Oct 28, 2020 Editorial
Kaieteur News – There is the famous passage in the Bible, in the Book of Ecclesiastes, Chapter 3, Verses 1-8, which begins, “To everything there is a season, and a time to every purpose under the heaven…” This paper’s recent investigations into and reporting on the feeding frenzy on the Kaieteur and Canje oil blocks have been met with praise, with skepticism, with silence and with cynicism. The logical answer, that we are only now been presented with information that should have been available long ago, does not of course suffice for the illogical.
In as deeply divided a society as Guyana is, uncomfortable questions posed at either one of the political camps earns you the enmity of that camp and its followers, and we have been – admittedly viciously – been asking extremely hard questions of both camps. What this newspaper has been engaged in is the critical public service of interrogating economic deals done supposedly in the country’s best interest but with all indications pointing in fact to the contrary.
A recently released reported by the Institute for Energy Economics and Financial Analysis (IEEFA) expands upon what we already have already known about how terrible the Exxon deal has been and will be for Guyanese. Written by IEEFA’s Director of Finance, Tom Sanzillo, the report’s lengthy title should be message enough: “Guyana’s Oil Deal: Promise of Quick Cash Will Leave Country Shortchanged – Long-term Costs Far Outweigh Benefits as Oil Industry Declines.”
The 31-page document outlines how, at least for the next five years, our deal with Exxon will leave us not with some bounty of oil wealth but with a sum debt to the oil companies, resulting in Guyana having to borrow money in order to handle budget deficits. This means that as our oil keeps flowing and keeps Exxon – besieged almost everywhere else it operates – afloat, Guyana will be no more self-sufficient than we were without oil. For example, the report notes that in our tax arrangements with Exxon, we will be forfeiting US $653 million over the next five years.
While the report will be explored in our reporting over the next week, one particular line of it stands out, justifying, we believe, our editorial stance, our civic campaign, over the past few weeks:
“When there is a promise of more revenue, hopes for long-term fiscal solvency can appear to be in reach. This is also a time for public questioning.”
That is what we have been doing, through reporting carried out with at times ecclesiastical zeal, through front page commentary, and through our editorials, a public questioning of the pending oil developments, before a single drop of oil is brought up in the Kanuku and Canje blocks. The IEEFA report notes sensibly and soberly in its conclusion:
“Is the amount currently being received the right amount, all things considered? Are the corporations making promises of future revenues capable of producing those future revenues? Are there conditions on the receipt of revenue—factors within the control of government and outside the control of the government? What is known about those objective conditions today and what do they say about the future? How are the new resources to be used? What are the limits? These are questions that are ultimately of a political nature and cannot be answered by an exercise like that conducted by IEEFA. They are questions nevertheless that must be answered.”
We will continue to ask them until the wall of silence is finally broken and those questions are finally answered.
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