US Ambassador Perry Halloway offered an excellent bit of advice to those Guyanese commenting on our incipient “Oil Industry”: just “bone up” on it before mouthing off. Of course, being a diplomat (a career one at that, and not one of those “political appointees”) he didn’t put it so bluntly. But he obviously knows of what he speaks, since he spent all of his previous stints in drug infested Latin American capitals.
At the time of his posting (2014), drugs would’ve been the only substance making Guyana show up on America’s radar. But with Exxon striking a “world class” oil find off our coast the following year, he would’ve had to have done some big time “boning up”!! That his boss over at the US State Department is the former boss of Exxon was probably an added incentive not to blot his copy book!
Anyhow, your diligent Eyewitness took his advice to heart and did some quick boning up this morning. He focused his attention on the sub-Saharan Africa nations we most closely resemble in our governance and economic development – or lack thereof! And as far as the critiques of the Contract, what he found wasn’t much different from what the locals have been saying; and to which Resource Minister Trotman has been so surly in his responses.
Mr Halloway should really have asked him to bone up on the oil business earlier! But, then again, we now know Trotman became quite distracted after he attended COP 25 in Gay Paree with that trusty assistant!! Anyhow back to your Eyewitness’s “boning up”. Firstly, the quantum of the royalties we’re receiving from Exxon. The African base rate was 8.5% and went all the way to 15%!! And these were countries that’ve complained they were RAPED!! So, what should Guyanese say?
To harp on Guyana DOUBLING their royalties after Trotman’s RENEGOTIATION is really to insult the boning up. In all instances, the African countries (like Guyana) had to drop their pants BEFORE oil was found. That’s reasonable – the oil company was taking all the risks and all that. But after oil’s found and the contract has expired – it’s every country doing what’s best for itself. And – voila! – they have their royalty rates at least four times ours!!
But what’s even more alarming is: in addition to their high royalties off the top, they also have profit-sharing of at least 30% – AND taxation of the oil company’s profits at 30%!!
Based on your Eyewitness boning up, he finds that THE GOVERNMENT OF GUYANA WILL BE PAYING THAT 30% FOR EXXON FROM GUYANA’S SHARE OF PROFITS!!
Say it ain’t so, Trottie!!
…on behavioural economics
Richard Thaler’s copping this year’s Nobel Prize for economics has perked interest in that esoteric branch of the field he practically pioneered – behavioural economics (BE). In fact, after the great crash of 2008 — which ALL the standard orthodox models FALED to predict, and in which most of the developed world is still stuck — BE’s about the ONLY branch left standing!
So your newly advised Eyewitness boned up!! And discovered behavioural economics just threw out ALL the three major premises of orthodox economics through the simple expedient of checking if those premises really held up in the real world!! Imagine since the 18th century, this “social” science that had the most pretentions to be a SCIENCE never checked its premises!! Your Eyewitness is distraught!!
Its major premise, of course, is folks behaved RATIONALLY when making economic choices – which was proven by psychology NOT to be so!! Political SCIENCE, of course, had long disabused itself of that quaint notion, as our Guyanese voting patterns show!!
So, are we going to send all our economists back to school?
…on Sugar Optics
Saw that pic of the “GuySuCo team” announcing another 5000 sugar workers being thrown to the wolves?
Where were the folks actually calling the shots?? Like Chairman Clive Thomas or Diversification Czar Jervis?