South American nation Guyana: Oil and Politics


South American nation, Guyana, Orinoco belt, guyana crude oil reserves, PricewaterhouseCoopers, Exxon Mobil, crude oilAs the 750,000 strong nation recognised the magnitude of the discovery of over 8 billion barrels of crude oil reserve, the country began to garner international attention.

By Aparaajita Pandey

In 2015, Exxon Mobil discovered crude oil reserves off the shore of Guyana for the first time. In geological terms, one would say that the country is a part of the Orinoco belt. The Orinoco river basin is the same geological region that gave Venezuela its crude oil reserves. In December 2019, Exxon Mobil made its first harvest of crude oil from the Guyanese waters and Guyana stood at the precipice of great oil wealth and the luxuries that came with it. Guyana is still waiting.

As the 750,000 strong nation recognised the magnitude of the discovery of over 8 billion barrels of crude oil reserve, the country began to garner international attention. Malls with multiplexes, PricewaterhouseCoopers the international consulting firm was planning their offices, Gordon Ramsey saw an opportunity for another restaurant and the Scottish oil city of Aberdeen was poised to become the oil city twin of the Guyanese capital of Georgetown.

However, these developments have all been brought to a grinding halt by the political stalemate Guyana has been in since their national elections in March this year. Guyanese politics has remained sharply divided along the ethnic demarcations of society. Such ethnic divide is not unique to Guyana and is mirrored in its Caribbean neighbour Suriname and also Trinidad and Tobago, coincidentally also countries rich in crude oil resources, although one more than the other. These deep chasms in the Guyanese society can be attributed to their colonial legacy. The two distinct communities in Guyana are the people of African origin whose ancestors were brought in as slaves, they account for about thirty per cent of the voter base. Then there is the Indian origin community whose ancestors were brought in as indentured labour once slavery was abolished; they account for forty per cent of the votes. The third community of statistical significance is that of the indigenous Guyanese people and their ten per cent stake in politics is usually considered a swing vote.

The politics and society of Guyana has remained segregated since the colonial era, the wide spread violence between the Indian and the African communities immediately after their independence from the British also strengthened the idea of contrariety between the two communities and theme has continued in the voting patterns till date. Guyanese people tend to vote based on their community identities rather than policy, certainly not a character flaw unique to Guyanese voters; but it does tend to have an amplified impact in the politics of a country that is finds itself on the brink of a crude oil windfall.

The national election in March led to the formation of a coalition government with Partnership for National Unity Party and Alliance for Change Party coming together. Alliance for Change is a relatively new political party that attempted to escape community-based politics and was perceived as the beginning of a new kind of politics, away from the colonial ideological fold. However, once Alliance for Change joined Partnership for National Unity to form the APNU-AFC coalition, their social perception deteriorated rapidly. Former Army General David Granger declared himself the President of the nation and he was quick to release a strategy for development including establishing a social security fund for the Guyanese people based on the imminent oil wealth akin to that of the Norwegian social security fund based on their oil wealth.

However, Granger’s success was short-lived. It was soon discovered that the victory by the APNU-AFP coalition had been declared before the vote- count was over. As the opposition demanded a recount of votes and the courts decreed a re-count, the coalition itself began to unravel. Now both parties have declared victory, and Guyana has witnessed the worst ethnic violence in decades.

As the political stalemate drags on, it becomes clearer that forthcoming windfall from the oil fortune is an opportunity that no one wants to miss. Guyana has already begun to ignore its traditional exports of sugar, gold, and bauxite. As jobs are disappearing from mines and unprofitable sugar plantations, the people are still waiting for jobs to appear in the crude oil industry; however, the political instability and the inability of the leaders to arrive at a solution is pushing the crude oil jobs further out of reach of the Guyanese people.

The ‘Dutch- curse’ that has befallen nations in the past, has often led to the ruination of economies and subsequently undoing of societies once they have reaped the benefits of their resources, it seems to have arrived in Guyana much earlier than usual. As the Guyanese realise that their antiquated segregations are standing in the way of fecund prospects, the country might open itself to new opportunities.

(The author is a Doctoral candidate at Centre for Canadian, US, and Latin American Studies at JNU and Asst. Professor at Amity University, NOIDA. Views expressed are personal.)

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