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Sunday May 09, 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
Extraordinary measures There is a push by some world leaders “in favour of waiving intellectual property protections for coronavirus vaccines” (“Taking ‘Extraordinary Measures,’ Biden backs suspending patents on vaccines,” New York Times, May 5). Times of catastrophic challenge call for responding in like manner. That is, with postures and actions in support of extraordinary measures. We at this paper take this position and not just as it relates to leadership thinking and reactions to this global pandemic pestilence, but in other areas of similarly grave sensitivity. Extraordinary measures are required in this time of crisis. And when leaders dig deep, weigh the limited options and think outside the normal parameters, then they are already positioning themselves to operate outside any restraining boxes. When they do so, they take their societies along with them. Sometimes it is a severe drag on energies and the spirit, but it just has to be done. This is what United States President, Joseph Biden, is doing with his thinking and early indications of supporting the lifting of patent protections on the vaccines. As is to be expected, the pharmaceutical companies are neither nibbling nor buying into such a vision without a fight. These companies are giants in their sector and which usually is of a global reach. They have the resources to scuttle such developments right in the cradle and if the early stirrings are any indication, this well-meaning thrust could meet an untimely death. After all, Pfizer alone is forecasted to draw in approximately US$26 billion from its front running coronavirus vaccine. For Pfizer, it would be a bitter pill to swallow, one that causes much choking, if it has to share its trade secrets with the wider pharmaceutical sector, meaning, it’s tooth and nail and dog eat dog competitors. But this is exactly what the World Trade Organisation (WTO) has appealed for, given the impacts of the pandemic across the globe. As the New Times article noted, “The United States has been a major holdout…over a proposal to suspend some of the world economic body’s protections, which would allow drug makers across the globe to access the closely guarded secrets of how the viable vaccines have been made.” It is all in the money, with the humanitarian, the lifesaving and the dictates of commonsense all giving way to economics. During the throes of the Great Depression in America, almost a hundred years ago, agricultural produce and farm stock were destroyed in an effort to boost prices. And this is while people were starving by the millions. This is not about fried chicken or soft drink secrets. In today’s pandemic world, people are sickening and dying at rates approaching those of that much-talked about and much-feared other plague of medieval times. That was called the Black Death and could still bring shudders in the mere contemplation. But in the pushback from commercial interests, what is being heard and what is becoming increasingly obvious is this: business is business. There is nothing racial, personal, intentional, or even lethal that is in mind. It is simply the way that bloodless leaders at disembodied and clinical corporations must operate, if they are going to maintain (and possibly extend) their leadership over rivals. In fact, the pharmaceutical industry has “responded angrily” through the “president and chief executive of the Pharmaceutical Research and Manufacturers of America” when he described the announcement of President Biden’s leanings as an “unprecedented step that will undermine our global response to the pandemic and compromise safety.” To cut through the politely chosen, but unmistakable words of objection, matters boil down to this hard place: nothing doing, Mr. President. This is most regrettable, since it is so unhelpful, so palpably endangering to so many, especially those in dire need in the poorer places of the world. It flies in the face of putting minds together to come to those compromises, those well-crafted solutions, that bring people together, that knit those in need of healing, that lifts up out of the grave (almost literally). Yet companies and their leaders are balking and this is when there is clear evidence that whole societies are severely stricken, that wide swathes of countries are on their knees. The profit motive, the selfish agendas, the small
Time for Guyana to consider hedging as oil prices recover DEAR EDITOR, December 20 marked the one-year anniversary of oil being lifted from Guyana’s ocean floor. Who has benefitted the most from our oil? Is it the people of Guyana or the oil companies? Certainly, there doesn’t appear to be any significant oil benefits to the more than 30 percent of Guyanese living on US$2 a day. At least one oil company has used a strategy to ensure ample profits from our oil even when oil prices fluctuate as wildly as they did last year. The oil companies have been in business for decades while
Guyana is just starting out. The government should learn from strategies employed by experienced operators in the industry to ensure maximum benefits from the sale of Guyana’s oil. Guyana has the light sweet crude oil. In 2020, the price of that crude fluctuated from a high of over US$65 a barrel at the start of 2020 to a low of US$16 a barrel in the depth of the ongoing Covid19 crisis. The average price for 2020 was approximately US$41 a barrel. Hess revealed in early 2020 that it “hedged” 20,000 barrels per day at US$60 per
mindedness all speak for themselves. These are the same leaders, who in different walks of life and empowerment, who speak loudly and boldly about doing the right thing, of maximising benefits for the greatest many. That is, until they
barrel of Brent Crude, the type of oil Guyana produces. “Hedging” is a financial risk management strategy, which a company can use to protect against a low selling price for oil, and receive a guaranteed higher price, and higher overall income. Think of hedging like insurance, it protects against adverse downside oil price scenarios. Of course, like insurance, if the adverse scenario doesn’t occur, you lose the premium paid for the insurance. Guyana did not hedge its oil during 2020, and lost income because of the wild swings in oil prices. Using recent figures released by the Ministry of Natural Resources, Guyana
received US$246.5 million when it sold about 5 million barrels of oil over the past year. Had Guyana sold its oil in 2020 through hedging, at the average cost of US$41/ barrel, then its take could have been US$205 million from the sale of its 5 million barrels. Thus, it was lucky to avoid a loss of more than US$40 million. Guyana wasn’t as prudent as Hess in protecting against the wild swings in oil prices in 2020. If we divide US$246.5 million by 5 million barrels, we can deduce that Guyana received US$49.3 a barrel for its 5 million barrels of oil. If Guyana had a US$60/ barrel hedge like HESS, it (Continued on page 6)
are forced to do so by hard circumstances. Then, they don’t. All the noble posturing, the grand words, fall by the wayside. If this can be happening at the leadership level during a global viral cataclysm, then it can happen anywhere else.