Dear Editor,
Dark memories of the nationalisation of the sugar industry were commented upon by a writer comparing Booker’s Guyana with Exxon and the oil and gas sector, suggesting the latter’s expropriation.
The suggestion of nationalisation of oil and gas is fraught with danger to the economy. The writer stated that Booker’s dominated Guyana’s economy through the sugar industry, resulting in the late dictator Forbes Burnham expropriating the multinational interests in Guyana in 1976. Is he advising or suggesting the nationalisation of the oil and gas industry using bullying tactics of the late dictator Forbes Burnham? We know how that went, and the consequences to Guyana – collapse of the economy and sanctions from Western countries.
For those who may be too young to know, Booker’s, as the British conglomerate was commonly known, operated the sugar industry in what was then British Guiana, continuing after independence in 1966. The sugar baron owned the estates and five Booker Line ships, in support of sugar exports as well as other business. It also owned estates in Guyana, Jamaica, and other territories.
Comparing the Booker’s dominance of Guyana to Exxon, the writer insinuates that the oil giant is able to do whatever it wants in the country, with the Government having no checks and balances and/or interest in keeping them in line within the law.
Exxon has largely operated within the law, and has no control over the judicial, legislative, and executive institutions. Its actions have received Government approval.
With reference to Booker’s, the writer said Burnham “was intent on showing them who was boss, and so he decided initially not to nationalize them, but to instead impose a sugar levy which he announced in his New Year message in 1974.”
Notwithstanding the factual inaccuracy in the statement – the company was indeed nationalised – he admitted that this was a major economic (and political) blunder. He stated that “just about 10 years after nationalization, the Guyana sugar exports dropped from almost 300,000 tons per year to about half that amount…” So, by his own admission, nationalisation did not work out well.
Similarly, nationalisation of the bauxite industry led to the decline of production to half after a few years. And the same happened in the rice industry when Government went into cultivation and production. The private sector outpaced the Government in yield per acre in both sectors.
Nationalisation of sugar and other industries presented major challenges, because finding locals with the skills and knowledge of the said industry at the time was a tall order. One can only imagine, then, the dire consequences of nationalising the oil companies in Guyana – production would most certainly drop to zero overnight. Just look at neighbouring Venezuela, that produces a mere tenth of what it once did in the 1990s. And the Venezuelans have much more experience with oil than Guyanese.
Vieira made some bizarre statements. He penned: “Bookers owned significant assets in Guyana, while Exxon owns not even one square inch of land or property…So when Exxon decides to leave Guyana, there will not be one square inch of fixed assets which we can seize in case they don’t keep their guarantees to us.”
That comment is not accurate, as Exxon has assets worth tens, if not hundreds, of millions in American dollars operating in Guyana’s jurisdiction.
But why this obsession with seizing foreign-owned assets in Guyana, as Burnham did “to show them who is boss”? Is he (inadvertently) advocating for Exxon to buy up lands and real estate at a time when assets are beyond the affordability of Guyanese? If Exxon acquires these assets, as he suggests, with its spending power, who will benefit the most? Won’t Guyanese be priced out of the market?
He noted that Bookers owned a multitude of ‘side companies’, which allowed them to buy all their raw material, products and services from themselves at an exorbitant cost to Guyana. Exxon has not been accused of operating in such crooked ways. News reports stated that Exxon contracts other companies – firms that have no connection to them – for supplies, services, and the like. These include drillers, vessel builders, caterers, transportation providers, and shore base services from local business operators such as the Guyana Shore Base Inc., and more recently the Vreed-en-Hoop Shore Base that is being constructed.
Ensuring companies adhere to the laws of the land is a function of effective governance. We can all agree that this must be the environment in which all oil companies are made to operate. The Government must also uphold and adhere to the law, and not violate contracts.
The tactics of seizing assets and nationalising companies to teach them a lesson must be confined to the garbage heap of history.
Yours truly,
Vishnu Bisram
