The invitation by President David Granger to the eminent English economist Sir Paul Collier and others, to brief his Cabinet on utilising the revenues from the Exxon oil find, could be seen as putting the oil tanker before the drilling rig. Coming in the midst of a firestorm of protests – which has now reached the courts — at the one-sided terms negotiated on behalf of Guyana by Minister of Natural Resources, Raphael Trotman, with the oil giant Exxon, many felt the President was attempting to calm the waters with the imprimatur of his knighted guests.
That suspicion was not assuaged when Collier advised “the contract not be torn up” when the Government insisted the terms of the contract were not raised in the briefing. It would appear, then, that the eminent establishment economist was misinformed by someone as to what was at stake here. This is rather unfortunate, because in his popular book, “Democracy in Difficult Places” as one reviewer summarised, Collier pointed out:
“Nigeria is a case in point. Its immense oil wealth, which should be used to help the country develop, makes politicians particularly anxious to hold onto office. They employ ever fouler means to do so, and elections thus become little more than organised gangsterism. The violent methods the politicians use become the modus operandi of their period in office, and the whole political system is corrupted.” Collier talks about “the survival of the fattest”. Guyanese are concerned that the very opaque process in which the Government handled the contract negotiation with Exxon portends a return to the authoritarian form of governance that marked the PNC’s first period of governance, between the rigged elections of 1968 and 1985, in which the army was brought out to violently quell protests.
According to the Government’s release, Collier “also spoke of the importance of transforming oil revenues into assets; noting that oil resource presents numerous opportunities, but the Government must develop a sound strategy to transform those opportunities into tangible benefits for the Guyanese population,” But it is in his earlier (2007) book, “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It” Collier should have been more expansive, since we are in “the bottom billion” and desperately need to know what can be done about it.
Collier proposed four structural “traps” in which the bottom billion may be stuck. First, there is the “conflict trap,” such as those that emanate from deep divisions in some countries along lines of race or ethnicity, and where some groups feel alienated from the national patrimony. In such countries, governments have to be very sensitive to violent, fissiparous tendencies and distribute revenues as fairly as possible so as not to exacerbate the sources of comparison and conflict. Perhaps if Collier had been briefed about the Government’s precipitate closure of four sugar estates and the firings of 5700 mainly Indian-Guyanese workers outside on their “traditional” base, maybe he would have sounded warning bells.
The second is the “natural resource trap”, now staring us in the face with oil, and which Collier did address as adumbrated above. But if he had been thoroughly briefed, Collier surely would have been more sympathetic to the need for directed investments in agriculture, to retain workers who were acclimatised to that regimen, and who, after oil revenues started to flow, could then be redeployed into a more diversified agricultural base.
The third trap identified by Collier is the “governance trap”: of poor policies, cronyism and favouritism etc. that fuel the massive corruption characterising the PNC-led coalition from its inception. If Collier knew about the Jubilee Park, the Pharma Warehouse and Contracts etc. he might have offered additional advice. While the last “trap” of being “landlocked” may not appear to be applicable to Guyana, with our lack of a deep-water harbour, we might as well be the Belgian Congo as far as getting our exports out to the world.
In light of our history, however, Collier, may have had good reason not to mention one of his chief recommendations for the “bottom billion” countries like us: that G8 countries should intervene – militarily, if necessary — to maintain “stability”.
