Guyana — High-stakes March 2 vote will decide control of Guyana’s new oil wealth

 — By MOHAMED HAMALUDIN

If there was any lingering doubt as to why the Guyana government tried every available tactic to stall for more than a year the holding of elections after being defeated in a no-confidence vote, the answer came on December 20.

That is when ExxonMobile and its partners started pumping oil from recently discovered offshore fields. The tanker Yannis P set sail a month later with one million barrels of light crude bound for a United States-based refinery owned by ExxonMobile. With that shipment, Guyana finally realized a 75-year-old dream of finding oil. About a month later, another tanker, the Cap Phillippe, left with another million barrels of oil – this time belonging to Guyana as its share of the output.   

With a 16th discovery of oil offshore, Guyana’s proven reserves total more than eight billion barrels and output will top 750,000 barrels a day by 2025. “Guyana, with a population of less than 800,000, may end up producing more crude per person than any other country in the world,” World Oil reported. Oil will bring in about $270 million this year, rising to $5 billion annually by 2025 and $10 billion by the end of the decade, according to Rystad Energy — in a country whose gross domestic product is about $4 billion.

These developments, coming weeks before the March 2 general elections, provide President David Granger’s A Partnership for National Unity (APNU) party and its coalition partners an incalculable campaign windfall. As some 660,000 Guyanese get ready to vote, Granger can rightly claim the oil started flowing during his watch.

It is not difficult, therefore, to understand why the government used all means available, including a weird numbers game and all legal avenues, to avoid resigning after losing the December 21 no-confidence motion and holding elections within 90 days. That, and the time needed to prepare the voters list, extended the government’s life by 14 months. ExxonMobile and its partners provided a further boost by starting to pump oil months ahead of the projected schedule – and in time for the voting.

Oil, meet ballot.

But whether this assures Granger’s re-lection remains to be seen. Even before the oil started flowing, there were complaints that the oil agreement heavily favors the companies. The United Kingdom-based Global Witness says Guyana will lose up to $55 billion from the deal which includes a two percent royalty and a 50 percent profit share after the companies recover their costs. Further, an ExxonMobile official, Brooke Harris, “wrote the Cabinet memorandum that Minister Preview (opens in a new tab)of Natural Resources Ralph Trotman presented to Cabinet for its approval of the controversial license,” Stabroek News reported.

The government said it “sees no justification to the suggestion that the 2016 Petroleum Agreement is an improper contract.” But Ifran Ali, the opposition People’s Progressive Party (PPP) presidential candidate, said his party will “review” it if elected. There have also been complaints about a lack of transparency over the oil deal. Kaieteur News reported that ExxonMobile announced the oil discovery one day after the government awarded the license.

Other concerns have included the absence of legislation and regulations to govern the oil sector and while Parliament approved the Natural Resource/Sovereign Wealth Fund Act, the opposition and the Private Sector Commission have not named representatives to the enabling committees.

Just how much such issues are weighing on the minds of Guyanese voters is not clear but Stabroek News reported that “poorer Guyanese” want an “immediate-term poverty-alleviation response.” Clive Thomas, presidential advisor on Sustainable Development and State Assets Recovery at the Ministry of the Presidency, has called for every household to be given US$5,000 annually starting in 2025. His recommendation “appears to have secured … much traction among ordinary Guyanese,” Stabroek News said. And, of course, a promise of free money could be a strong vote-getter.

The major parties have not embraced the Thomas plan. Reuters reported that the closest they have come is a proposal by the ruling coalition to distribute cash “for the purchase of essential items” and “conditional cash transfers” for single parents, public transit and elder care” – in a second five-year term. The PPP supports “targeted cash transfers,” also to help the elderly, as well as children and the poor.

Guyanese have traditionally voted along racial lines, mainly for the PPP, whose supporters are mostly Guyanese of Indian descent and comprise around 40 percent of the population, and the Peoples National Congress (PNC) – now APNU — whose supporters are mostly Guyanese of African descent and are around 30 percent of the population. The government has periodically comprised a coalition, especially when headed by the PNC/APNU, because, although the PPP has a built- in racial majority, Guyana’s proportional representative electoral system, in place since at least 1964, awards parliamentary seats based on the number of votes a party receives, not which party wins a majority.

Whether the advent of billions of dollars in oil wealth will change that dynamic and push race to a back seat in deciding which party will be the better steward of the nation’s new wealth remains to be seen. Perhaps the elections may even result in a historic coalition between the PPP and PNC/APNU. It could happen.

Mohamed Hamaludin is a Guyana-born journalist who  worked for several years at The Chronicle in the 1970s and on publications in the Cayman Islands and Turks and Caicos Islands before emigrating to the United States in 1984 where he worked at The Miami Times, the Miami Herald and the South Florida Times.  Though now retired, he writes a commentary every week or two for The South Florida Times (sfltimes.com) in which the above column first appeared. He may be reached at hamal1942@gmail.com.

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Comments

  • michael hawkins  On February 28, 2020 at 4:54 am

    Ah this thing called Power.

    guyaneseonline posted: ” — By MOHAMED HAMALUDIN If there was any lingering doubt as to why the Guyana government tried every available tactic to stall for more than a year the holding of elections after being defeated in a no-confidence vote, the answer came on December 20.”

  • brandli62  On February 28, 2020 at 7:36 am

    I believe that Mohammed Hamaludin’s commentary portraits a rather biased view about the Granger government and their achievements. For example, there has been a significant reduction in the corruption level in Guyana, which has been acknowledged by Transparency International. This was also evident to me as a visitor in Guyana in October 2018.

    The delay in setting the election date is attributed to 1) legal issues revolving the lost confidence vote that had to be resolved by the courts; and 2) the organisational issues regarding the general elections. For my taste, I would have preferred a more carefully compiled and fully verified list of eligible voters. This process was repeated blocked by the calls of the PPP to have the elections scheduled as soon as possible. Why would one not want the voter lists to be complete and verified in light of the most important election the nation is facing since independence?

  • Clyde Duncan  On February 29, 2020 at 9:17 am

    THE ECONOMIST:

    Guyana has the world’s third-highest suicide rate and the highest rate of maternal mortality in South America.

    Two-fifths of Guyanese live on less than $5.50 a day. Yet South America’s third-poorest country also has vast oil reserves — more, per person, than Qatar or Saudi Arabia.

    The oil has started to flow, and the economy is about to be transformed: The IMF expects it to grow by 85% this year and by 2024 income per person could rise from $5,000 to $19,000, nearly the same as in Poland.

    That makes the stakes in the general election on March 2nd especially high.

    Voting is likely to follow ethnic lines, as usual, with Afro-Guyanese backing the governing coalition and Indo-Guyanese the opposition People’s Progressive Party.

    Racially charged politics may prevent the creation of a much-needed national consensus on how to manage the new riches — but parties representing mixed-race and indigenous people hope to hold the balance.

  • Trevor  On March 4, 2020 at 10:38 pm

    The PPP is securing a future voter base from India and Sri Lanka:

    https://www.stabroeknews.com/2020/03/04/news/guyana/sri-lankan-men-fined-for-illegally-entering-guyana/

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