Oil discovery complicates political crisis in Guyana

March 26, 2020
New Delhi: Large new oil discoveries, a poor, sparsely populated country with its politics sharply polarised on ethnic lines can be a noxious combination. Guyana, a small South American country with a large Indian-origin population plunged into political turmoil after elections were held early this month.

The electoral office declared the results of the March 2 election, disregarding objections from opposition parties, international election observers and the courts. Opposition supporters took to the streets to protest; blocking roads, burning tyres and clashing with the police, which led to the death of one protestor. The election outcome remains uncertain despite a Supreme Court order for a partial recount of votes.

The March 2 elections have drawn international attention because of the large, off-shore oil discoveries made in the past five years in the country. The prospect of high oil revenues that could drastically raise the country’s GDP was one of the important factors in the election campaigns. There are many expectations that the oil bonanza would bring prosperity to Guyana. But there are some Guyanese who have voiced apprehensions that the oil revenues could lead to corruption, misuse of funds and economic mismanagement resulting in high debt, as has happened for several other countries dealing with large oil discoveries. It is a phenomenon that has been described as the oil curse.

Oil giant, ExxonMobil discovered huge crude oil reserves less than 200 kms off the Guyanese coast, in one of the largest discoveries in recent years. The American oil major entered into production contracts with the Guyanese government, which have been termed as overly generous to the oil company by the opposition as well as international oil analysts and transparency activists.

Guyana has a population of 7,50,000 and its politics is divided on ethnic lines. The ruling Partnership for National Unity and Alliance for Change (ANPU-AFC) is mainly supported by the Afro-Guyanese community and is led by President David E Granger, a former army general. The opposition People’s Progressive Party/Civic (PPP/C) is backed by the Indo-Guyanese community, whose senior leader is former two-term president Bharrat Jagdeo.

Guyana is South America’s only English-speaking country and almost half of the country’s population is of Indian origin, descendants of Indian indentured workers brought to work on the sugarcane plantations. Another 40 percent of the population comprises of Afro-Guyanese whose ancestors were brought from Africa as slaves by the Dutch, predecessors of the English colonialists in Guyana. Amerindians, Chinese, Portuguese and Europeans form the rest of the Guyanese ethnic mix. Guyana was the first country in the world to elect a Prime Minister of Indian origin, the charismatic Dr Cheddi Jagan in 1953 when Guyana was still a British colony.

The prospect of large oil revenues has added another dimension to the bitter rivalry between the two main coalitions. Former president Bharrat Jagdeo accused the Granger government of trying to “steal the election” when the election office ignored a court injunction and announced the results without completing the full electoral process. The Ambassadors of the United States, Canada, United Kingdom and the European Union questioned the credibility of the results in a joint statement. The Commonwealth Observer also stated that the results had not been verified as required by legal provisions.

The main dispute was over the counting of votes in the region around the capital, Georgetown or District 4, which has the highest number of votes. The opposition parties had demanded a recount of the votes polled.
As the impasse continued, India stressed that it was important that the electoral processes are credible, fair and transparent. A statement from the UK foreign office warned that any government sworn in on the basis of non-credible results would face strong international condemnation as well as serious consequences.

Granger’s government was elected in May 2015 with the electoral promise of tackling the high unemployment, corruption, drug trafficking and violent crime. But the government got mired in controversy following the discovery of large high quality, off-shore oil fields and the production sharing agreements (PSA) signed by it with ExxonMobil.
In December 2018, the government lost its majority in Parliament after a ruling party member voted for a no-confidence motion against the government. Instead of calling for elections, Granger challenged the motion in court. Even after the court upheld the result of the no-confidence motion in July 2019, the Granger government delayed the elections till March 2020.

There were reports in Guyana that the elections had been delayed in order to let some crucial clauses of the oil agreement to kick in and thereby prevent any new government from making changes in the contract.
Guyana has a history of controversial elections for race and ethnicity issues tend to get aggravated at election time, especially as elections results have often been close. Granger’s government had a single seat majority.

The Supreme Court had ordered a recount of votes in the disputed region, but a delegation of CARICOM leaders (a regional grouping of Caribbean Community and Common Market) helped the two main political formations to agree to a full recount of the votes. But then the High Court issued an injunction against the counting on a petition filed by a ruling party supporter, further delaying the result. More than three and a half weeks after the election, the Guyanese people still wait for the election result and an end to the political tension with the formation of a legitimate government in the country.