Gas-to-shore is a debt trap but alternative renewable energy is royalty

Despite the 2021 budget occupying much attention and commentary, talk of that gas to shore project, with Wales seeming to be the shoo-in location for onshore facilities, has not faded. Whether it is the best location around is not my focus today. Rather, I look at a number of surrounding factors and ask: why not seek a local alternative that features an emphasis on renewable energy? Instead of asking, I would recommend such thinking, and following it to wherever it leads.

I get the sense that it might be heresy around these parts to speak of renewable energy at this time when oil discoveries, oil expectations, and oil prosperities are all the rage. But I would not be true to myself, if I were not to table what may be construed as contrarian, but makes for much good sense. To begin with, that gas to shore project, whichever location is settled for, is going to be one gargantuan debt beast; a bona fide billion-dollar monster, if ever there was one. When I think of debt service and interest payments, even under generous borrowing scenarios, I think that we would be, if we are not already, in hock for a million or more per man, woman, and child in this country, when aggregated debt is considered. Further, there is a cost, as per Exxon’s terms, to transport and market (and all the rest) that gas, our gas, to us. Being more familiar with Exxon’s predatory capitalist ways these days, it stands to reason that the final selling price of that gas is going to be sharp. We will be more inseparably and helplessly attached to Exxon’s navel string. Guyana could be held hostage. Again. I would bet on that prospect.

Editor, it is against this unappealing backdrop that I revisit that question tabled at the start of this writing: why not look into an alternative? Instead of rushing pell-mell into a potentially costly (and highly likely corrupting) gas to shore project, which could end up being a spirit elephant, since gas is invisible, I think it would be better to interest and incentivize Guyanese to pursue solar and other non-fossil fuel possibilities. The raw materials and other feeder stock are present in abundance, with sunlight being uppermost, and agriculturally based and animal-sourced byproducts running a close second or third if something along these lines is done in a large enough scale, there could be enough energy to sell some to the national grid run by the GPL, Inc.

Employment would be provided. Our visionaries, entrepreneurs and patriots could find outlet through government-private partnership to get such a project off the ground. Since it would be heavily weighed on private investment funding, this should be an added attraction for the leaders of the state to be intrigued and involved in such an undertaking. We could be kings in our own castles, masters of our own destiny.

To be sure, there would be a need for heavy foreign institutional borrowing, except that would not be with sovereign backing and taxpayers being on the hook, but largely from privately driven vision and energy. The more I think about this, the more I like it, the more it makes sense. That is, when compared to the controversies and possible costs of a full-blown gas to shore project, which is already mired in some doubt. It is why I say let our people run with it, and do the heavy lifting. The government gets to sit back as a junior and largely silent partner, and reap the benefits and goodwill before too long. I share that familiar adage that has stood the test of time, and proved to be more infallible than other man-made concoctions. It is that if the interest is to muck up something (anything), then there is no better approach than giving it to government. For these reasons, I say for the last time: let us try something different. Let us challenge our local outside-thebox thinkers to move farther away from the box and deliver. I think they would.

When the economies of the Caribbean and Central America finally exit the pandemic, most will be in crisis. As a recent IMF review of The Bahamas put it, recovery to pre-pandemic levels ‘will likely take years’ and the ‘downside risks loom large’.

The same prognosis is expected to apply to virtually every nation in the region other than those with newfound oil and mineral reserves. So much so that the IMF suggests it will be as late as 2023 when output recovers, and 2025 when per capita GDP rebounds and pre-pandemic levels of employment, production, and the revenues necessary to underwrite social provision are restored.

In response, some in the region have called for a modern equivalent of the 1948 Marshall Plan which saw the US transfer billions of government dollars to Western Europe to support post war recovery, and as a bulwark against the then Soviet Union.

In some respects, the parallels are close - the Caribbean and Central America form a vital element of US national security - but in others, they are not, as today most western governments regard the private sector as the principal driver of sustainable growth.

President Biden recently indicated that he intends “rebuilding the muscle” of Washington’s democratic alliances and intends finding common solutions to common problems.

“There’s no longer a bright line between foreign and domestic policy”…. “the US cannot afford to be absent any longer on the world stage”, he told US diplomats in a speech at the State Department. “When we invest in economic development of countries, we create new markets for our products and reduce the likelihood of instability, violence, and mass migrations”.

In the coming months, these themes will be fleshed out in an hemispheric context. Already, Washington’s think tanks and lobbyists are seeking to inform the policy announcements that are expected to be made at April’s virtual Summit of the Americas. Governments in the Caribbean and Central America, close to the new administration are also making suggestions.

What is missing is the voice of private sector leaders in the Caribbean, Central America, and the US who in the real world will have to drive post pandemic economic recovery.

Put bluntly, this is the moment when influential private sector leaders from the region and the US should be doing more. They need to make their voice heard by the legislative and executive branches of the US government and ensure that there is substantive Caribbean participation in the CEO summit that will accompany the US-led government encounter.

Unfortunately, having the region’s corporate voice heard in a sustained manner is no longer straightforward. There is no obvious private sector led institution in Washington exclusively promoting a hands-on Caribbean and Central American agenda.

In the 1980s, the US-Caribbean Basin private sector relationship was catalysed by Caribbean Central American Action (CCAA). At the time, President Carter and then President Reagan had come to recognise that a part of the answer to their security concerns lay in stimulating regional economic development and creating new employment. Both administrations understood that if this were to happen, business leaders had to be involved.

Responding, CCAA brought together and took to the White House small groups of US and regional business leaders and with their support went on to significantly influence US policy though ideas, initiatives, events such as the annual Miami conference, and regional dialogues that promoted practical solutions that governments, agencies and institutions were able to support.

In the US it resulted in the shaping of the Caribbean Basin Initiative and then the legislating of the Caribbean Basin Economic Recovery Act, while in Europe near parallel representations by key Caribbean sector actors influenced the negotiation of pathways out of preference and the creation of treaties and agreements that provided private sector related support.

Despite CCAA being no more and the world being very different, those who fashioned these original private sector initiatives believe this is the moment when a new private sector led post-pandemic initiative with its genesis in the region is required.

“There needs to be a coming together of the best private sector leaders from all sides. The Caribbean and Central America must build its own advocacy and constituency in Washington, but the impulse must first come from the region”, Peter Johnson, CCAA’s first Executive Director recently told me.

He feels that recovery from the pandemic poses many of the same problems, and that a small high-level group of private sector leaders from the Caribbean and Central America should be meeting now with their US counterparts.

Developing a 21st century US initiative for the Caribbean Basin “will take vision and courage”, he says, and will need new players with an interest in positive economic outcomes for the region. He also advocates involving the US Congressional Caucus on the Caribbean, based on its strong diaspora ties.

In the past, when corporate leadership was largely exercised across the Caribbean and Central America by family-controlled businesses, the value of investing time and resource in strategic lobbying was more easily achieved. Today, finding champions is less easy when for the most part, especially during a pandemic, corporate boards are reluctant to authorise such activity.

That said, it is not hard to identify individuals among today’s Caribbean and Central American private sector leaders who are thoughtful, successful, outward looking, run businesses that are invested in the US, the region and elsewhere, understand the value of lobbying, and have close contact with legislators of regional heritage in the US Congress.

What is so far missing and now much needed is a well-connected US private sector leader and a convener who understand the importance of the mutually reinforcing economic relations. That is, someone with political reach who can explain how a new business related initiative for the Caribbean and Central America might address both growth, investment, trade and employment and the Biden Administration’s wider concerns about migration, global warming, security, and US domestic economic recovery.

David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

City Engineer Colvern Venture has secured an interim injunction against the Mayor and City Councillors who have publicly declared their intention to dismiss him from his post despite not actually having the power to do so.

Venture was granted the injunction by the High Court yesterday. The Mayor and City Council (M&CC) has been given until March 2nd to submit its affidavit in defence, while Venture (the Applicant) has until March 15th to respond, if necessary.

The matter will then be returnable before acting Chief Justice Roxane George-Wiltshire SC, for March 23rd.

In his fixed date application, Venture, through his lawyer, Ronald Burch-Smith, is asking the court to grant an order of prohibition preventing the acting Town Clerk, Mayor or Council from exercising any disciplinary functions or imposing any disciplinary sanction against him or from terminating his employment without the approval or permission of the Local Government Commission or Order of Court.

Venture, who was suspended without pay from his post by the Council on January 25th, is also asking that the suspension be quashed.

The application, is intended to forestall the tabling of a motion for the “Termination of Contract of Employment of the City Engineer.” This motion was the only agenda item of an Extra Ordinary Statutory Meeting of the Council which was scheduled for 2 pm yesterday.

The motion is premised on the Mayor and Councillors purportedly being empowered by Sections 74 and 75 of the Municipal and District Councils Act to employ officers to carry out functions and the contention that it is “in the interest of the Council” to terminate Venture’s employment.

Notably the motion, in violation of procedures, provides no reason for the termination beyond the “interest of the Council”.

There is no mention of any attempt to exercise natural justice principles, including allowing Venture to respond to any accusations against him. In fact, there are no accusations made in relation to the officer’s performance of his duties.

The motion also misrepresents Sections 74 and 75 of the Act. These sections do not grant the Mayor or Councillors any powers; rather they list the specific “Local government officers” who should be employed at the Council.

The duties and powers of the Mayor and Councillors are listed at Section 8A and include such things as developing and evaluating policies and programmes for the municipality as well as making efforts to raise the levels of civic consciousness of the residents of the municipality.

In fact, Venture, though his lawyer, has used the same sections in his application for relief as well as the Local Government Commission Act.

The M&CC and Town Clerk who are listed as respondents are being represented by attorneys Roysdale Forde SC and Olayne Joseph.

Tropical Orchard Products Company Limited (TOPCO), a subsidiary of Demerara Distillers Limited (DDL), yesterday launched its new range of one-litre juices and juice drinks in four flavours.

The new 1-litre juices and juice drinks are available in Pineapple, Orange, Orange Unsweetened and Cherry and are now available at leading supermarkets countrywide

The DDL group invested $4 billion in a new Tetra Pak packaging plant, as well as a fruit processing plant in 2020. In spite of COVID-19 and its many limitations, a release from DDL said that the Group remained committed to responding both to consumer demand and to a commitment made to farmers that TOPCO would provide a growing market for their produce.

The release noted that the TOPCO expansion is a part of a larger fiveyear $10B expansion project, announced by DDL Executive Chairman Komal Samaroo in 2017. In describing the project, Samaroo said that “Despite oil and gas, the agriculture sector must be developed. He noted that the value-added processing of the nation’s fruits and vegetables into pulp and juices, and eventually milk supplied by local dairy farmers, for local consumption and export is a huge step in that direction.”

Prior to the expansion, the release said that TOPCO was purchasing 1 million pounds of fruits per year of cherry, passion fruit, carambola and guava from farmers. With the expansion, the release said that the volume is expected to increase to 4 million pounds per year. The range of fruits is also being expanded to include mangoes, pineapple and citrus.

Samaroo noted that “Farmers will benefit from this project through a guarantee that their supply of fruits to TOPCO is secure, with stability of prices in spite of market demand/supply conditions. There is also the potential to increase their cultivation of fruits to increase supply to TOPCO. He added that, “Another benefit to farmers will be the ability to collaborate with a network of technical and financial agriculture-support agencies, as part of the holistic market-driven approach to developing partnerships with local fruits and dairy farmers.”

The Mahaica, Mahaicony, Abary-Agriculture Development Authority’s (MMAADA) Land Dispute Resolution sub-committee is now in place, according to a statement from the Ministry of Agriculture.

Minister of Agriculture Zulfikar Mustapha met and informed the three-person sub-committee that there were a number of pressing land dispute matters in the MMA scheme that they would need to review. The sub-committee is headed by Justice Cecil Kennard (Ret’d), and comprises former CEO of the Guyana Lands and Surveys Commission, Andrew Bishop and Lands and Surveys official, Jewel Cheong.

“The creation of this sub-committee arose when the Attorney General and I were discussing land issues that were coming out of the MMA scheme. There are legal issues pending there and there are a number of issues with land distribution. There are hundreds of acres of land that were leased to people who are residing overseas. In turn, they are renting it to small farmers who are forced to pay double or triple the cost of the lease fee in rent. As you know, we have a new Board of Directors for the MMA. I’ve tasked the new board to present new proposals because we want to start works on the second phase of the scheme.” the minister said.

The minister told the three-member sub-committee that its mandate would be to look at the disputes between the farmers and provide timely proposals and suggestions on how the MMA and the government can resolve those issues amicably among the farmers.

“We are looking to double rice production over the next five years. Last year, we produced 1.2 million metric tonnes of paddy. In five years we hope to produce 2.4 million metric tonnes. That means we have to open more land, and bring these lands under cultivation. This also means we’ll have to settle land disputes in areas that have already been developed. Farmers have been coming to my open days and meeting me at outreaches with open conflicts and bad relations”, the minister asserted.

The minister also informed the members that the MMA Board will also be looking at developing a zoning policy because of conflicts between cattle, rice and cash crop farmers. A draft Terms of Reference is expected to be created shortly and the sub-committee will review and present recommendations shortly after.

The Central Corentyne Chamber of Commerce has endorsed the governing PPP/C’s 2021 $383.1 billion budget.

According to a press release yesterday, the chamber cited no new taxes, the allweather road at No. 58 to Canje, a new road to No. 63 beach, more online services at GRA and the $15,000 cash grant per school child as laudable measures that will “incentivize the private sector, motivate the general populace and bring relief to the ordinary man.”

The chamber also noted the reduction of water tariffs, increased pensions and public assistance and the removal of VAT on data for residential use as positive features. It also cited zero rating of construction materials, the proposed increase of the loan ceiling of the New Building Society, and the removal of VAT on some basic food items as helpful to the ordinary man and bringing an ease to the hardships faced as a result of the COVID-19 pandemic.

GuySuCo, a major pillar for Berbice, the release goes on to say, will continue to recapitalize and rationalize to make the operations profitable and provide employment to thousands of people directly, and many more indirectly. The release said that the chamber would have liked to see an increase in the income tax threshold, but as a whole agreed that this kind of budget of reducing the tax burden on the population and incentivizing key productive areas like forestry, the gold mining and other productive sectors, will definitely move Guyana forward.

The chamber posited that budget 2021 was, in its view, the key difference between this government and the last one.