The most momentous happening of this year is the leaking of an email from the Caricom Private Sector Organisation (CPSO). This event will reverberate beyond the ripples of the teargassing incident at the Queen’s Park Savannah.
The latter reflects the polarisation of our country but the email fiasco highlights the divide between Guyana and Trinidad, which threatens Caricom.
Most of us are blissfully unaware of the importance of Caricom’s trade to our lifestyle. Trinidad and Tobago is the largest exporter in the intra-regional market. We export more than oil and gas to our neighbours—we fill the grocery shelves and feed the region through manufacturing exports.
The CPSO, a relatively new association within Caricom (July 2019), has 12 executives drawn from the region. The organisation was critical of the proposed Guyana Local Content Bill, which seeks to manage the development of the local energy sector. Four of the CPSO executives are Trinidadians.
The lone Guyanese, Mr Suresh Beharry, was tasked with ‘developing the communications strategy and approaching the Government of Guyana’. Really?
Within days of the ‘leak’, he issued a media release via a public relations firm: ‘Mr Beharry supports Guyana’s Local Content legislation; in particular, as it relates to the nascent Oil and Gas Industry. In fact, like many others, he has contributed to the in-depth discussions on Guyana’s Local Content legislation at each of many iterations.
‘Further, Mr Beharry welcomes the provisions, protections, and incentives that are provided for all businesses to invest and grow in our oil and gas space.’
He offered to facilitate the talks between the CPSO and the Government. Were his peers unaware of his position? Is the approach of sending a ‘messenger’ typical of how the CPSO executives conduct sensitive and delicate negotiations?
Were they aware of the fragility of the Caricom movement and the possible risks in this situation? Should not Mr Gervase Warner and some of his colleagues have made earlier individual interventions in a matter as significant as this?
This situation resembles the ‘Gabriel Faria affair’, where the contents of a private Facebook group spilled into the national landscape and set off a firestorm.
One can justifiably wonder whether there is any honour left in the business circles of the Caribbean. Confidentiality is the essence of being trusted. If they do not trust each other, what will be the fate of John Public?
This incident signifies a seismic shift in Guyana’s relationship with Trinidad. In September 2018, President David Granger and Prime Minister Keith Rowley signed a Memorandum of Agreement dealing with energy cooperation.
President Granger noted, “The MOU is a means of benefitting from Trinidad and Tobago’s advice, their experience and expertise that they have built up over a long time. So the fears that this is some giveaway are completely unjustified.”
The blowback came from Robert Persaud, now foreign secretary, in the run-up to the elections in October 2019.
“The time has come for us to revisit the Treaty of Chaguaramas […] to redefine what we want out of Caricom,” he said. “We must start that conversation because we are the ones […] expected to do more, pay more and get less.
“Trinidad and Tobago has been very predatory in how it has approached opportunities in the oil and gas sector in Guyana and we need to push back.”
At the same forum, Kevin Ramnarine, Trinidad and Tobago’s former energy minister, added, “From an investment point of view, I think people in Trinidad would see opportunity in Guyana and Guyana, being part of the Caribbean Single Market, part of Caricom and so on; naturally you would expect that Trinidad businessmen would come seeking opportunity in Guyana.
“The point I would make is if they do that, it should be done in partnership with Guyanese businessmen so that we build the capacity of the Guyanese business community.”
To describe Trinidad as hostile to Guyana is to have a short memory. Trinidad lent to Guyana in 1981 when they were in great need. Forbes Burnham described the act as ‘an expression by deed in the future regional integration movement’.
Trinidad then forgave the debt, equivalent to 6% of its GDP in 1997, on terms better and earlier than was offered by the Paris Club, at a time when Trinidad was already in economic difficulties.
‘Trinidad and Tobago has borne the heaviest burden of any single bilateral creditor in relation to the size of the economy,’ wrote Susan Ramirez, a Trinidadian member of the Central Bank.
That stance also sells short the Massy contribution. Sydney Knox convinced the board to enter the Guyana market 53 years ago.
The Massy operation supported the rice industry, helping it survive the political onslaught that threatened to decimate it. The rice industry was a significant source of foreign exchange in the ‘dark’ years.
The company helped to propel the Guyana Refrigerators Ltd, the makers of the LEC brand, making it the leading appliance in Trinidad in the 70s. It supported the establishment of Stabroek News, which broke the monopoly the then Government held on news. That shareholding never received a cent in dividends.
In the tough years when other companies reduced operations or left Guyana, Massy kept investing and never wavered.
To minimise the value of Caricom is to forget that Caricom stepped in to resolve the problematic Guyana 2020 elections five-month stand-off. In a country riven with a history of ethnic disputes, it is wise to remember that countries with oil are twice as likely to experience civil wars as those without. (El-Gamal and Jaffe, 2009)
Yet The UWI’s St Augustine Petroleum Engineering Department became an early casualty when its relationship with the University of Guyana broke down with the insertion of Exxon Mobil. The much-touted training programme to be hosted by the Open Campus was still-born.
After initial denials, the oil companies, Exxon Mobil and Hess, acknowledged that Professor Michael Porter, the Harvard academic, was engaged in building a developmental plan for managing Guyana’s oil wealth. This arrangement sounds like a deal we have seen elsewhere.
In November 2021, it was announced that the UK-headquartered TechnipFMC had won a large ExxonMobil contract to supply the sub-sea production system for the highly anticipated Yellowtail project off the coast of Guyana. But the exact terms were not disclosed. (TechnipFMC considers a ‘large’ award to be between US$500 million and US$1 billion.)
All these costs factor into the mathematics of the Production Sharing Contract. Do we recall the McDermott Group taking away the work of building a rig for the Angelin platform? Does Guyana have the capacity and technical skills to negotiate with these oil companies?
Would the experiences of Trinidad be helpful in the negotiations?
The Iranian experience in development and the need for good advice will be instructive. The potential for corruption, structural myopia in policy making coupled with political blindness is all ahead (Atashbar, 2013).
Asserting that Guyana’s Local Content Act is the same as Trinidad’s policy appears disingenuous. Trinidad defines local content in conformity with internationally accepted norms and the fundamental tenets of international conventions, such as the General Agreement on Trade and Services (GATS). The certification process in Trinidad is different.
The CPSO point is about Guyana’s approach to its local content strategy; it does not deny the need for one.
Yet, Mr Timothy Tucker, a top Guyanese businessman, blurted out on his Facebook page, ‘If the Trinidad Private Sector or Government wants to challenge Guyana’s Local Content Legislation, it’s time the Guyana Government exit CSME and review the benefits of Caricom.’ (Demerara Waves, January 2022)
Is this how reasonable men resolve differences? Or is this a victimhood that facilitates re-colonisation? Or victimhood that fails to create economic development?
El-Gamal and Jaffe have more to say: ‘distribution of oil rents to favoured segments of society, and the resulting culture of consumerism do little to ensure long-term economic development. When oil revenues shrink in the downturn of the cycle, unemployment and reduced rent redistributions feed anger, just when the state’s ability to spend on security and population appeasement is waning.’
Trinidad can talk at length about this with Guyana.
The Caricom Commission, led by Professor Avinash Persaud, had this to say in 2020:
“Many of the problems we face […] cannot be dealt with effectively by nations acting individually. Yet there is less political appetite for multi-lateralism and more for an assertion of nationalism. The question they pose is not, do we have the money or are we all ready, but do we have the political commitment to a single market and economy?
“Our countries are small and underpopulated. We cannot develop through autarky. We must be globally excellent, learn from the world, share, and sell to the world. Our companies must be globally innovative.”
Guyana would do well to learn from our Mittal experience. Multinationals have a business arrangement with the host country; never mistake it for love.
Guyana needs to understand the Nigeria and Venezuela experiences: oil reserves do not equate to a developed country. The strength of the national institutions is a core ingredient to success.
Given the noises made by Jamaica over the years (the Golding Commission and Andrew Holness’ walkouts from Caricom meetings and his unhappiness with the progress made) and the USA’s historical overtures, it is not inconceivable that once Guyana breaks with Caricom, they will follow.
We will sing Sparrow’s calypso ‘Federation’ once more. What a mix-up! What a cass cass!
Or, as we say in Trinidad, bacchanal!
Very instructive assessment. Individual political ambitions will undermine and ultimately destroy regional cohesiveness. Caricom is far from perfect but it is the only way member countries will survive. For survival, the perspective must be one of regional unity.
Many points here are noted and accepted.
This flare up to a large extent is as a result of the frustration that Guyana business has felt trying to access the Trinidadian market. After 15 years of COTED, a series of matters remain unresolved despite promises. T&T bans honey from its shores. This means that even if you want send it elsewhere, you can’t even do it intransit. It is these kinds of things that need to be addressed.