Oil & gas considerations relegating gold sector

Dear Editor, While the national conversation on Guyana’s emerging oil & gas sector has demonstrated our collective commitment to an accountable process, emerging policies and discussions have lacked an inter-industry policy development framework.

In recent times, it is the gold mining industry that has served as our engine of economic development, accounting for 50% of Guyana’s export earnings. The mining industry has contributed to investments in other sectors of the economy both directly and indirectly. Indeed, this engine continues to power the economy against the backdrop of a net decline in the price of gold over the past 5 years by nearly 15%, alongside increasing regulatory obligations on small and medium scale miners, as well as the inability of the Guyana Geology and Mines Commission to address concerns of corruption and institutional malpractice within the sector.

In May 2018 the extractive industry stakeholders took concerns of the incumbent government’s neglect of small and medium scale miners forward and were afforded an extension of the 2015 incentives in the form of tax-breaks, promises of infrastructure and duty-free concessions. Over the past four months, the administration has announced no new measures to support the development of the local mining industry despite extensively courting Foreign Direct Investments and seeking out support in developing technical and institutional capacities for oil & gas production.

The government’s policies that have been announced that pertain to the sector, do nothing for its advancement. It is unquestionable that the phasing out of mercury is a significant milestone in protecting inland communities and ecosystems. Additionally, the Guyana Revenue Authority announcement that miners

engaged in tenancy agreements will be taxed at what is deemed an appropriate level, has demonstrated the increase in capacity by that agency to create a fair environment in which business is conducted. When whittled down however, these measures are additional burdens being saddled upon businesses that have thus far kept the economy going in the past decade. We have been told to wait and see what will emerge from the government’s draft National Minerals Sector Policy framework that will chart the next decade for the industry. This week alone began with scores of workers laid-off by sector leader Guyana Goldfields. What will this mean for those persons and their dependents? Where is the same level of concern that the official Opposition displayed for the sugar workers immediately following their plight?

Without any meaningful support for adapting the industry to today’s realities such as the oil & gas sector, building technical capacity, or filling knowledge/skill gaps among Guyanese who rely on mining – the economic engine that is gold will stall.

The oil & gas industry presents an immense opportunity for the nation, but the allocation of resources to its development should not come at the price of letting existing industries falter. Although the concerns of this letter lie specifically with the lack of attention being paid to small and medium scale miners, politicians from across the spectrum remain apathetic to strategic sector development in areas such as bauxite (recently affected by the U.S. sanctions on Russia) or our fisheries (the ongoing threat of piracy, considerations relating to climate change and a lack of assurances against potential disruptions oil & gas may pose). These sectors account for 7% and 6.5% of Guyana’s export earnings respectively, surpassed only by gold in their contribution to the economy’s performance.

Those who support commercial enterprise and the role of business must be less complacent and challenge this policy neglect robustly. There is a need on the part of political actors to engage industries in consultation at all levels (business leaders, workers, suppliers etc) on inter-industry development specifically. These consultations should inform the development of the same strategic planning that is being afforded to oil & gas. The bigger picture here is not merely sector profits, but the ability of working class Guyanese to have the means necessary to put food on the table and possess the fundamentals for the good life that successive governments have promised to them. Yours faithfully, Brandon Francis Cheong