dollar?
These things are not happening. Guyana is being taken to the “cleaners” by these foreign firms. And when they leave, they leave behind problems which taxpayers have to find monies to resolve.
In the sugar industry, Booker Tate timed its exit perfectly – well, they were pushed out. But after receiving hundreds of millions of dollars in fees, they were unable to bring profitability to the sugar industry. And this was during the period when preferences were still in existence.
The Omai Mines was said to be the fabled El Dorado. The company exported close to 2.5 million ounces of gold, flew in KFC chicken from Georgetown to its mine site and never showed a profit in all its years in Guyana. And Guyana sat and accepted that. Then the country had to deal with the worst environment disaster in Guyana when one of company’s tailings ponds, with cyanide-laced waste collapsed.
The bauxite industry has had its fair share of carpetbaggers. Companies have come and gone. They have extracted millions of tonnes of our ore and yet the industry is struggling. Massive craters are what are left behind when the bauxite is extracted. There is no environmental levy to help Guyana repair the damage after the companies leave.
First oil is soon to begin. But even before a single drop is pumped, the country has been shortchanged by the signing of a dubious contract. The foreign companies involved have been granted generous concessions. Local content legislation, which should enable locals to benefit from the industry is being proceeding slower than moving molasses.
Even more shocking is that the gas resources are effectively at the discretion of Exxon. It is they who will decide whether they will inject it back into the wells or allow it to be brought to short to provide cheap energy.
Exxon is sitting on six billion barrels of oil reserves. And all our expert negotiators got as a signing bonus was US$18M even less that what the struggling sugar industry earned in foreign exchange two years ago.
Guyana has not had a good experience with foreign multinationals operating in the extractive sector. Guyana has been bled dry by these companies which when they fold up leave hundreds of workers without jobs. The reduction or end of production hurts economic growth.
The downscaling of gold production by some of the major foreign gold mining companies is not likely to be compensated by higher declarations from local miners. As such, Guyana can expect a shortfall in economic growth this year.
This is not good news as the nation prepares for first oil. But even with first oil, the conversation needs to be shifted.
Some political parties are counting their chickens before they are hatched. They are busy trying to determine how the oil revenues are going to be spent. They seem unperturbed at the ‘highway robbery’, which has taken place as a result of the agreement which was signed in 2016 between the government and Exxon Mobil.
They seem unbothered by the massive concessions, which have been gifted to the oil companies. They hardly seem perturbed by the fact that in one instance even the scandalous 1% royalty to be paid can be reclaimed.
Guyana is shouldered by unverified pre-contract costs. And the country lacks the resources to effectively audit these costs, despite the fact that it is pretending to do so.
The time has therefore come for the national conversation to be changed. The time has come for the conversation to be about placing a moratorium on the continued give away of our natural resources. The time has come for a discussion on the mandatory renegotiation of all the contracts with foreign multinationals within the extractive sector.
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