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Tuesday July 27, 2021
Kaieteur News
Kaieteur News Printed and Published by National Media & Publishing Company Ltd. 24 Saffon Street, Charlestown, Georgetown, Guyana. Publisher: GLENN LALL-TEL: 624-6456 Editor: Sharmain Grainger Tel: 225-8465, 225-8491. Fax: 225-8473, 226-8210
EDITORIAL
Kazakhstan is confirmation Not a day passes without citizens of this country being presented by this paper of how bent our leaders are in doing wrong with the nation’s oil wealth. One story revealed by us may have slipped under the radar of attention, but we retrieve it and place it right before the eyes of our readers. The title of the news article was “Current structure of Guyana’s NRF likely to encourage political meddling and limit independent accountability” (KN July 23). It has to do with this government’s thinking and leaning, even still unannounced, but settled, determination, on adopting the Kazakhstan model for our own National Resource Fund (NRF). Any such thinking that may be stirring and choice, should it come about, is wrong once, wrong twice, wrong each and on every occasion harboured. Guyana should not go anywhere near the Kazakhstan model for its NRF. It is one of those nation-states that finally came to independence in 1991 following the breakup of the old Soviet Union. Guyana could be considered its ‘big brother’ by a quarter century. More importantly, the states that came to be conveniently grouped under the more easily enunciated label of ‘stans’ have much going for them, compliments of their Caspian Basin. Some of those new societies, if not almost all of them, have been noteworthy for being controlled, virtually owned, by powerful oil and political oligarchs, with little to separate the two sets of dominant players. Corruption and cronyism, and endless leadership criminality and political skullduggeries, have all come to feature highly in the oversight and operation of those countries (‘stans’) oil and Natural gas resources, among other riches. So why would Guyana, through powerful leaders in the present PPP government, would want to have any model from such a country for its own NRF? Why would any political leader with clean visions and clean hands even want to think of, then go anywhere near to, the NRF model of a country like Kazakhstan? That is, if they desire to do right by this oil that Guyana keeps finding? We ask these sharp, relevant questions, because according to the position taken by Mr. Arthur Deakin, CoDirector at America’s Market Intelligence Practice, “Guyana’s current government should change direction and should steer towards adopting an NRF that mirrors Norway, and not Kazakhstan” (KN July 23). It should be so because the “Scandinavian model would be the ideal to serve as the basis for the [local] fund.” And because it facilitates “modifying allowances for a greater percentage of revenues to be transferred to the budget for…infrastructural development.” And because, “regardless of the political party in power, having the “right fiscal and regulatory framework” embedded in the nation’s NRF could lead to the right results in every area for all peoples of this rich, but hopelessly misled, society. It is enlightening that during what may be insisted to be one of the biggest storms in this country’s history, an existential one at times, Guyana did not look for any aid, any guiding hand or any overarching guiding principles from a place like Kazakhstan. To cut to the sharpest point, PPP leaders then in opposition reached to the A and B and C and E countries for help and wisdom. As any Guyanese knows, those were American and Canadian in North America and British and those other countries that have been mainly capitalist oriented in Western Europe. For emphasis, PPP leaders did not even think of seeking a helping hand from the likes of Kazakhstan. Come to think of it, they did not have much to do even with Mother Russia. So why are they thinking of having an all-important NRF based on that of Kazakhstan? To answer our own questions, we share our hard misgivings about where such thinking of PPP leaders is based upon, and leads. Kazakhstan’s NRF does not foster transparency. Kazakhstan’s Management Council that drives spending includes its top political leaders. Oil means money, which means much spending, which means Guyanese should not want crooked politicians around such money and spending, without transparency and accountability. It should be clear now why Kazakhstan comes up in PPP leaders’ conversations, and not Norway. It is because skullduggeries are in motion.
We are fooling ourselves if we expect Guyana will ever come close to being a mirror image of Dubai Dear Editor, We are fooling ourselves if we expect Guyana will ever come close to being a mirror image of Dubai, or the go-to destination in the Caribbean. That will never happen if we are unable to evolve. The government gets a plus in the development schemes, but clearly, there is some shortsightedness to these schemes. The fact that we don’t seem to have Landscape Architects involved in developing these housing schemes is clearly obvious
and is another issue altogether. The common direction to getting around in a place like Providence is to give standard directions that sound like this: “Turn left at Massey, at the corner, take a right, then when you come to the first corner, take the second left.” Impressively so, all these directions are on unpaved side roads, 80% of the time. Residents should be allowed to not only name the streets in their neighbourhood, but also contribute collectively towards placing standard
road signs as well. All this will take considerably less time to get done, than waiting for government officials in the lands department, presumably; to come around to naming the streets, which should be one of the criteria for developing schemes. The ministry responsible for street names can easily put together a one-page process for getting this issue on the fast track, by the public. Let’s face it: otherwise, the country will be developing with no street names. Furthermore,
businesses will easily be able to upload their location with a proper street address so that Google Maps has them for the nation and world to see and people to conveniently find, if that is the case. We talk of foreign investors wanting to come to Guyana, primarily to set up business outside of the main metropolis area, but what will be the proper address? Or isn’t it relevant, as is found elsewhere? Yours truly, Chi Kansi
Government must do more to provide clarity on the gas-to-energy project Dear Editor, The gas-to-energy project is one of the most exciting parts of oil development for many like myself in the business community that have long complained that expensive and unreliable electricity has held Guyana back. The concept of cheaper, cleaner, and more available energy is an enticing one. But the government can and must do more to show how this project will be completed. There is an understandable public
frustration with the lack of answers. The public has real questions and the administration must provide more answers than it already has, lest it fall into the trap of previous governments who hid their activities and faced the consequences at elections. Thankfully, the government is starting to provide us with the opportunity to ask questions about the ongoing project development. The scoping meetings, which have been set up in a number of towns,
even in more rural locations, have been helpful to address some of our concerns, and show the government’s willingness to be open. So much of the lack of information stems from the fact that we are still in the initial stages of the project despite such wide coverage. Reading headlines, it sometimes seems as if steel is going into the ground each day when in fact the project is still in an early “assessment” phase. Many of the biggest
concerns about things like cost aren’t things that can be known without committing real investment to hire engineers and consultants to evaluate the prospect. But that would be premature and even illegal if government funds were spent on that before an environmental impact assessment or community meetings were done. More clarity from the government about that process and the careful, measured pace it must proceed at would go a long way towards soothing the community’s concerns. Yours truly, Donald Singh
I do not know of any country where Exxon did not pay corporate taxes on its profits Dear Editor, Some time ago, Professor Ganga Ramdas, reminded the public that Exxon does not pay taxes on revenues earned or profits (12.5% of money generated from sales of oil). Had it paid taxes, that money would have been available for a lot of social welfare services such as doubling pension payments or free education for all. Dr. Ramdas did not make a very strong, convincing argument on why Exxon should or is required to pay taxes. Those of us who studied economics know that taxes are critical for an economy. Taxes are used to pay for workers and services that governments provide to communities – in short, to run the government. Government has to pay politicians, administrators, bureaucrats, civil service, clerks, police force, army, emergency forces such as firefighters, public hospitals, doctors, nurses, engineers and maintenance workers for streets and buildings, and goods consumed by the government
services. Taxes are critical to a country. But everyone seeks to avoid taxes while wanting the best services. Without taxes, these services cannot be made available as government need revenues to pay for them. Those of us who study economics or taxes would know that all corporate businesses pay taxes on profits. Some investors get tax holidays as an incentive to invest. I do not know of any country where Exxon did not pay corporate taxes on its profits. But the PPP administration cannot be held liable or blamed for Exxon not paying taxes. The APNU led government signed a very bad agreement (paying Exxon’s taxes) that in effect exempts Exxon from all corporate taxes. The government agreed to pay the investors’ taxes, a practice not known elsewhere. As Guyanese said, APNU led government gave away the entire store, saddling the PPP administration with this burden. The PPP has to
honour the contract, which has a stability clause that it cannot be unilaterally renegotiated. Perhaps former Minister Raphael Trotman can explain why the government signed that lopsided contract. Who instructed him to sign it and why was the stability clause inserted in it? It is not good investment policy to break agreements even if one gives away a store. But perhaps a way can be found to collect more revenues from licencing, etc., and even from taxes and local content policy. Guyana’s law on taxes essentially says a company or person pays taxes on income earned. None of the country’s laws says that the government can pay the taxes of an entity. It is not clear if a contract overrides the law; constitutional lawyers have to give clarification. When I taught economics years ago, I pointed out some creative ways how giant companies can be taxed through various fees. Companies can pay more taxes but it is up to
parliament to make such laws mandating taxes or user fees. The PPP has done its best to enforce the contract while securing the interest of the nation. There are others who believe that the contract can be renegotiated; both sides have to agree to renegotiate the contract. Just for clarification, royalty is not really taxes although some economists describe it as a tax. Royalty is income or a fee from use of property; Guyana’s oil and gas are national public properties, the use of which investors pay a fee. And revenues collected from Exxon including profit sharing is not taxes. Taxes are fees levied on income. Exxon is not paying taxes, as Dr. Ramdas correctly stated. A company’s interest is to minimise taxation while government’s interest is to maximise tax collection. The previous government should explain why it signed an agreement that is against the country’s interest. Yours truly, Dr. Vishnu Bisram