Revisiting the Buxton Proposal of Oil-for-Cash Transfers to Guyana’s Households

Part 1 Introduction

In this week’s column I start my effort to re-address the Buxton Proposal. This re-visit is very timely, as I shall demonstrate going forward. It will last several weeks. It has been occasioned by my recent re-reading of media reports on the Proposal. In that effort I was struck, as a social scientist, at how professionals in a wide variety of disciplines could so readily resort to ludicrous exaggeration, lampooning, and even caricaturing of proposals and schemes aimed at benefiting the poor as the priority option. Two examples readily come to mind. One is quite recent and the other is from a few years back in 2018. These illustrate what I mean.

On the earlier occasion the Chronicle newspaper had headlined in quotation marks President Granger response to questions on cash transfers to households from oil revenues by stating there was “No evidential basis for cash payouts”. Readers are aware that, payouts and handouts, are often used to disparage state transfers to the poor; while incentives and fiscal relief are reserved for transfers to businesses. As I shall remind readers the Proposal admits upfront to the absolute necessity for a successful government-ordered feasibility study as a condition for its implementation.

More recently, in a letter to the press on August 30, 2021 Mr Tara Singh notes that “Professor Clive Thomas stated that the gpvernment should give each household an astronomical sum of US$5000 from oil revenues” To show how astronomical this sum is he goes on to further stress that this would “cost US$ 1.05 billion or G$ 215 billion or 50 percent of the 2021 budget”.

Two quick responses. I have no inkling of Mr Singh s personal finances, but I am willing to wager that, if Mr. Singh is not a retiree the supposedly astronomical sum of US$5000 per household per year is less than 10 percent of his monthly income. As clearly advocated in the Proposal, the target sum comes into effect only at full ramp up of Guyana production. As we shall see that is when production of oil reaches around 1.5 million barrels per day. That is, more than 150 times 2020 production!

The caption for Mr. Singh’s letter is, Public education in oil revenue is essential. A careful response to its full content has been offered already by Sherwood Lowe. The only comment I would add is that, I find it stunning at this point in 2021 with the already published revenue data since first oil in Decenber 2019, someone would be projecting government revemue of around half a billion US dollars by 2025/6. It reminds me of those on record in 2018/2019 claiming that Guyana will never earn more than US$300 million in government revenue.

Turnaround

Recently in a Guest Editorial, Stabroek News on August 14 carried a carefully modulated commentary on Direct Cash Transfers. This speeded up my deliberations on when to begin my task of re-addressing of the Buxton Proposal, given the change of Administration. The Editorial makes several accurate observations, two of which stand out from my perspective. These are firstly, “the reception for the proposal was naturally divided along class lines, with enthusiasm among those who would benefit the most, while also exposing the hypocrisy of many who. Thomas remarked, enjoyed tax concessions and other handouts for their businesses. The primary objection to such a scheme seems to be the objection that people would stop working and [live lives of dissolution. But human behaviour is hard to predict.”

While a compelling commentary, even more to the point is the observation in the Editorial that the disconnect between headlined expectations of oil revenues and day to day experiences of the broad mass of Guyanese is getting wider not narrower as oil revenues rise. In 2021 profit oil lifts to July 3, already exceed all such 2020 lifts!

Structure

My presentation will follow the structure used in the original. That is

Section 1 Proximate Origin

Section 2 Main Components and Basic Features Section 3 Scheduling. Operationalizing and Executing Section 4 Whys and Wherefores of Cash Transfers Section 5 Projected Petroleum Metrics [Oil Finances]

Section 1 Proximate Origin

Even though the many years of my academic life, as teacher, researcher, and author have indisputably contributed to the formulation of my oil-for-cash proposal for cash transfers to households its proximate origin lies elsewhere, in pure serendipity. I had been writing every Sunday since September 4, 2016 a series of Sunday Stabroek columns on Guyana’s coming oil and gas industry. Indeed starting in January 2019 I drafted a Petroleum Road Map for guidance. This expounds, more fully, on several themes in the Buxton Proposal. Based on these writings I was invited by the Buxton First of August Movement (FAM), to make a Presentation for Emancipation Day 2018. That Presentation is the proximate origin of the Buxton Proposal.

A year later I elaborated on the original FAM Presentation. This took place at a WPA follow-up Symposium, on the topic, which was held at Critchlow Labour College on September 23, 2019.

Accompanying these two presentations there was a deluge of dis-information, mis-information, deception, obfuscation and downright public mischief (whether deliberate or otherwise), mainly in the social and print media. WPA responded and prepared an infopack, intended for the education of the broad mass of Guyanese who they believed ,rightfully,, were entititled to a fair sharing of the country’s coming oil wealth.

As the saying goes, knowledge is power. Those who deny the masses access to knowledge know that for sure. Bluntly put, therefore, the true intent was to deny the broad masses access to power and governance in decision-making and implementation of oil and gas policy and governance.

Conclusion

Next week I shall continue with the presentation on the Buxton Proposal following the structure outlined above.