Could big oil break Guyana’s elite?

WHY is there such a fuss about Exxon among many of Guyana’s elite? What are the roots of this animosity and suspicion? How may Exxon upset Guyana’s class structure?

The elite is made up of the business class, civil society and their spokespersons, chronic letter writers and the columnists who represent the views and interests of the business class. This ‘Chattering Class’ dominates, without exception, the national debate.

They choose what issues are important and decide what is right and wrong at the exclusion of the working-class voice. Their pet topics revolve around their own interests, not those concerned with the common man, save when they can be used to undermine the government, which is invariably characterised as a threat to their interests.

Recent issues they care deeply about are parking meters (because they all drive) and VAT on private- school fees; not topics that your average Guyanese farmer cares for or knows little about. For example, compare the number of letters written about the murder of 18 Guyanese fishermen in Suriname to those penned on the burning topic of a sedition clause before Parliament.

Who gives this elite and its spokespersons access to air these views? Naturally, the corporate-sponsored media, which, while masquerading as independent journalistic institutions, are simply servile megaphones transcribing the latest businessman’s complaint or a frivolous attack on the State. The so- called Fourth Estate never actually dares to question or allow discussions about the capitalist class structure, but on occasion highlights the exploitation of workers so as to give the impression of independence. But there is no doubt where their interests lie.

The socio-economic dominance of the business elite was little interrupted by the transition to independence. As was the case in many post-colonial countries, the elite did not want to create more equitable societies to abolish the institutions of the British. They simply moved into the private clubs and sought to maintain the economic and social structures: The wealth concentrated in the hands of themselves, a marginal middle class and then the toiling masses beneath.

That Queen’s College remains the premier school in Guyana is no accident. Even the period of socialism under Burnham could not break their hold on the monetary and cultural high ground. And this dominance was maintained, and continues to this day primarily by threats of capital flight and a decades-long refusal to pay their fair share of the tax burden; even up to 2013, only one third, or 992 out of 2618 registered and active firms, filed tax returns.

A 2015 report on illicit financial flows, of which under-invoicing and smuggling make up a large part, estimated them to be valued at 511% of total public spending on education, making Guyana 6th in the world rankings.

GRAND LARCENISTS IN PINSTRIPE SUITS
Successive governments have therefore been cash-strapped to develop the country, finding themselves indebted to international institutions and left as beggars, even relying on corporate charity, which only served to burnish that class image as forces for good in the society, even as the crony capitalists among them helped themselves to tax breaks and discounted national patrimony.

Then in 2015, Exxon discovered oil. Boom! The reaction of the elite has been predictable: Trotting out tired arguments of an impending neo-colonialism; that Guyana would become a sort of modern-day plantocracy with the government as overseer for ‘Big Oil’.
The savaging of the contract and every aspect of Exxon’s activities has been relentless. What the reaction actually reveals is a deep sense of insecurity among the elite, which worries that the good life they have enjoyed at the expense of the workers will be disrupted. And equally important that they will lose status, influence and relevance.

And they have every reason to be worried. In fact, this rebalancing has been underway since the May 2015 election of the coalition government, which many of the elite only pretended to embrace. Now they gripe about the growing power of the State, cloaking it in alarmist arguments of a creeping military dictatorship. Countless letters and editorials complain about ex-soldiers being installed in government positions as if they were former criminals.

Meanwhile, the investigations into, and prosecutions of, former ministers and officials who spent two decades handing out State assets to themselves, their families and friends is not framed as a legitimate redress, and accounting for blatant criminal self-dealing, but as a witch hunt. How dare former politicians be hauled before the court, and handcuffed, no less?

The increasing efficiency of the GRA, under Commissioner Godfrey Statia, and its legitimate pursuit of tax evaders are seen as “hurting business” rather than ensuring the business class pays its fair share. Corporations are suddenly finding their frivolous court cases to avoid paying VAT and other taxes resolved in the GRA’s favour. It is literally payback time.

FIRST OIL
So now we come to ‘First Oil’, which is only months away, and the revenues it is expected to produce. By 2025, this could amount to a staggering $200B, able to build five Demerara Harbour Bridges, or 1000 secondary schools every year. With those kinds of funds, no longer will the government be in thrall to the business class; no longer will they have to beg for charity or listen to their self-serving agenda cloaked in sanctimonious concern for the nation.

A rejuvenated government will be able to afford to bring in experts to help with development of what will be transformative infrastructure projects, and pay decent wages to public servants, thereby encouraging the best and brightest to pursue careers in the Civil Service. Ideally far improved healthcare, education and security will all be within Guyana’s grasp within a decade. The common man will see the improvements, and this will result in the legitimacy and authority of the State to grow. And that will mean a fundamental rebalancing of the power dynamics within the society.

Exxon, which will be here for decades to come, is in fact the ideal silent partner in the socio-economic drama that will unfold. They are an energy company that wants to get oil and gas out of the ground 130 miles out at sea. Unlike the planters of olden days, they have zero interests in regulating the class system.

But the revenues their activity will unleash will produce an earthquake to the fragile nature of Guyana’s class system. That is why the elite is gnashing its teeth; they see the future and they fear they will no longer be on top.

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